Market Commentary

January 2021

Latest Relief Package Signed in Late December $600 checks, extended unemployment benefits, rental assistance More PPP loans Broad assistance Vaccine aid	Vaccine Rollout Started in Late December 2 injections 21 days apart and refrigerated vials are required Hospitals & military are first up Distribution reports indicate process has been slow	Political Transitions Implication of Democrat Control Increased stimulus likely with additional $1400 check Infrastructure spending with focus on green infrastructure Tax hikes appear more challenging
Equity Market Summary *Unique Path to Gain in 2020* S&P 500 declined 31% from Jan 1- March 23 (pandemic onset) Index rebounded 68% from March 24-Dec 31 (stimulus plans, low interest rates, vaccine progress, election, optimism) 32 all-time highs during 2020 109 days of +/- 1% moves	Earnings *Pandemic Impact* Corporate earnings fell ~15% in 2020, but exceeded expectations Improved economic conditions & easy comparison lead to projected 22% earnings gain in 2021 S&P 500 at 22.5x estimated 2021 earnings, 19.5x 2022 projection	Outlook *Numerous Positive Factors in 2021* Low interest rates, low inflation, stimulus plans, vaccines, further re-openings, savings/cash levels, consumer net worth, sentiment Result: Conducive to gains in GDP, corporate earnings, equity markets

Latest Relief Package

Signed in Late December

$600 checks, extended unemployment benefits, rental assistance
More PPP loans
Broad assistance
Vaccine aid

Vaccine Rollout

Started in Late December

2 injections 21 days apart and refrigerated vials are required
Hospitals & military are first up
Distribution reports indicate process has been slow

Political Transitions

Implication of Democrat Control

Increased stimulus likely with additional $1400 check
Infrastructure spending with focus on green infrastructure
Tax hikes appear more challenging

Equity Market Summary

Unique Path to Gain in 2020

S&P 500 declined 31% from Jan 1- March 23 (pandemic onset)
Index rebounded 68% from March 24-Dec 31 (stimulus plans, low interest rates, vaccine progress, election, optimism)
32 all-time highs during 2020
109 days of +/- 1% moves

Earnings

Pandemic Impact

Corporate earnings fell ~15% in 2020, but exceeded expectations
Improved economic conditions & easy comparison lead to projected 22% earnings gain in 2021
S&P 500 at 22.5x estimated 2021 earnings, 19.5x 2022 projection

Outlook

Numerous Positive Factors in 2021

Low interest rates, low inflation, stimulus plans, vaccines, further re-openings, savings/cash levels, consumer net worth, sentiment

Result: Conducive to gains in GDP, corporate earnings, equity markets

^{*Data as of 12/31/2020}

Additional Information/Articles of Interest

^{This material is for your general information. It does not take into account the particular investment objectives, financial situation, or needs of individual clients. This material is based upon information obtained from various sources that Community Trust and Investment Company believes to be reliable, but we make no representation or warranty with respect to the accuracy or completeness of such information. Views expressed herein are current only as of the date indicated, and are subject to change without notice. Forecasts may not be realized due to a variety of factors, including changes in economic growth, corporate profitability, geopolitical conditions and inflation.}