As we enter the spring and summer seasons and hopefully get back to some form of normalcy, risks will certainly remain as we navigate a post-pandemic “new normal”. For those affected by the recent Winter storms, you are in our thoughts and prayers.
Brief Market Recap
While trading frenzies and short selling in equities dominated headlines in January, the bond market, specifically the U.S. Treasury market, stepped into the spotlight in February. Optimism around more stimulus coupled with economic reopening supported higher inflation expectations, which put upward pressure on Treasury yields.
Equity markets also rallied on more promising vaccine news. International developed and emerging markets also generated positive returns in February, but modestly below the U.S. market. Small cap and value stocks were standout performers across global equity markets. Those segments were hardest hit during the initial stages of the pandemic but have come back into favor as the prospects for those companies improve with more reopening measures and widescale vaccine distribution. Higher inflation expectations continued to benefit the prices of most commodities, notably energy and industrial metals. The mid-February extreme cold weather in Texas caused some disruption in oil production, which further supported energy prices.
Investors will be keenly focused on consumer behavior and how fiscal stimulus and the easing of restrictions plays out in consumer spending data. Consumer spending accounts for more than two-thirds of U.S. GDP and thus will be a key component of the economic recovery. The latest retail sales report released in mid-February showed a 5.3% month-over-month jump in sales in January 2021. This far exceeded the forecast of 1.1%, perhaps indicating that stimulus checks are being spent and supporting the real economy.
With more fiscal stimulus on the horizon and additional vaccination progress, the National Retail Federation, the world’s largest retail trading association, is forecasting potentially record-breaking year-over-year retail sales growth in 2021. If that projection is accurate, it would likely accelerate the economic recovery.
Please let us know what else we can do to serve you. We are here for you and happy to just chat about what is going on in your world. We look forward to continuing to help all of our clients plan for and achieve their financial objectives.
US Capital Wealth Advisors, LLC (“USCWA”) is a Texas-based investment advisory firm registered with the United States Securities and Exchange Commission (“SEC”). As an independent, fee-only, registered investment advisor (RIA), USCWA is able to provide sophisticated, holistic wealth management services, with expanded access to investment solutions. We take our fiduciary responsibility to you seriously, which means we are committed to what is in your best interest. Our long-standing objective is to enable you to achieve your financial goals and to act as a trusted resource for you and your family.
This material is for informational purposes only and is an overview of the capital markets and is intended for educational and illustrative purposes only. It is not designed to cover every aspect of the markets and is not intended to be used as a general guide to investing or as a source of any specific investment recommendation. Readers should conduct their own research before making any investments. It is not intended as an offer or solicitation for the purchase or sale of any financial instrument, investment product or service. In preparing this material we have relied upon data supplied to us by third parties. The information has been compiled from sources believed to be reliable, but no representation or warranty, express or implied, is made by US Capital Wealth Advisors, LLC, as to its accuracy, completeness or correctness. US Capital Wealth Advisors, LLC does not guarantee that the information supplied is accurate, complete, or timely, or make any warranties with regard to the results obtained from its use. Opinions included do not necessarily represent the views of US Capital Wealth Advisors, LLC. Please see USCWA’s ADV Part 2 for more information about USCWA.