A Market Tug-of-War

The year of Equities began with a bang…

… and now, from late February through yesterday, gave all these gains back, led by the best and largest Tech Companies in America. Even the darling of Wall Street, Tesla, is down 25% this year.

The Markets, Policy, and Stimulus

A few clients have called with their worries: Inflation has picked up and thus is hurting the bond markets. There is pressure on the fracking industry from the Biden Administration—this has caused the price of oil to increase by 30% and we all feel this at the gas pump. Congress is about to pass another major stimulus bill when more than 50% of the last bill’s dollars still have not been distributed. The lack of bipartisanship continues in D.C. COVID and State business openings are portrayed negatively in the media.Many states still are incredibly ineffective with the rollout of vaccinations.

Despite the Market Mania

Now is a buying opportunity.

The last few weeks represent the normal stock market gyrations that we expect to occur at least three times this year. And, more importantly, we expect December year-end results to be higher than now.

Profits continue to grow among our largest leaders. Google, Amazon, Netflix, Facebook, and many more American corporate powerhouses are making record profits. Mid-sized companies and smaller companies are preparing for their business to go back to normal soon following vaccinations. Small Emerging economies are growing. All signs point positive for 2021.

We expect a robust year of economic growth and a positive year for Equities. While the virus has been devastating for many, the nationwide rollout of vaccines points to both physical and economic recovery.

For our clients, your accounts should be of relatively little concern. We have a long history of navigating market cycles and volatility. We will focus on your accounts, so you can focus on your health and loved ones.

All of this will pass as we get healthier, travel more, spend more and small businesses open again. I am positive for 2021. I am supporting our favorite local restaurants and retail businesses.

Call me or email me anytime. Feel free to pass this along to a friend or coworker.

All my best,

Elliot Kallen