ClearWater Market Commentary as of January 4th, 2021

Here is the ClearWater Market Commentary as of January 4th, 2021:

In this issue:
– Performance of Major Indices
– Market Commentary
– Last Week’s Key Economic  
  Events and Upcoming Events

Performance of Principle Indexes: 

^{As of 2020/12/31 – Source: www.marketwatch.com}

^{As of 2020/12/31}

Last week’s and next week’s key economic events:
 

• US economy (S&P 500):

• The holiday shortened week saw the S&P 500 set a record high on Monday as another round of U.S. unemployment benefits and stimulus checks were announced and after Trump signed a new COVID relief bill
• The market has increasingly focused on the size and magnitude of the stimulus bill as well as the rising coronavirus case count.
• Optimism over the rollout of a new vaccine also seemed to support positive market sentiment.   
• Jobless claims were sizably below consensus estimates. Although positive, the levels are still firmly elevated from pre-pandemic levels and point to a job market still under stress
• Going into 2021 we can expect GDP in 2021, but to slow in Q1

• Canadian markets (S&P/TSX):

• Encouraging data continues to come out on Canadian manufacturing activity for the month of December. Canadian factor activity for example expanded at its fastest pace on record in December as new orders and production climbed
• The roll out of corona vaccines in several countries around the world continues to provide an upbeat mood for the Canadian market as it expects the global economy to be lifted in 2021.
• Additionally, Canadians are more confident in the housing market as the industry is forecasting lofty price gains for 2021 with an average national sales price increase of 9.1%. Another positive driver for Canada as we enter 2021.

Performance 2020: S&P 500/400/600 Sectors

• European and Asian economies:

• Shares in Europe rose on the news of the U.S. fiscal stimulus package.
• Even with a vaccine roll out, England has extended its toughest COVID restrictions however to three quarters of the population
• This week we also saw the signing of a long-awaited BREXIT deal between the U.K and the E.U.
•  The EU and China also agreed on an investment treat after 7 years of talks.
• Chinese stocks finished at multi-year highs as investors anticipated stronger growth in 2021.

Sources: Bloomberg.com,Yardeni.com, Barron’s.com, Factset.com and Newyorkfed.org

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