Financial and Economic Brief - December 1, 2020

by © Liberty Publishing, Inc.

Dow Breaks 30K – Is There a Higher Limit?

In March of 2020 the Dow experienced several crashes that dropped it significantly. Incredibly, the spring of 2020 had the three worst point drops in U.S. history. Pundits, pondered the economic whys of the downturn and many predicted that it would be many years, if not decades, before recovery would take us to prior highs. And yet, in spite of Covid-19 restrictions and obstacles, the Dow soared within a matter of months, breaking its all-time record of 30,000.
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The Fed’s Impact on Mortgage Rates and Acquisition of MBS

In the past, the party line among bankers was that the Fed’s control of the money supply had little to do with long term mortgage rates. However, and not coincidently, as soon as the Covid-19 Pandemic hit; the Fed started buying unlimited amounts of Mortgage Backed Securities (MBS). This action created a new competitor in the secondary market. Thus MBS grew more precious and mortgage rates declined.
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The New SECURE Act Changes Required Minimum Distributions (RMDs) at Retirement Age

The Setting Every Community Up For Retirement Enhancement (SECURE) Act was passed in December 2019. There are several pieces of the legislation that may have broad reaching effects on how retirement funds are distributed as well as decisions about how beneficiaries are taxed when they inherit benefits from a decedent. You may need to do a complete review of your retirement strategy based on how the new legislation will affect your retirement strategy.
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Financial and Economic Brief - December 1, 2020

• Dow Breaks 30K – Is There a Higher Limit? - Pundits predicted that it would be many years, if not decades, before the Dow would recover to highs prior to March of 2020.

• The Fed’s Impact on Mortgage Rates & Acquisition of MBS – In the past, the party line among bankers was that the Fed’s control of the money supply had little to do with long term mortgage rates.

• The New SECURE Act Changes Required Minimum Distributions at retirement age - You may need a complete review of your retirement strategy based on how the new legislation will affect your retirement strategy.

Financial and Economic Brief - November 1, 2020

• GDP – The Latest Numbers for Q3 - Market analysts frequently rely on Real Gross Domestic Product reports in an attempt to determine long- and short-range investment strategies.

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• The Fed’s Definition of the “Money Supply”? - It seems as though we know very little about how the Money Supply affects personal investment and purchasing decisions.

Economic Environment: Unemployment Still High Despite Improvement

At the end of March, Federal Reserve Chairman Ben Bernanke said that the Fed's low interest rate policy is likely to remain in place a while longer to combat lingering problems in the labor market. The jobs market has been strengthening in recent months, but the unemployment rate is still high and may not fall much lower without stronger, sustainable economic growth.

Market Review: Financials Lead Stocks to Strong Returns

Large-, mid-, and small-cap stocks enjoyed a robust quarter with returns in excess of 12%, and growth stocks outperformed value stocks across all market capitalizations. In the large-cap universe, as measured by the S&P 500, all sectors, save utilities, advanced, led by financials and information technology with returns higher than 20%.

Upbeat earnings continue to outweigh mixed economic data and Europe concerns

Stocks moved higher as good earnings reports prevailed over investors' persistent worries about the European debt crisis, as well as some data suggesting a slowdown in the U.S. economic recovery. Markets started the week on a down note in reaction to a steep drop in European stocks...

U.S. Stocks Gain as U.S. Economy Improves

The S&P 500 Index turned in its best quarterly performance since the third quarter of 2009 as the eurozone backed away from the point of collapse, the U.S. economy showed continued signs of life, and central banks pledged to step in and support global economic growth. Investors diverted assets from relatively safe but low-yielding bonds into riskier investments following last year's turmoil. Strong corporate earnings reports also bolstered U.S. equity returns.

Economic Environment: Unemployment Still High Despite Improvement

At the end of March, Federal Reserve Chairman Ben Bernanke said that the Fed's low interest rate policy is likely to remain in place a while longer to combat lingering problems in the labor market. The jobs market has been strengthening in recent months, but the unemployment rate is still high, and it may not fall much lower without stronger, sustainable economic growth.

U.S. Gains on Improved Economy, Strong Corporate Earnings

Despite stumbling near the end of the month, major U.S. stock indexes rose in March, adding to the gains of the first two months of 2012. The S&P 500 Index reached the 1,400 mark for the first time since May 2008, and the Dow Jones Industrial Average climbed to its best level since the beginning of the financial crisis.

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