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Weekly Market Update for December 11, 2020

by Jim Ulland

Healthcare workers and assisted living staff and residents may start lining up for Pfizer’s Covid vaccine as early as Monday. The FDA still must give final approval after the Advisory Committee signed off Thursday. Covid cases and deaths have spiked, thus, everyone has a sense of urgency to get vaccinations started. The second leading vaccine is from Moderna. An FDA Advisory Committee will meet to vote on Moderna’s vaccine next Thursday 12/17. Approval in the committee is almost a certainty. After that, the FDA will take a day or two to give its blessing, making more vaccine available.

The urgency for approval of vaccines is triggered by both the spike in infections and the unemployment caused by added lockdowns. The unemployment filings were up over 100,000 this week. This is before the full impact of the lockdowns has been felt. New York City will close all indoor dining on Monday. California and New York have a long list of businesses forced to close, mostly those that took the brunt of past closures: restaurants, bars, fitness centers, some schools, social gatherings, Broadway shows, and movie theaters. Most states are imposing some restrictions but not as severe as New York or California.

Another stimulus package is in limbo as the legislative leaders negotiate. A bridge seems to be needed to get the country from now to the time when vaccines succeed in controlling this pandemic. Congress is set to adjourn soon, so there is little time to reach a stimulus agreement.

For the rest of the month, headlines, which often influence the market, should herald the number of people being vaccinated and the increased number of doses available. This should return a positive tone to the market after this week’s pause. The market wants to look through the lockdowns to the time when the pandemic will be controlled and the lockdowns completely lifted, probably mid-summer. For example, Airbnb went public this week. The stock price doubled the first day on the expectation that things will return to normal. All-time highs for the NASDAQ and the SP 500 were made early in the week as well. By the week’s conclusion, the Nasdaq was down 0.7%. The SP 500 also was down 1.0%. On Monday, the SP 500 was -0.19%, Tuesday +0.28%, Wednesday -0.79%, Thursday -0.13%, and Friday -0.13%. Interest rates stayed relatively flat.

Our fixed income strategy, Intelligent Fixed Income (IFI), run by Nat Beebe, is receiving a lot of interest after its #2 ranking among 1180 fixed income managers in Q3 and for our continued #1 ranking among preferred stock managers per Morningstar Direct by Lipper (disclaimers below). We are likely to have a bank and an insurance company as new clients by yearend. We love referrals.

Ranking per Lipper in US Fixed Income (“All Styles” category). Performance is net of fees and inclusive of cash.

**Ranking per Morningstar Direct in Publicly Traded Peer Group. Publicly Traded Peer Group Requirements: Minimum $150 million in ETF/Fund; Excludes low-duration funds; Excludes closed-end funds; Includes share class with largest AUMs; Excludes real estate preferred funds; Minimum 3-year track record. Performance is gross of fees and inclusive of cash.

The information contained in this commentary is not investment advice for any person. It is presented only for informational purposes to assist in explaining factors that may have had an impact in the past or may have an impact in the future on client portfolios or composites. All expressions of opinion reflect the judgment of the firm on this date and are subject to change. Included information has been obtained from sources considered reliable, but we do not guarantee that the foregoing materials are accurate or complete. Investors should contact Ulland Investment Advisors for individualized information prior to deciding to participate in any portfolio or making any investment decision. Ulland Investment Advisors does not provide tax advice. All investors are strongly urged to consult with their tax advisors regarding any potential investment.

Performance quoted is past performance. Past performance is not indicative of future performance. There is always a possibility of loss. Current performance may be lower or higher than performance shown. Differences in performance versus the indices/funds may be attributable, in part, to differences in the asset make-up of the strategy vs. the indices/funds. Performance calculations are based on the reinvestment of dividends and gains unless these amounts were paid out to the client. Performance is subject to revision. See www.ullandinvestment.com for important strategy disclosures.

This does not constitute a recommendation of any investment strategy or product for a particular investor. Investing involves risk; principal loss is possible. Investors should consider the investment objectives, risk, charges, and expenses of the strategy carefully before investing. This and other important information can be obtained by contacting Ulland Investment Advisors.

 

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Ulland Investment Advisors

4550 IDS Center · Eighty South Eighth Street · Minneapolis MN 55402 · Telephone: 612-312-1400 · Facsimile: 612-204-3464