Week of November 23, 2020

Greetings!

We hope this update finds you and your family safe and doing well.  Here is our weekly update.

• Retail sales numbers came out last week and while sales were up 5.7% vs 2019 numbers, restaurants and other leisure and hospitality businesses are really hurting.  With hopes of a large stimulus bill all but dead until 2021, some hope remains for a slim, targeted bill that would provide a bridge to these industries as we await vaccine distribution.
• While retail has done well overall despite pandemic headwinds, we are starting to see cracks in the economic recovery as the virus rages across the country, resulting in increased restrictions and targeted lockdowns.
• JP Morgan revised their Q1 2021 GDP forecast last week to a contraction in the economy.  In our last update, we noted how the economy as represented by GDP does not always reflect what is happening on wall street, and that profits are only a relatively small part of the economy, and profits can be good while real incomes stagnate.  That remains to be seen and we will be watching earnings forecasts closely to see any evidence of S&P 500 profit forecasts rolling over.  Markets, being a discounting mechanism of the future, continue to look through the near term COVID-19 spikes and to the end of the tunnel, with the rollout of vaccines beginning as early as December 11.  Futures are up again this morning on more positive vaccine news.
• The linked weekly market summary shows just how stark the divergence is between the ''stay at home" tech stocks as represented by the NASDQ index +32% vs the only +2.5% gain of the Dow Jones Industrial Average--the economic recovery stocks.  

Our full recap of last week's events is linked below.  All of us at FMA Advisory wish you and your family a safe and happy Thanksgiving holiday.

The FMA Advisory Team