A lot has been surging lately: the market, Covid cases, and debt. Joe Biden is officially President Elect, although the Trump administration is still trying to overturn the election. Let’s review key 2020 events and how we got to this point.
January- The Lead In
The year began with an impeachment battle over President Donald Trump. Brexit was still in the news regarding the United Kingdom. COVID-19 was just starting to get coverage in the United States, while employment numbers were skyrocketing.
February- The Beginning of the Meltdown
COVID-19 began to impact supply chains, while strong consumer buoys much of the market. Consumer confidence was at an all-time high with unemployment at 3.6% of the real wage growth.
March- The Meltdown
The government took drastic action to slow the spread of COVID-19 based off the flawed data model from the Imperial College. While the longest economic expansion in U.S. history ended abruptly. Jobless claims began to soar to 3.28 million on March 21st. Unfortunately, 5 times higher than the October 82 record. Due to millions of citizens being laid off from their jobs, the CARES Act was signed into law on March 27th with 2.2 trillion dollars in economic stimulus.
April- The Recovery Begins
COVID-19 restrictions became the new normal but created a disturbance for those governments and citizens alike. GDP contracted 4.8% for the 1st quarter but did not capture the true impact since there was only one month of contraction in the quarter. Oil futures turned negative due to lack of storage facilities, while durable goods orders slowed by 14.4%.
May- The Recovery Accelerates
As recovery continued to grow, parts of the economy began to reopen. Political and domestic unrest increased with widely diverse views on how to control the spread of COVID-19. Initial jobless claims were at 2.1 million, which showed a gradual weekly improvement.
June- Concerns of a Double Dip “W” Recovery
Preliminary forecasts indicated a 32% contraction in GDP. The S&P 500 rallied nearly 21%, the biggest quarterly gain since 1998. Texas and Florida started to grab attention as “Hot Spots.” They were “open”, fueling more divisiveness due to differencing views on how best to slow the spread. While corporate debt leads began to recover.
July- The Market Continues to Climb the Wall of Worry
Unemployment rates continued to improve, with the Sun Belt Region experiencing high COVID-19 case counts. The Government began to borrow slows as tax deferment that was granted earlier in the year ends.
August- The Market Makes New Highs
Silly Season started to really become a popular topic due to the election in November. The election began to shift everyone’s focus away from COVID-19 headlines.
September- Recovery Moves to Recalibration
As the election started to approach, Vote by Mail grabbed attention. We covered this topic in our Market Insight “Red Mirage” outlined by a Democratic Think tank that stated President Trump would have an early lead in the election. But over the weeks of September Biden took the lead. Employers began to add back half of the jobs lost in April, while the concern for many small business closings indicated a bifurcation or K recovery.
The 3rd quarter GDP estimated approximately 25% growth rate. The United States received their first real criticisms regarding Vote by Mail and the lack of Chain of Custody issues. GWS does acknowledge the right of everyone to have their vote counted and there are ways to create a secure system.
October- Still Calibrating
GDP expanded to 33.1% for the 3rd quarter. President Trump was criticized heavily for stating that the vaccine would arrive “soon”, meaning before the November election. Shortly after, President Trump was diagnosed with COVID-19. The United States considered a contested election the most probable and indicated the polls are NOT accurate.
November- Vaccines Begin to Remove COVID-19 as a Market Mover
President Elect Biden was elected as the presumptive winner and there was two runoff election in Georgia leaving a “Hat Trick Election” as a potential outcome for Democrats. The election polls indicated a significant percentage of Republicans that believed the election was stolen. But polls were proven as a poor sample of population, the results were significantly outside the margin of error. Viable COVID-19 vaccines arrived, and several states started to reinstitute restrictions as a true second wave materializes.
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Disclosures:
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful. All investing involves risk including the possible loss of principal. No strategy assures success or protects against loss. Dollar cost averaging involves continuous investment in securities regardless of fluctuation in price levels of such securities. An investor should consider their ability to continue purchasing through fluctuating price levels. Such a plan does not assure a profit and does not protect against loss in declining markets.