Receive Weekly Market Updates via Email

shadow

Weekly Market Update for December 4, 2020

by Jim Ulland

Look at this week’s dichotomy. Mayor Garcetti of Los Angles locked down the city, closed all non-essential businesses, closed outdoor dining, closed playgrounds, forbade vacation travel, and established a curfew. Violators are subject to fine and jail time. On the other hand, the market steadily went higher. If things are as bad as Mayor Garcetti sees them, why hasn’t the market panicked also? In a nutshell, the market has a longer view than the Mayor. The market saw the UK approve the Pfizer/BioNtech vaccine this week and the start of distribution. Approval in the US is imminent with the FDA review set for next week. The vaccines are being sent to metro locations before approval so the distribution can be immediate once approved. Moderna’s vaccine is a week to ten days behind Pfizer/BioNtech. The first vaccines will go to healthcare workers, which will increase hospital capacity since some of the capacity limitations are due to a lack of available staff. Police and fire, essential workers, those in assisted living, and those with underlying conditions will come next. By the time vaccines work their way through people over 65, the crisis will be all but over. When the pandemic ends, a robust recovery is expected.

Even with the lockdowns, unemployment filings declined as did the percent of unemployed in the work force. More jobs were created in November, although the pace of growth was slowed by the lockdowns. Another stimulus package has been revived by Congress and may pass this time. Hopefully, it will sustain small businesses until the pandemic ends. If a business goes bankrupt, the jobs will not come back. This is the fear economists have of lockdowns.

The market steamed forward. All-time highs for the NASDAQ, the DOW and the SP 500 were achieved this week.  The Nasdaq was up +2.12%. The SP 500 also was up +1.67%. This is about the same amount of increase as the previous week. On Monday, the SP 500 was +0.46%, Tuesday +1.13%, Wednesday +0.18%, Thursday -0.06%, and Friday +0.88%. Interest rates on the 10 Yr Treasury rose almost to 1%.

Our fixed income strategy, Intelligent Fixed Income (IFI), run by Nat Beebe, received more national recognition when it was ranked by MarketPlace, powered by Lipper, as having the second-best performance for Q3 among 1180 US fixed income managers who reported performance. We retained the #1 ranking as well in November, per Morningstar Direct, for managers that specialize in preferred stock strategies. This group is a sub-set of all fixed income managers. Please see the disclaimer.

We have been doing numerous Zoom calls with clients and investors interested in our fixed income strategy using preferreds. Contact Nat or myself and we can arrange a discussion.

*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. Clients or prospective clients 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 clients/prospective clients 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.

 

shadow
 

Ulland Investment Advisors

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