From the Desk of the PM: Elation and Reality… Breaking Down the Vaccine News and Market Reaction

Yesterday saw stocks surge on the Pfizer vaccine story. Yet there remain some cold, hard facts.

Fireside Charts
Americans Face Eviction, Equities Hit New Highs While Dividends Get Slashed, and the Fed Thinks Long Term

Americans Face Eviction, Equities Hit New Highs While Dividends Get Slashed, and the Fed Thinks Long Term

Happy early Thanksgiving Fireside Charts readers! While we’re grateful for our families, our jobs, and our homes this Thanksgiving, we’re reminded that many are not so lucky—particularly in 2020—and are facing struggles that are likely to worsen in the coming months. A wave of foreclosures and evictions is approaching, many are being pushed out of the workforce, and small businesses are wading further into debt to stay afloat. And the market may have hit new highs recently—the Dow crossed the 30,000 milestone for the first time ever yesterday—sending sentiment soaring, but dividend suspensions and decreases have also spiked this year, surpassing 2008 levels. Could we be due for a pullback? The Fed meanwhile has focused much of its attention on purchasing longer-term treasuries this year, but how will inflation come into play? Finally, the manufacturing sector looks to be holding up well both here and abroad, and growth is accelerating here in the U.S. Will the trend continue into the winter?

Commentary
VIDEO: BCM’s 3Q20 Quarterly Market Update Call with the PM

VIDEO: BCM’s 3Q20 Quarterly Market Update Call with the PM

The third quarter certainly felt a bit calmer in relation to the wild market rides experienced in Q1 and Q2, but important developments remained—a new inflation policy from the Fed, sky-high political tension, and equities' first negative month since March to name a few. What does it all mean for investors as we head into Q4? Click below to hear BCM Lead Portfolio Manager Dave Haviland provide a review of the third quarter and what you should be keeping an eye on as we move forward:

Commentary
BCM 3Q20 Market Commentary: Damn the Pandemic! Batten Down the Economy and Full Steam Ahead!

BCM 3Q20 Market Commentary: Damn the Pandemic! Batten Down the Economy and Full Steam Ahead!

The S&P 500® Index’s 8.5% third-quarter gain was a welcome response to the first half of the year’s histrionics. The quarter had its own volatility as the markets flirted with a 10% correction, but then resolutely continued climbing the proverbial wall of worry. Ultimately, the trends that were in place at the beginning of the quarter continued and little changed.

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Fireside Charts
Americans Face Eviction, Equities Hit New Highs While Dividends Get Slashed, and the Fed Thinks Long Term

Americans Face Eviction, Equities Hit New Highs While Dividends Get Slashed, and the Fed Thinks Long Term

Happy early Thanksgiving Fireside Charts readers! While we’re grateful for our families, our jobs, and our homes this Thanksgiving, we’re reminded that many are not so lucky—particularly in 2020—and are facing struggles that are likely to worsen in the coming months. A wave of foreclosures and evictions is approaching, many are being pushed out of the workforce, and small businesses are wading further into debt to stay afloat. And the market may have hit new highs recently—the Dow crossed the 30,000 milestone for the first time ever yesterday—sending sentiment soaring, but dividend suspensions and decreases have also spiked this year, surpassing 2008 levels. Could we be due for a pullback? The Fed meanwhile has focused much of its attention on purchasing longer-term treasuries this year, but how will inflation come into play? Finally, the manufacturing sector looks to be holding up well both here and abroad, and growth is accelerating here in the U.S. Will the trend continue into the winter?

Fireside Charts
New Records from Equities, the Housing Market Erases Some Great-Recession Damage, and the Fed’s Busy 2020

New Records from Equities, the Housing Market Erases Some Great-Recession Damage, and the Fed’s Busy 2020

Many Americans will be celebrating Thanksgiving in a new home this year—the pandemic-induced housing boom remains red hot as housing completions climb and mortgage rates sink ever lower. Paying for those homes (among other things) may soon grow more difficult for many though, as heavily utilized pandemic unemployment assistance programs are set to expire on December 26th and Congress remains stalled on the next round of stimulus. Meanwhile, it’s been a strong couple of weeks for equities following a slew of good news on vaccine progress: global equities saw their largest 2-week cash inflow on record and the Dow, the S&P 500® Index, and many emerging market indices have recently clinched new record highs. Will AstraZeneca’s announcement of yet another promising vaccine contender add fuel to the fire heading into the holiday season?

Fireside Charts
The Jobs Recovery is Losing Traction, A Look at Housing, and Multiple Emergency Lending Facilities Set to Close

The Jobs Recovery is Losing Traction, A Look at Housing, and Multiple Emergency Lending Facilities Set to Close

The jobs recovery is slowing and is poised to struggle further this winter if the current explosion in new Covid cases continues at the same pace. More than 10 million jobs have been lost since the onset of the pandemic, and the typical duration of unemployment is climbing. Though many used stimulus payments and curbed spending to pay off debt, negotiations on additional funding stalled in Congress this summer, and now many—particularly renters—are faced with being unable to afford their homes, even as the housing market itself enjoys significant growth. The market rotation has continued this week as investors pile into small caps, Energy, and other sectors that have struggled under Covid. Under pressure from the Treasury Department, many of the Fed’s emergency lending programs are being shuttered—though the decision is not without controversy. Will the stability these programs provided in the early days of the pandemic last if Congress “reappropriates” their funding?