Wealth Market Update - Jan 2021

Dear Client,

We hope that you and your family are having a great start to the year 2021. The mild weather thus far has given way to Canadian winters with double-digit negative temperatures. Apart from the extreme weather, the stay-at-home orders is also keeping people largely indoors. While society has been troubled by the limits put on their mobility; the light at the end of tunnel is now visible with vaccine inoculations underway. The daily worldwide new infections have shown a declining trend over the past few weeks, dropping from ~750k-800k to ~600k at the time of this writing. Below we mention a few noteworthy developments over the last month.

Macroeconomic and market developments

• In January, both the S&P 500 Index and S&P/TSX Composite Index continued their upward momentum from last month helped by the Democrats wresting control of the Senate from the Republicans.

• A single party control over the House and Senate implies less bottlenecks to pass the much-awaited fiscal stimulus by investors. The Biden administration has indicated a package of ~$1.9 trillion to help the economy and curtail the pandemic. Expectations of a large stimulus bill have fueled the expectations of rising inflation.

• The reflation trade saw the financials, industrials and energy sectors advancing during the first half of the month. The second half of the month saw the “stay-at-home” stocks recovering some lost ground as fresh lockdown orders gathered pace around the globe.

• Alimentation Couche-Tard, the Canadian convenience store operator abandoned talks to acquire France’s Carrefour SA, a supermarket operator, after opposition from the French finance minister on concerns of control over food supply.

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