LPL Research Market Signals Podcast

A Stimulus Bridge to Economic Recovery

LPL Research

The $900 billion stimulus package will bridge the economy until it can fully reopen in the spring. Meanwhile the Fed is holding the line on interest rates. Markets may be looking forward to a surge in economic activity later in 2021.

Subscribe to the Market Signals podcast series on iTunes, Google Podcasts, or Spotify and find us on the LPL Research YouTube channel.
 

 

Stimulus package

A roughly $900 billion stimulus package will help shore up the economy until spring and give the medical community more time to tackle the latest wave of COVID-19. The package includes expanded unemployment benefits, direct payments to individuals and families, funding for COVID-19 contact tracing and vaccine deployment, and aid for small businesses, hospitals, schools and colleges, live entertainment venues, and airlines.

Economy losing momentum

The recent economic calendar provided further evidence that the economic recovery has lost steam due to restrictions to curb the spread of COVID-19 in the United States. Jobless claims have risen for two straight weeks, retail sales fell for the first time since April 2020, and the index of leading economic indicators has shown small gains (source: Conference Board). The stimulus package takes on even greater importance with the news of a new strain of COVID-19 in the United Kingdom that will lead to additional travel restrictions, reduced mobility, and business closures.

Federal Reserve threads the needle

The Federal Reserve (Fed) concluded its final policy meeting of the year on December 16, keeping its policy rate unchanged at a target range of 0–0.25%. It also sharpened its guidance on how long its bond purchase program, also known as “quantitative easing,” would continue. Market participants were initially disappointed that the Fed didn’t do more, but Fed Chair Jerome Powell made a strong case in his press conference that the change was substantive.

Remarkable 2020 market statistics

2020 was a remarkable year for financial markets. For example, 2020 will be the first time in which the S&P 500 Index ended a year positive after being down more than 30% at any point during the year. Listen to Market Signals for more 2020 market highlights.

Thank you

Thank you to our loyal listeners for tuning in during a very tumultuous year. Our next LPL Research Market Signals podcast will be recorded January 4, 2021.

Chart - Stimulus Piles Keeps Growing

Tune in now

Listen to the entire podcast to get the LPL strategists’ views and insights on current market trends in the US and global economies. To listen to previous podcasts go to Market Signals podcast. You can subscribe to Market Signals on iTunes, Google Podcasts, or Spotify and find us on the LPL Research YouTube channel.

_______________________________________________________________________________________________

 

IMPORTANT DISCLOSURES

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth in the podcast may not develop as predicted and are subject to change.

References to markets, asset classes, and sectors are generally regarding the corresponding market index. All indexes are unmanaged and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.

Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services. LPL Financial doesn’t provide research on individual equities. All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.

All index data is from FactSet.

All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.

This Research material was prepared by LPL Financial, LLC. 

Member FINRA/SIPC

For Public Use — Tracking #: 1-05091388 (12/21)

RES-34476-1120