Click here to learn more about our financial professionals by visiting FINRA's BrokerCheck.

December 2020 Market & Economic Update

December 2020 Market & Economic Update


Good things come in threes, it is often said, and a perfect trifecta of outcomes has propelled the markets to all-time highs in November. A decisive victory in the U.S elections; news of effective Covid-19 vaccines; and positive surprises on third quarter earnings. This was the best November anyone under 92 has ever experienced. The S&P 500 rose 10.9% for the month. It was the best elections November performance since the 1984 Reagan sweep (source:


As of 11/30/2020Returns

US (S&P 500, Symbol: SPY)                              Up 12.49%

The Dow Jones (Symbol: DIA)                          Up 4.04%

The NASDAQ Composite                                  Up 31.24%

Europe (Euro Stoxx 50, Symbol: FEZ)              Down 1.13 %

Emerging Markets (Symbol: EEM)                   Up 8.60%

Bonds (Total Bond Index, Symbol: BND)          Up 5.52%

Gold (Symbol: GLD)                                           Up 16.63%



A Biden win raises the likelihood of a bigger dose of government spending to prop up the economy until one or more vaccines is widely distributed. A vaccine of course, would increase hiring and consumer spending by enabling governments both in the U.S. and around the world to lift restrictions that have choked off economic growth

As we close out the year, it’s a bit of a push-and-pull: The vaccine news has pulled forward the post-pandemic improvement to economic growth, while the surge in virus cases nationally is pushing down near-term growth projections. As we move into 2021, we may see another dip in economic activity in the near term, but the longer-term outlook appears brighter. Easy monetary and fiscal policy, combined with an anticipated COVID-19 vaccine rollout beginning in the first half of 2021, may lead to a strong rise in economic and earnings growth. Aside from the vaccine, other tailwinds include the prospects of a divided Congress and its relatively benign implications for major changes to tax policy, and stronger-than-expected corporate earnings

It’s no secret that there is a large disconnect between the stock market and the economy. To a large extent, the unique nature of the gap reflects an economy that had a small handful of “thrivers” during the pandemic, while most companies and industries were in a very beleaguered state. For a large part of the year, the top five largest stocks in the S&P 500® by market capitalization—Apple, Microsoft, Amazon, Facebook and Alphabet/Google—massively outperformed the other 495 stocks. At their early September peak, these five stocks represented nearly 25% of the S&P 500, so their hefty outperformance lifted the overall index. However, since early September there has been a series of rotations into other areas of the market—not just the thrivers. We have seen shifts from growth stocks to value stocks, from large-cap to small-cap, from defensives to cyclicals, from stay-at-home stocks to get-out-and-about stocks, and from leaders to laggards. Looking ahead, we expect rotations will continue to come in fits and starts, largely driven by virus-related news about economic activity. (Source:

Stock valuations do represent a risk in 2021, especially if corporate profits do not live up to expectations, although valuations will continue to receive implicit support from extremely low interest rates. Valuation is as much an indicator of sentiment as it is a fundamental indicator—and frothy sentiment is also a risk heading into 2021. As the stock market recently reached new peaks and investor optimism has become more widespread, the risk grows that bad news could cause a near-term reversal.

In the meantime, should you have any questions or would like to discuss your situation please don’t hesitate to let us know so we can set up a call or video conference or a meeting if need be


Neal W. Mufti, CFP®                                                        M. Mike Iftaiha, CFP®

Managing Director                                                            Financial Advisor

Opinions expressed here are those of the authors. The information provided is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. International investing involves special risks not present with U.S. investments due to factors such as increased volatility, currency fluctuation, and differences in auditing and other financial standards. These risks can be accentuated in emerging markets. In general, the bond market is volatile as prices rise when interest rates fall and vice versa. This effect is usually pronounced for longer-term securities. Any fixed income security sold or redeemed prior to maturity may be subject to a substantial gain or loss. Past performance is not a guarantee of future results. Indexes cannot be invested in directly, are unmanaged and do not incur management fees, costs and expenses.

Securities and Investment Advisory Services offered through Woodbury Financial Services, Inc., Member FINRA, SIPC and Registered Investment Adviser. Strategic Capital Advisors and Woodbury Financial Services, Inc. are not affiliated.
P.O. Box 64284, St. Paul, MN 55164. 651-738-4000.

PLEASE NOTE: The information being provided is strictly as a courtesy. When you link to any of the web sites provided here, you are leaving this web site. We make no representation as to the completeness or accuracy of information provided at these web sites. Nor is the company liable for any direct or indirect technical or system issues or any consequences arising out of your access to or your use of third-party technologies, web sites, information and programs made available through this web site. When you access one of these web sites, you are leaving our web site and assume total responsibility and risk for your use of the web sites you are linking to.

Investments products and services available only to residents of : Colorado (CO), Florida (FL), Georgia (GA), Illinois (IL), Massachusetts (MA), Maryland (MD), North Carolina (NC), Nevada (NV), Pennsylvania (PA), Rhode Island (RI), Virginia (VA), West Virginia (WV), Washington (DC)

Fee-based advisory services are available only to residents of : California (CA), Colorado (CO), Connecticut (CT), Delaware (DE), District of Columbia (DC), Florida (FL), Georgia (GA), Hawaii (HI), Illinois (IL), Maryland (MD), Massachusetts (MA), Nevada (NV), New Mexico (NM), New York (NY), North Carolina (NC), Ohio (OH), Pennsylvania (PA), South Carolina (SC), Texas (TX), Virginia (VA), Wisconsin (WI).

S&P 500: The S&P 500 is an unmanaged index comprised of 500 widely-held securities
considered to be representative of the stock market in general.
DJIA: The Dow Jones Industrial Average (DJIA) is a price weighted index of 30 of the largest, most widely held stocks traded on the New York Stock Exchange.
NASDAQ: The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System.
The Euro STOXX 50 Index is a market capitalization weighted stock index of 50 large, blue- chip European companies operating within Eurozone nations. Components are selected from the Euro STOXX Index which includes large-, mid- and small-cap stocks in the Eurozone.
The iShares MSCI Emerging Markets Index Fund seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in emerging markets, as represented by the MSCI Emerging Markets Index.
Total Bond Market (BND) is an exchange-traded fund (ETF) created by Vanguard to track the performance of Barclays U.S. Aggregate Float Adjusted Index, which is a broad, market-weighted bond index.
The SPDR Gold Trust (GLD) tracks the performance of the price of gold bullion, less the Trust's expenses.