Capital Markets

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February 5, 2021

Capital Market Review as of December 31, 2020

2020 was surreal with COVID-19 spinning the globe into a pronounced recession, yet the markets posted double digit returns for the year. In the 4th quarter, the S&P 500 was +12.1% and the MSCI ACWI ex. US (international stocks) was +17.0%. While the pandemic’s lasting effects will be complex, we are confident our economy will heal in time. Reviving growth will likely be determined by:

  • Health Policy – effective vaccines leading to reduced social restrictions and increased economic activity
  • Fiscal Policy – governments expected to continue providing fiscal relief into 2021
  • Monetary Policy – Central banks preserving low borrowing costs and stabilized market liquidity

We are paying close attention to the following:

  • A potential increase in the marginal tax rates on high earners, those earning $400,000+
  • An increase in corporate business tax - consensus views are an increase from 21% to 28%
  • An evaluation and potential change to digital regulation/technology policy
  • A focus on clean energy and climate change
  • Potential rise in corporate loan defaults
  • Strained relations between the U.S. and China

CLICK HERE to read our full 4Q20 Capital Market Review.