Market Commentary

What will the economy look like in 2021

vaccine will drive the economy

The vaccine will drive the economy to much stronger prospects as the world economy recovers late in the year. The vaccine alone will cause massive pent up demand to be released, travel will be the primary beneficiary, but the expansion will spread to every aspect of economic activity.

Add to this basic premise a huge spending spree from Washington.  The U.S. has already spent trillions of dollars dealing with covid and they are going to spend trillions more in 2021. That money will be spent and a portion will work its way into stock prices.

The last push is going to come from the FED. They are going keep interest rates low and until they see sustained inflation back into the system they will remain very accommodative.

It is hard to see why the stock market won’t go higher even though it is already overpriced. Still, earnings will increase dramatically so maybe it is not as overpriced as it appears.