New Year, New You, Same Market
The start of January and a new year always brings with it the feeling of a clean slate. A chance to alter the direction of the path you’re currently on. Many will make resolutions like spend more time with family, or drink more water. The idea of a clean slate is only psychological, but will provide just enough of a nudge for thousands to begin, work towards, and finally accomplish their goals this year. New Year, New You as they say……. But still the same market, economy, and political circus as before.
Georgia On My Mind
One of the best parts of quarantine has been my chance to inundate my children with good music. I don’t know if you have listened to new music lately, but it isn’t great. If I have to listen to Baby Shark or It’s Raining Tacos one more time, I might lose it.
Our musical journey of course included the sounds of Ray Charles, and specifically Georgia on My Mind, one of my favorite songs. This election season, Georgia on my mind seems to have taken on a different meaning as the State played a huge roll in the presidential election, and tomorrow will decide control of the Senate.
Unlike the feeling that washes over you when hearing Ray Charles sing such an amazing song, the political circus in Georgia and across the country gives the people a feeling of hopelessness, not because of the ridiculous politics being played, but because like most people we keep asking ourselves “Are these people really the best we can do?”
As the runoff election plays out in Georgia, we turn our attention towards equity markets and the economy. I can’t stress this enough, the stock market, is not the economy. As the market rises, it’s easy to think the economy is booming, that isn’t the case. The economy has been brought back from life support and is maintaining at the moment. Jobs numbers are mixed at best, and small businesses are struggling as a Covid-19 vaccination rollout has been unorganized at best. I have a client in Florida who waited in her car for 6 hours to get her vaccination, she lined up at 4AM.
Nonetheless, a stimulus plan was passed, and more was promised and will become much more likely with a democratic victory in tomorrow’s runoff election. We can argue whether this is good or bad in the long term, but short term more stimulus will continue to boost the economy.
Add in pent up demand from quarantine and a vaccination schedule that will begin to hum as time goes on as you have the makings for a good market, as well as a good economy underneath it. That doesn’t mean there won’t be missteps, and when it comes to the market a misstep means the market falls 8% in 3 days or something dramatic like that. Short term events will strain our emotional resolve, but understanding that we are laser focused on long term risks, and evolve your portfolios, for you specifically, those short term events don’t impact your long term plan and goals.
So how does this impact all of you?
- A new year brings a new you, but the same market
- There is long-term risk with the deficit, but right now stimulus will help the markets.
Stock market calendar this week:
Wednesday January 6th
ADP Employment Report @ 8:15AM
Thursday January 7th
Initial and continuing Jobless Claims @ 8:30AM
Most anticipated earnings for this week
Latest Covid-19 Data