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2021 Mid-Year Investment Update

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:

  1. 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
  2. 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%.
  3. 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.

Access the Update

1 Yahoo Finance; S&P 500 Price Return from 3/23/2020 – 6/30/2021

2 U.S. Bureau of Economic Analysis; Real Gross Domestic Product (GDP) rate released June 24, 2021

3 Bloomberg Economic Forecasts as of 06/30/2021

4 Congressional Budget Office estimates as of March 11, 2021