Help is on the way Help is on the way\images\insights\article\mmdt-weekly-Small.jpg January 20 2021 January 19 2021

Help is on the way

Weekly Bond Commentary

Published January 19 2021

In many ways, 2021 picked up where 2020 left off, with rising coronavirus cases and political turmoil. Weak economic data only made the perception worse that this year would be difficult.

Obviously, it is very early in the year, but several positive factors are visible through the mist: vaccination rates are increasing, the incoming Biden administration is quickly adding experienced leaders to various positions and fiscal stimulus is in the offing.

The S&P 500 index reached its all-time high on Jan. 8, amid worsening health and political news. Though it eased lower from the high, the index is looking through the current difficulties and focusing on the recovery ahead. The recovery should be helped by the further stimulus and, probably more importantly, by the increasing rate of vaccination, currently nearing one million people per day.

This improvement could not come at a better time. The December employment report painted a weak employment picture, especially in the hospitality and restaurant sectors, and the increasing weekly jobless claims report for the first full week of January did nothing to change that narrative. Confirming this sour view was the University of Michigan consumer sentiment index, which weakened in January. Given the current political divide in the country, it is not surprising that Democrats in the survey are much more upbeat than they were before the election, while Republicans mirrored that, especially in their view of expectations.

Tags Markets/Economy . Fixed Income .

Views are as of the date above and are subject to change based on market conditions and other factors. These views should not be construed as a recommendation for any specific security or sector.

The University of Michigan Consumer Sentiment Index is a measure of consumer confidence based on a monthly telephone survey by the University of Michigan that gathers information on consumer expectations regarding the overall economy.

S&P 500 Index: An unmanaged capitalization-weighted index of 500 stocks designated to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. Indexes are unmanaged and investments cannot be made in an index.

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