Help is on the way

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.