Market Commentary

February 2021           

Latest Relief Package Talk

Democrats Pushing for More
 
  • Another $1,400 check?
  • $3,600 child tax credit?
  • $2,000 check for working mothers? (Universal Income)
  • May consider some qualifications
 
 

COVID-19 Update

The Roll-Out Continues 
 
  • Cases & hospitalizations have peaked since winter
  • Roll‐out varies by region with KY doing well, TN not doing well
  • Biden orders masks on Federal property
 
 

Biden Agenda

Select First Actions
 
  • Keystone Pipeline Project nixed
  • Drilling banned on Federal Land
  • Paris Treaty rejoined
  • Immigration reform
  • Student loan & other debt relief
  • Infrastructure plans

Equity Market Summary

January 2021

  • S&P 500 down 1.1% in January after robust gains in November/December
  • No major change in sentiment, rather likely a “wait and see” approach to upcoming stimulus
  • S&P 500 at 22x estimated 2021 earnings, 19x 2022 projection

Earnings

4Q Scorecard

  • Two‐thirds of companies in the S&P 500 have reported 4Q results
  • 81% had a positive EPS surprise
  • The blended year‐over‐year EPS growth rate was +1.7%; one month ago expectation was ‐8.5%
  • Ex: Financials sector generally beating low expectations

Outlook

Several Positive Factors

  • Low interest rates, low inflation, another stimulus plan, multiple vaccines, institutional re‐openings, high savings/cash levels, high consumer net worth 
Impact: conducive to gains in GDP, corporate earnings, equity markets

*Data as of 1/31/2021


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.