To listen to the full recording, click here: RECORDED ZOOM VIDEO
KEY POINTS:
(00:36):
- Despite the election and a pandemic, we are in the midst of an economic recovery.
- We know the US economy has always been a bit resilient and dynamic, and that is certainly showing through as we continue to see jobs added back to the economy.
- Spending continues to be up, and corporate fundamentals, as a result of that, have surprised to the upside.
(01:32):
- Earnings continue to impress us, so there's a reason why the market continues to go up.
- This year the Fed has been more generous than ever, resulting in why the market is up.
- On the fiscal side of things, we had the CARES Act on March 27th as well.
(02:21):
- For those people who become unemployed and for those small businesses, who didn't think they could make it through, the CARES Act that contributed just over $2 trillion helped increase this recovery throughout the year.
- And there's still momentum in the economy, yet economic recovery is slowing.
(04:17):
- The stock market is up, and the technology and healthcare sectors did fantastically well yesterday. These are all a by-product of an election, which most likely is going to be behind us here very soon.
(05:32):
- The most significant reason why this market is doing better is the naming of a new President. Also, the Senate is not going deeply blue and which will result in less expected tax increases.
(09:16):
- In order to appoint a progressive cabinet member or significantly increase taxes, there would have to be a majority vote. We don't feel like that's a simple conclusion.
- Yet as the pandemic continues and politicians evoke anxiety and fear, coupled with a tremendous amount of uncertainty, we will most likely need a second round of stimulus to help those that have been most affected.
(10:18):
- Unemployment insurance ran out at the end of July.
- The paycheck protection program will start to run out at the end of December.
- Can we get more pandemic relief?
- Yes, we do believe you will get more pandemic relief. It needs to happen.
(11:18):
- Going forward, the pathway that matters to us is the Congress will be a bit sidelined with no major initiatives, at least for the next couple of years, until the midterms of 2022.
- Biden could actually be positive for trade to remove tariffs.
(12:17):
- We're in the early part of the economic cycle.
- The economy is recovering, and more pandemic relief is on its way globally.
- We're seeing good things out of China.
- We're seeing uncertain things out of Europe only because COVID is playing a significant role.
(13:20):
- What's going to keep this economy going in the right direction is a vaccine is going to be a full-blown commercially viable reality by the summer of 2021, if not sooner. It is going to be a real positive boost to our economy.
- And you're going to get that in addition to the stimulus.
(14:07):
- Staying the course continues to remain the best strategy.
- Staying the course and remaining fully invested to the extent you have the willingness to accept risk - we feel like it's the most effective strategy going forward into 2021.
(23:15):
- The last time we spoke, you [Fidelity] suggested technology and healthcare, which worked well. Are we post COVID stocks now?
(23:41):
- It's all about fundamentals right now.
- It's about earnings. It's about companies that are better quality companies that are generating more top-line revenue growth and bottom-line earnings growth. And that's why we really like the tech sector because, when the big five reported their earnings, nobody was disappointed.
(26:30):
- We feel like the healthcare sector should continue to blossom, especially post-election. With the reopening of trade, more cyclical areas, the deep value names, they will eventually do better. And if you want to anticipate that we're already starting to do, we feel like the best non-tech, or non-healthcare solution is industrials. So, industrials, the biggest component, defense, and aerospace are showing signs of being big winners.