There was a political changing of the guard this week as President Trump exited the presidency and President Biden was inaugurated as America’s 46th president. Meanwhile, stocks got off to a solid start on a holiday-shortened week. The market’s upward move was fairly broad in nature with good performance from both cyclicals and more growth-oriented areas of the market. On the cyclical side of things, economically sensitive areas from small caps to energy stocks got a boost early in the week as Janet Yellen, President Biden’s nominee for Treasury secretary, testified before Congress. In her testimony, Yellen made the case that the incoming administration needs to “act big” in regard to another round of fiscal stimulus. Without further action, she believes there is risk of a prolonged recession. It would appear the market agrees with her. This week was also a big week for earnings. In financials, large banks such as Goldman Sachs and Morgan Stanley reported better-than-expected results, largely on the heels of strong revenues from their trading operations. In technology, shares of streaming giant Netflix surged after the company blew away expectations for new subscriber growth, a sign that sheltering-in-place orders still impact the markets. After struggling a bit in recent weeks, technology stocks generally saw renewed signs of life this week. With the new administration in place, change is expected and swiftly. It is looking likely that President Biden will sign a number of executive orders his first week in office. In addition to addressing economic relief, he is looking to take action on immigration, climate change, racial inequity, and the pandemic. Many of these will be significant reversals of the policies implemented by the prior administration. The markets are primarily interested in new the new administration’s policies for controlling COVID-19 and vaccine distribution, as well as the magnitude of fiscal stimulus. Effectively addressing those issues could bode well for the markets and economy at large. Stay safe and be well. Bryan Market comments are based on indexes which are unmanaged and cannot be directly invested into. Past performance is no guarantee of future results. Investing involves risk and the potential to lose principal. The information provided, including references to individual companies are for general informational and educational purposes only and is not a recommendation of any kind or investment advice. Forward-looking statements are subject to numerous assumptions, risks, and uncertainties, which change over time and cannot be guaranteed. |
New administration and Weekly Market Update
