The Independent Market Observer

Economic Risk Factor Update: January 2021

January 12, 2021

My colleague Sam Millette, senior investment research analyst on Commonwealth’s Investment Management and Research team, has helped me put together this month’s Economic Risk Factor Update. Thanks for the assist, Sam!

The economy showed further signs of slowing growth in December, with the third wave of the pandemic causing shutdowns that have hit employment. Job creation turned negative for the first time since April, as rising restrictions at the state and local level put increased stress on the labor market. The underlying data showed some signs for optimism, however, as all of the damage came from the leisure and hospitality sector, while other sectors showed surprising strength. Consumer confidence also fell during the month, but business confidence remained surprisingly resilient.

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Monday Update: Business Confidence Rises Unexpectedly

January 11, 2021

Last week saw a number of important economic data releases, with December’s business confidence and employment reports garnering the most attention. Business confidence unexpectedly improved during the month, although the economy suffered from a net loss of jobs for the first time since April. This week will be packed with updates, with a focus on December’s inflation and retail sales reports, as well as the first look at consumer confidence in January.

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Coronavirus Update: January 8, 2021 [Video]

January 8, 2021

Today, I'd like to provide an update on the coronavirus, including the economic and market implications. On the medical front, holiday travel effects have kept infection growth at high levels, and positive results also moved to new highs. Still, we should see vaccinations ramp up by the end of the month, and we could approach herd immunity as soon as June.

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Economy Hit Hard in Recent Weeks

January 7, 2021

As expected, we saw a pullback in many coronavirus indicators over the Christmas holidays. But also as expected, the data has bounced back, indicating that the drop was due to slower reporting rather than an actual decline in cases. Looking forward, we still have another couple of weeks where infections due to holiday travel will show up in the data, and there are signs that is starting to occur. The next two weeks are likely to show continued case growth. While some sections of the country are showing improvements, we are not through this wave yet.

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Washington Turns (Very Light) Blue

January 6, 2021

Today should be the day we see Washington start to turn blue. With the Congress meeting to count the inaugural votes and with the Georgia Senate runoff likely to show both seats won by Democrats, all three arms of government will be under control of the Democratic Party come the inauguration.

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Looking Back at the Markets in December 2020 and Ahead to January 2021

January 5, 2021

At the start of a new year, it makes sense to look back and see where we were, before looking ahead to where we are going. This year, doing this is especially important, given the significant changes we saw in December. But we start January in a very different place—a place with better news, better prospects, and lower risks.

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Market Thoughts for January 2021 [Video]

January 4, 2021

December was a great month for the markets, with gains across the board. Unfortunately, we saw rising economic damage. Job growth dropped, and layoffs rose. Consumer confidence and spending also declined as the medical risks drove governmental shutdowns. Still, business confidence and spending were solid, and December's federal stimulus bill should help revive consumer demand.

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