2021 Mid-Year Investment Update
Author: Kurt Spieler, Chief Investment Officer
In the 2021 Mid-Year Investment Update, FNBO’s Investment Management team discusses the U.S. recovery from the global pandemic.
We believe there are three primary reasons why the stock market is up 92.1% since the low on March 23, 2020.1 This includes:
- Strong Economic Rebound – In the 1st quarter of 2021, the U.S. economy grew 6.4%, reflecting robust consumer spending on goods, the reopening of businesses, and continued government spending related to COVID-19.2 For 2021, economist expect U.S. GDP growth of 6.6%.3
- Liquidity – Federal Government spending continues with the Congressional Budget Office (CBO) projecting a budget deficit of $3 trillion in 2021 on top of record spending last year.4 In addition, the Federal Reserve is buying $120 billion in securities each month and maintaining the Fed Funds rate close to 0%.
- Corporate Earnings – Over the last year, corporate earnings have surpassed expectations by a significant amount as analysts have underestimated the economic recovery and profitability of companies.
Read the full Mid-Year Investment Update for a detailed analysis on whether stock market gains will continue and to learn how our team is adjusting our outlook and strategy in response.
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