The Balancing Act

COVID-19Market Update
The Balancing Act

Last week saw the equity markets performing a balancing act between incoming positive vaccine news and ever-growing economic restrictions aimed at curbing the recent spike in virus cases and hospitalizations. The rotation out of the technology sector and into more cyclicals stocks continued, as the vaccine developments improved investor sentiment and confidence about next year’s outlook. Meanwhile, the jobs-data release showed worse-than-expected initial jobless claims.

The choppy week ended with little change overall. The S&P 500 and the Dow were slightly negative, the NASDAQ was modestly positive, and none of the major indexes moved more than 1% for the week.

U.S. Treasury Secretary Steven Mnuchin, on Thursday, said he would not extend most of the emergency lending programs that his agency has been running in tandem with the U.S. Federal Reserve amid the coronavirus pandemic. The decision to curb the programs at the end of December comes as the economy faces new challenges from the latest spike in COVID-19 cases.

Figures from the just-completed quarterly earnings season show that profits at S&P 500 companies fell an average 6.6% compared with the same quarter a year earlier, according to FactSet. That’s the fourth-largest quarterly decline since 2009. Healthcare posted the strongest earnings growth at the sector level, rising 13.0%.  That said, and as we’ve been noting, this decline was better than expected.

Tomorrow (Wednesday) will yield a bumper crop of economic reports in a holiday-shortened week. Releases are scheduled on everything from quarterly GDP to U.S. Federal Reserve meeting minutes, weekly unemployment claims and more. U.S. markets will be closed Thursday due to the Thanksgiving holiday, and markets will close early for the day on Friday.

We remain excited and cautiously optimistic about the end of the year. The beginnings of transition to the new White House administration will, undoubtedly, have some short-term impact on a variety of sectors that will likely be affected by policy changes. Maintaining balanced footing may be challenging during this time, but we are confident that our balanced approach to research and implementation will keep the portfolios steady.

Sources: Yahoo Finance,, and JP Morgan Market Insights

Any opinions expressed in this forum are not the opinion or view of American Portfolios Financial Services, Inc. (APFS) or American Portfolios Advisors, Inc.(APA) and have not been reviewed by the firm for completeness or accuracy. These opinions are subject to change at any time without notice. Any comments or postings are provided for informational purposes only and do not constitute an offer or a recommendation to buy or sell securities or other financial instruments. Readers should conduct their own review and exercise judgment prior to investing. Investments are not guaranteed, involve risk and may result in a loss of principal. Past performance does not guarantee future results. Investments are not suitable for all types of investors. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purposes of avoiding penalties that may be imposed by law. Each tax payer should seek tax, legal or accounting advice from a tax professional based on his/her individual circumstances.
This material is for informational purposes only. Neither APFS nor its Representatives provide tax, legal or accounting advice. Please consult your own tax, legal or accounting professional before making any decisions. Information has been obtained from sources believed to be reliable and are subject to change without notification. The information presented is provided for informational purposes only and not to be construed as a recommendation or solicitation. Investors must make their own determination as to the appropriateness of an investment or strategy based on their specific investment objectives, financial status and risk tolerance. Past performance is not an indication of future results. Investments involve risk and the possible loss of principal.

Let our professional financial advisors help you achieve the legacy you desire for yourself, loved ones, and organizations. Contact Us