MENU

Perspectives

Congress finally made a deal on a new Coronavirus relief package

by Fortem Financial December 21, 2020

There is plenty of weaker global news, including a new lockdown in London this weekend. A package of weaker economic data looks to have finally broken the stalemate on U.S. fiscal policy. Additional stimulus from D.C. appears imminent, sizeable, and front-end loaded for 2021. We’ve revised up our near-term U.S. real GDP estimate, including moving 1Q into positive territory (+3.0% q/q A.R.), and continue to look for an economic surge by mid-2021. The “19” in COVID-19 stands for 2019, marking the origin of the disease. Soon we will turn the calendar to 2021, and the impact should fade as medical solutions (vaccines) to the medical problem (virus) become widely available. Economic re-openings (sustainable) are obviously better than stimulus (temporary), but current efforts are needed to provide a bridge.

Support is needed with U.S. retail sales weaker-than-expected, falling -1.1% m/m in November & downward revisions to prior months. Weekly jobless claims also rose again w/w to 885,000 last week. While the recession appears over for numerous wealthier individuals, those unemployed (which are concentrated at the lower-end of the pay scale), those tied to state & local jobs, and small businesses remain at considerable risk. There has been a lot of contention over the renewed lockdowns with many speaking of the economic damage they are causing.

Near-term U.S. payroll readings could turn negative month over month, but if the income is made up and there is no financial crisis (thank you Fed), then markets can look thru this event. There are issues like unpaid rent that could sum to $70 billion, but vs. a ~$900 billion stimulus, the macro-economy still has support.

The Fed acknowledged last week that the next several months are likely to be tough for the U.S. economy. True, there are areas that are expanding (eg, industrial production up +0.4% m/m in Nov, housing starts up +1.2%). But the service sector remains at risk.

The FOMC is working with its current tools. Credit remains key for a robust recovery, though the Fed cannot provide grants to specific sectors, as Chair Powell noted (reiterating his “lending not spending” comments).

Fed Chairman Powell also was clear that one-time price increases in 2021 on a re-opening (eg, a pop in pentup demand) would not create worry at the Fed about inflation. Inflation would have to be maintained year after year, and show up in wage increases as well. This approach could be tested in 2021.

Sentiment is undoubtedly running hot, and for as fear-driven as March was, the frenzied pace of new IPO’s and the SPAC phenomenon of recent months is quite the 180. None of that is lost on us, and there’s likely some punch in the gut in our future, but it’s just really hard to time corrections in bull markets! Particularly fully-confirmed bull markets – stocks of all sizes, styles, and geographies are working without much discrimination other than relative performance. We joked the other day that we couldn’t remember a time in recent years that both Haliburton and Shopify were breaking out on the same day.

This week also marks 9 months (and a resounding +65%) off the 3/23/2020 low, a rally only rivaled by the first 9 months coming off the August ’82 and March ’09 market lows. In both the ’82 and ’09 examples, the next 9 months were more challenging and more volatile as gains were digested before each advance ultimately resumed. This won’t be a perfect roadmap, but it is something to think about.

Bottom line: the Fed continues to believe the biggest problem for the economy is not interest rates or financial conditions, but health issues. This makes sense. By the second half of 2021, economic re-openings should take over (providing a smoother glide path vs. rolling fiscal cliffs). It’s all about stimulus providing an income bridge, despite new lockdowns, from here to there.
Source: Strategas


Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments. Data provided by FactSet.

Sincerely,

Fortem Financial
(760) 206-8500
team@fortemfin.com

 

 

Latest News

 

Here's a Market Forecast: 2021 Will Be Hard to Predict

At the outset of the coronavirus pandemic, investors and bank strategists put out public prognostications for what would happen in the markets, but 2020's combination was so unusual it wa...

Wall Street Journal
Dec 19, 2020

Read Story

 

Stocks drop as new coronavirus strain threatens Britain

Stocks were sharply lower Monday after a new coronavirus strain was discovered to be quickly spreading across Britain and top U.S. lawmakers reached a $900 billion aid agreement.

Fox Business
Dec 21, 2020

Read Story

 

Jobless Claims Remain Elevated as Recovery Slows

Nearly 900,000 U.S. workers applied for jobless benefits in a second week of increases, the Labor Department said Thursday, another sign the economy is entering a winter slowdown.

Wall Street Journal
Dec 17, 2020

Read Story

 

Facebook and Apple are in a fight. Your browsing history ...

Facebook on Thursday ran its second full-page newspaper advertisement in as many days, attacking Apple's plans to tell iPhone and iPad users when apps are tracking them online.

NBC News
Dec 17, 2020

Read Story

 

Brian Amidei, along with Partners Joseph Romano and Brett D'Orlando have also been named *2014, 2015, 2016, 2017, 2018 Five Star Wealth Managers!

Disclosures:
Awards and recognitions by unaffiliated rating services, companies, and/or publications should not be construed by a client or prospective client as a guarantee that he/she will experience a certain level of results if Fortem is engaged, or continues to be engaged, to provide investment advisory services; nor should they be construed as a current or past endorsement of Fortem or its representatives by any of its clients. Rankings published by magazines and others are generally based on information prepared and/or submitted by the recognized advisor. Awards may not be indicative of one client’s experience or of the Firm’s future performance. Neither Fortem nor the recognized advisor has paid a fee for inclusion on a list, nor purchased any additional material from the award provider. The criteria for each award is listed below:

Five Star Professional Disclosure:
The Five Star Wealth Manager award is based on 10 eligibility and evaluation criteria: 1) Credentialed as an investment advisory representative (IAR) or a registered investment advisor; 2) Actively employed as a credentialed professional in the financial services industry for a minimum of five years; 3) Favorable regulatory and complaint history review; 4) Fulfilled their firm review based on internal firm standards; 5) Accepting new clients; 6) One-year client retention rate; 7) Five-year client retention rate; 8) Non-institutionalized discretionary and/or non-discretionary client assets administered; 9) Number of client households served; and 10) Educational and professional designations. The inclusion of a wealth manager on the Five Star Wealth Manager list should not be construed as an endorsement of the wealth manager by Five Star Professional or the magazine. The award methodology does not evaluate the quality of services provided. Additional information about this award is available at: fivestarprofessional.com/2016FiveStarWealthManagerMethodology.pdf
Fortem Financial 2016. All rights reserved.

Data Sources: News items are based on reports from multiple commonly available international news sources (i.e. wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. Market Data: Based on reported data in WSJ Market Data Center (indexes); U.S. Treasury (Treasury Yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates). All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness.

Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. The opinions expressed are solely those of the author, and do not represent those of Fortem Financial, LLC or any of its affiliates. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful. Forward looking statements are based on current expectations and assumptions, the economy, and future conditions. As such, forward-looking statements are subject to inherent uncertainty, risks, and changes in circumstance that are difficult to predict. Actual results may differ materially from the anticipated outcomes. Carefully consider investment objectives, risk factors and charges and expenses before investing. Fortem Financial is a registered investment adviser with the SEC. Advisory services are offered through Fortem Financial.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighed index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. Market indices listed are unmanaged and are not available for direct investment.

Fortem Financial

Fortem Financial Author

Recent Posts

PRIVACY NOTICE REGARDING CLIENT PRIVACY

Fortem Financial Group, LLC, has adopted this policy with recognition that protecting the privacy and security of the non-public personal information we obtain about our customers is an important responsibility.

All financial companies choose how they share your non-public personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your non-public personal information. Even when you are no longer our customer, we will only share your non-public personal information as described in this notice. So, please read this notice carefully to understand what we do.

The types of non-public personal information we collect and share depend on the product or service you have with us. This information can include items such as your Social Security number and income, your account balances and transaction history, and your investment experience and account transactions.

We collect your non-public personal information in a variety of ways. For example, we obtain your non-public personal information when you open an account or give us your income information, tell us about your portfolio or deposit money, or enter into an investment advisory contract. We also collect your non-public personal information from other companies. For example, from the custodians who hold your account assets.

All financial companies need to share customer’s non-public personal information to run their everyday business. Below, we describe the reasons we can share your non-public personal information and whether you can limit this sharing.

We share your non-public personal information for our everyday business purposes such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, report to credit bureaus, to protect the confidentiality or security of your records, or as permitted by law. We may also share your non-public personal information for our own firm’s marketing purposes; so that we can offer our products and services to you.

Federal law gives you the right to limit only sharing non-public personal information about your credit worthiness for our affiliates’ everyday business purposes; sharing non-public personal information about you with our affiliates to market to you; and sharing non-public personal information with non-affiliates to market to you.

We don’t share non-public personal information about your creditworthiness with our affiliates for their everyday business purposes. We don’t share your non-public personal information with our affiliates to market to you. We don’t share your non-public personal information with non-affiliates to market to you. We also don’t share your non-public personal information for joint marketing with other financial companies. State laws and individual companies may give you additional rights to limit sharing.

We share non-public personal information with our parent company affiliate, Focus Financial Partners, Inc, for its internal and external auditing purposes. We also share your non-public personal information with a non-affiliate for the purpose of aggregating it and providing summary information based on this data to our parent company, Focus Financial Partners, Inc.

To protect your non-public personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings.

Our policy about obtaining and disclosing non-public personal information may change from time to time. We will provide you notice of any material change to this policy before we implement the change.

If you have questions please call us at 760-206-8500 or go to our website at www.fortemfin.com.

IMPORTANT CONSUMER DISCLOSURE

Fortem Financial Group, LLC ("Fortem Financial" or the "Firm") is a federally registered investment adviser with offices in California and Arizona. Fortem Financial and its representatives are in compliance with the current registration and notice filing requirements imposed upon federally registered investment advisers by those states in which Fortem Financial maintains clients. Fortem Financial may only transact business in those states in which it is notice filed, or qualifies for an exemption or exclusion from notice filing requirements.

This website is limited to the dissemination of general information regarding the Firm's investment advisory services offered to U.S. residents residing in states where providing such information is not prohibited by applicable law. Accordingly, the publication of Fortem Financial' website on the Internet should not be construed by any consumer and/or prospective client as a solicitation to effect, or attempt to effect transactions in securities, or the rendering of personalized investment, tax or legal advice. Furthermore, the information resulting from the use of any tools or other information on this website should not be construed, in any manner whatsoever, as the receipt of, or a substitute for, personalized individual advice from Fortem Financial. Any subsequent direct communication from Fortem Financial with a prospective client will be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides. Fortem Financial does not make any representations as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to this website or incorporated herein, and takes no responsibility therefore. All such information is provided for convenience purposes only and all users thereof should be guided accordingly.

All statements and opinions included on this website are subject to change as economic and market conditions dictate, and do not necessarily represent the views of Fortem Financial or any of their respective affiliates. Past performance may not be indicative of future results and there can be no assurance that any views, outlooks, projections or forward-looking statements will come to pass. Investing involves risk, including the potential loss of principal, and the profitability of any particular investment strategy or product cannot be guaranteed.

Any rating referenced herein may not be representative of any one client's experience. Further, the Firm's receipt of any rating is not indicative of the Firm's future performance. The Charles E. Merrill Circle of Excellence award is granted by Merrill Lynch for outstanding client service and satisfaction. The award is granted based on annual criteria established by Merrill Lynch for its top decile advisors. The Barron's Top 1,200 Financial Advisors rating of the top financial advisors in the United States is based on data provided by participating firms. The following factors are included in the rankings: assets under management, revenue produced for the firm, regulatory record, quality of practice and philanthropic work. Investment performance is not an explicit component. The Palm Springs Life's "40 Under 40" Rising Young Professionals to Watch in the Coachella Valley is based upon nominations from the local business community and selected by the staff of Palm Springs Life.

For information pertaining to the registration status of Fortem Financial, please refer to the Investment Adviser Public Disclosure website, operated by the U.S. Securities and Exchange Commission, at www.adviserinfo.sec.gov., which contains the most recent versions of the Firm's Form ADV disclosure documents.

ACCESS TO THIS WEBSITE IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND WITHOUT ANY WARRANTIES, EXPRESSED OR IMPLIED, REGARDING THE ACCURACY, COMPLETENESS, TIMELINESS, OR RESULTS OBTAINED FROM ANY INFORMATION POSTED ON THIS WEBSITE OR ANY THIRD PARTY WEBSITE REFERENCED HEREIN.