Like just about everything else, the coronavirus pandemic had a tremendous influence on the stock market’s performance in 2020. Companies in the United States and abroad were suddenly unable to forecast what their profits would be. At one point in 2020 the S&P was down 35 percent, but amidst all the turbulence, by the close of the year the S&P was up 16.26 percent.
At Triumph Capital, we work hard to stay on top of changes in the market and are committed to making prudent adjustments inside clients’ portfolios when necessary. Our team of experienced financial advisors works to manage investments according to personalized strategies and customized plans.
So, how are things looking after the first quarter of 2021? Gross domestic product (GDP), an important economic indicator, is driven by consumer consumption and with the release of coronavirus vaccines in December 2020, more people began getting back to work and spending increased. Forecasters are hopeful that consumption will continue to rise and lead to corporate profits.
As a fiduciary, our financial advisors also monitor the Purchasing Managers Index (PMI) for a look at both the upstream and downstream activity in 19 industries. The purpose of the PMI numbers is to provide information about current business conditions not only in Denver, CO, but on a national and global level. A PMI above 50 indicates an expanding economy, whereas a PMI below 50 is worrisome. Globally, we currently have a PMI of 53 while the United States is at a dynamic 59.1.
A combination of three things tend to lead to an economic recession: a spike in commodity prices, an aggressive Federal Reserve, and extreme valuations. What do we have happening in 2021 in those three areas? Many Americans can remember times in the 1970s when there were lines of Cadillacs waiting to fill up their gas tanks and they couldn’t. When they could fill up it was only a few gallons. That experience was due to a spike in commodities. More recently, the price of a barrel of oil hit zero for a day in April of 2020 - though overall for that month the average barrel of oil was $11.57. As of April 7, 2021, the price was sitting at $59.65. Though still fairly inexpensive, our advisors anticipate seeing oil prices continue to trend higher.
The Federal consensus is that there will not be an interest rate hike until 2023. But what if inflation starts to take over? One reason inflation could pick up in the future is if the unemployment rate drops severely. If inflation kicks in, Americans may see the Fed pushing to raise rates sooner than previously projected.
Triumph Capital Management is committed to keeping clients informed through regular communication. Our clients receive the best service from our trusted team of fiduciary advisers and are encouraged to reach out with any questions or concerns they may have.
Triumph Capital Management
1610 Wynkoop Street Suite 550
Denver, CO 80202
Advisory services offered through Triumph Capital Management, a registered investment advisor SEC#282814. Insurance Services offered through Triumph Capital, LLC #619821