Wealth Market Update - Dec 2020

Dear Client,

We hope that you and your family had a great Christmas holiday even though the lockdown and other restrictions made it look different than years past. Daily worldwide new infections have jumped from about ~625-650k as of early December to about 700k as of this writing. The month of December also witnessed the beginning of approvals and the production and administration of vaccines. As we embark on the journey of vaccination to build a defence against the pandemic, the year 2021 is well placed to be a year of recovery. We wish you and your family a very Happy New Year 2021.

Macroeconomic and market developments

• In December, both the S&P 500 Index and S&P/TSX Composite Index managed to register gains helped by news about the approval of vaccines from major pharmaceutical companies and their administration.

• In its final meeting of the year, the US Federal Open Market Committee (FOMC) in the US agreed to keep the target interest rates in the range of 0%-0.25% and forecasted to hold interest rates near zero at least until the end of 2023.

• The US Electoral College confirmed Joe Biden as the winner of the 2020 US presidential election with 306 electoral college votes against 232 for Donald Trump. Donald Trump continues to challenge the election results.

• Most of the Trump campaign’s legal challenges have been rejected by the courts which clears the way for Joe Biden to be inaugurated as the 46th President of the United States on January 20th.

• The decision on fiscal stimulus has continued to linger on as Democrats and Republicans spar over the amount of support to be provided. The House of Democrats are requesting $2,000 per month for each eligible adult while Senate Republicans have agreed to $600.

How does this affect my investments?

The stock markets are inherently volatile and short-term market movements are impossible to predict. Historically, market declines have been followed by recoveries and new highs. By staying invested, your portfolio will be well positioned to benefit from a recovery.

If you have any questions about your investment portfolio, your advisor at O’Farrell Wealth and Estate Planning would be happy to discuss them with you.

Sincerely,

O’Farrell Wealth and Estate Planning

Sources: Bloomberg