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The Newsletter

Markets went haywire last week thanks (so the story goes) to some retail traders in a Reddit forum led by a man named Roaring Kitty.  It was hard to pay attention to much of anything else in capital markets, but it was also a busy week for earnings. Industrial companies said that demand was “very, very, very strong” and there was an abundance of commentary on price pressures. Jerome Powell isn’t worried though. Game on!

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The Newsletter

The Year in Review: 2020 was an unprecedented year and The Transcript covered the economy throughout all of its twists and turns. Even though China was battling Covid in 2019, no one really knew what was in store for all of us in 2020. Technology, capital markets, and housing were three industries that boomed. While the stimulus was integral, the economic hero of 2020 was the US consumer. Optimism is high that 2021 will be a more normal year.

Editor’s Request: This weekly newsletter is made possible by donations from our readers. If you like what you are reading, click here to donate (Our suggested donation: $10 per month). Help us keep The Transcript going.

 

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The Newsletter

Succinct Summary: Capital markets are ending 2020 with a bang thanks in part to last week’s hot IPOs.  Business leaders are feeling confident about 2021 and expect next year’s earnings to exceed 2019’s.  Consumer spending is similarly strong.  Even the housing market is stronger than in ’05.  It’s a K shaped recovery for some industries but a vaccine should unleash pent up demand and high unemployment means that interest rates will stay low for longer. Readers should keep an eye on growing supply chain bottlenecks.  This could be a source of some inflationary pressure.

Editor’s Request: This weekly newsletter is made possible by donations from our readers. If you like what you are reading, click here to donate (Our suggested donation: $10 per month). Help us keep The Transcript going.

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The Newsletter

Succinct Summary: The modern economy has never experienced economic carnage on the scale of COVID19.  US GDP is forecast to fall by 30-40% while unemployment is likely to rise to 20-30%.  What matters though, is how long it lasts.  A 30% rate of decline in production for a quarter is different from a 30% decline for a whole year.  As public attention seems to turn from the virus to the economy, debate is on whether we will see a V-shaped recovery or not.  There are lots of reasons why we are unlikely to see such a rapid recovery but there are also glimmers of economic hope.  Still, the path of the economy seems to pale in comparison to the importance of the path of humanity.

Editor’s Request: This weekly newsletter is made possible by donations from our readers. If you like what you are reading, click here to donate (Our suggested donation: $10 per month). Help us keep The Transcript going.

 

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The Newsletter

Succinct Summary:  2020 begins with a surge of optimism.  The consumer continues to be a bright spot for the economy and business sentiment seems to be turning a corner.  Fundamentals are strong and the cherry on top is that interest rates remain low.  Capital markets love this environment.

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The Newsletter

Succinct Summary:  The consumer continues to show strength with higher holiday spending. Business spending isn’t quite as strong though but companies, especially small businesses, are optimistic. As such, most CEOs don’t expect a recession in 2020.  Historically, presidential election years are usually good for the stock market.

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The Newsletter

Succinct Summary: We are deep into the expansionary cycle. The persistent global uncertainty is unnerving investors who are choosing to adopt a wait-and-see approach as they look for clarity from the central banks. The market anticipates rates to go lower and the central banks seem to point to a similar direction. Such accommodative policies will spur this cycle on. 

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