After modest growth to begin 2020, the economy screeched to a halt as the onset of the pandemic ended the longest economic expansion ever. A record decline in gross domestic product (GDP) in the second quarter was followed by record GDP growth in the third quarter as the economy emerged from lockdowns. After such a tumultuous year in 2020, we take a look at what’s in store for the economy in 2021.
To say that 2020 was a wild year would be an understatement. As we prepare to welcome in the New Year, we take a look at what we can expect in the stock and bond markets, the economy, and a new post-election policy environment in 2021.
Stocks and bonds posted strong returns in 2020 despite a tumultuous year, although that may be surprising only for bonds. We believe we’re in the early stages of a new bull market for stocks, but the opportunities for bond investors may require more patience. The investment landscape for both asset classes may offer new opportunities for investors in the new year.
A new wave of COVID-19 cases threatens to trip up the economy. Increasing cases in Europe and the United States have brought new restrictions on activities, but the market doesn’t appear to be fazed by the recent outbreaks. Progress on developing vaccines has provided a clear boost to sentiment, but prospects for a divided Congress and the potential for more fiscal policy support also may be playing a role.
- Frothy Sentiment Rides Bullish Technicals
- Q3 Results Brighten 2020 Picture
- Market-Friendly Election Outcome
- Record GDP on the Eve of the Election
- Earnings Growth is Approaching
- Market Responses to Election Uncertainty
- What Technology's Correction Means
- Central Bank Season
- The Bull Case for Stocks
- Top 10 Investor Questions