Weekly Market Commentary 3/1/2021

Weekly Market Commentary 3/1/2021

How Are Your Investments Doing Lately?  Receive A Free, No-Obligation 2nd Opinion On Your Investment Portfolio >

Weekly Financial Market Commentary

March 1, 2021

Our Mission Is To Create And Preserve Client Wealth

Students of financial markets may have noted a historically unusual event last week.

On Thursday, the yield on 10-year U.S. Treasury notes briefly matched the dividend yield for the Standard & Poor’s (S&P) 500 Index. This type of convergence is uncommon. In normal times, the yield on 10-year Treasuries tends to be higher than the dividend yield of the S&P 500. Felix Salmon of Axios explained:

“The 10-year Treasury note is a risk-free asset: If you hold it for 10 years, you know exactly how much it’s going to return…The S&P 500 dividend yield is normally lower than the risk-free rate. Investors earn less in dividends than [they] would holding the same amount of money in Treasury bonds, but they hope that rising stock prices will make up the difference.”

These, however, are not normal times.

Throughout much of 2020, the S&P 500 Index offered investors a return comparable to, or higher than, 10-year Treasuries. Low Treasury yields reflected the Federal Reserve’s highly accommodative monetary policy, which kept the fed funds rate near zero to support the economy through the pandemic. Since August 2020, however, the yield on 10-year T-notes has been creeping higher despite the Fed’s actions. Last week, it closed at 1.46 percent.

Rising yields appeared to concern investors last week. Ben Levisohn of Barron’s reported:

“Usually, we can point to a big event or a piece of economic data that shook up the market, but that wasn’t the case this time. The data were solid, with weekly jobless claims dropping more than expected, durable-goods orders rising more than forecast, and personal income getting a big boost from stimulus checks sent out in January…But there was the 10-year Treasury yield.”

Rising Treasury yields suggest bond investors think the economy is likely to strengthen and pent-up consumer demand could spark spending on shopping, dining, and social events. A spending spree could lead to higher inflation, reported Elliot Smith of CNBC. Rising yields also could signal weak demand for U.S. Treasuries, according to Levisohn.

Last week, major U.S. stock indices finished lower.

And the most expensive cities in the world are… Every year, The Economist Intelligence Unit (EIU) reports on the worldwide cost of living by surveying the cost of 138 goods and services in major cities around the world.

As of September 2020, prices were up just 0.3 percent, year-to-year. The cost of consumer staples remained fairly steady, overall. However, the prices for recreation (which includes personal electronics), personal care, tobacco, alcohol, and domestic help, increased. The report stated:

“Amid the pandemic, price-conscious consumers have also opted for cheaper products in many countries, increasing price competition for less-expensive goods…On the other hand, high-earning consumers have been comparatively unaffected by the pandemic. While they are likely to shop less, prices of premium products have remained resilient. Supply-chain problems have also had differing impacts on different goods, pushing up the price of high-demand products such as computers in some cities.”

Regionally, prices fell in Latin America, North America, Eastern Europe, and Africa. They increased in the Middle East, Asia, and Western Europe. The EIU’s World Cost of Living Index found, during 2020, the most expensive cities in the world were:

·         Paris, France

·         Hong Kong, China

·         Zurich, Switzerland

·         Singapore, Malaysia

·         Osaka, Japan

·         Tel Aviv, Israel

·         New York, United States

·         Geneva, Switzerland

·         Los Angeles, United States

·         Copenhagen, Denmark

 

The least expensive were:

·         Damascus, Syria

·         Tashkent, Uzbekistan

·         Almaty, Kazakhstan

·         Buenos Aires, Argentina

·         Karachi, Pakistan

·         Caracas, Venezuela

·         Lusaka, Zambia

·         Chennai, India

·         Bangalore, India

·         New Delhi, India

Weekly Focus – Think About It
“The wish to travel seems to me characteristically human: the desire to move, to satisfy your curiosity or ease your fears, to change the circumstances of your life, to be a stranger, to make a friend, to experience an exotic landscape, to risk the unknown.”
–Paul Theroux, Travel writer and novelist

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Investment advice offered through Research Financial Strategies, a registered investment advisor.
* This newsletter and commentary expressed should not be construed as investment advice.
* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.  However, the value of fund shares is not guaranteed and will fluctuate.
* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.
* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.
* All indexes referenced are unmanaged. The volatility of indexes could be materially different from that of a client’s portfolio. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. You cannot invest directly in an index.
* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.
* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
* Gold represents the afternoon gold price as reported by the London Bullion Market Association. The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce.
* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.
* The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.
* The Dow Jones Industrial Average (DJIA), commonly known as “The Dow,” is an index representing 30 stock of companies maintained and reviewed by the editors of The Wall Street Journal.
* The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system.
* International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.
* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.
* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
* Past performance does not guarantee future results. Investing involves risk, including loss of principal.
* The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee it is accurate or complete.
* There is no guarantee a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
* Asset allocation does not ensure a profit or protect against a loss.
* Consult your financial professional before making any investment decision.
* To unsubscribe from the Weekly Market Commentary please reply to this e-mail with “Unsubscribe” in the subject.

 

Investment advice offered through Research Financial Strategies, a registered investment advisor.

 

Sources:
https://finance.yahoo.com/quote/%5ETNX/history?p=%5ETNX
https://www.axios.com/treasury-yield-sp-convergence-efc3ee98-279a-4713-960d-7e52216deed1.html
https://www.wsj.com/articles/jerome-powell-sees-easy-money-policies-staying-in-place-11614092400?mod=searchresults_pos1&page=1&mod=article_inline (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2021/03-01-21_WSJ-Jerome_Powell_Sees_Easy-Money_Policies_Staying_in_Place-Footnote-3.pdf)
https://www.multpl.com/s-p-500-dividend-yield/table/by-month (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2021/03-01-21_Multpl-S_and_P_500_Dividend_Yield_by_Month-Footnote_4.pdf)
https://www.treasury.gov/resource-center/data-chart-center/interest-rates/pages/TextView.aspx?data=yieldYear&year=2020
https://www.barrons.com/articles/the-stock-markets-rally-could-be-nearing-an-end-how-we-know-51614386520?refsec=the-trader (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2021/03-01-21_Barrons-This_Data_Point_Signals_the_Rally_Could_be_Nearing_an_End-Footnote_6.pdf)
https://www.cnbc.com/2021/02/26/bank-of-englands-haldane-warns-on-inflation-bond-yields-move-higher.html
https://www.eiu.com/n/campaigns/worldwide-cost-of-living-2020 (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2021/03-01-21_TheEconomist-How_is_COVID-19_Affecting_the_Prices_of_Consumer_Goods-Footnote_8.pdf)
https://www.economist.com/graphic-detail/2020/11/18/where-are-the-worlds-most-expensive-cities (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2021/03-01-21_TheEconomist-Where_are_the_Worlds_Most_Expensive_Cities-Footnote_9.pdf)
https://en.wikipedia.org/wiki/List_of_cheapest_cities
https://www.goodreads.com/author/quotes/9599.Paul_Theroux

Weekly Market Commentary 3/1/2021

Market Commentary February 22, 2021

How Are Your Investments Doing Lately?  Receive A Free, No-Obligation 2nd Opinion On Your Investment Portfolio

Weekly Financial Market Commentary

February 22, 2020

Our Mission Is To Create And Preserve Client Wealth

It’s a contrarian’s dream come true.

Contrarian investors like to buck the trend. They buy when other investors are selling and sell when others are buying.

Last week, Bank of America (BofA) delivered a contrarian’s dream. BofA’s monthly survey of 225 global asset managers, who are responsible for $645 billion in assets under management, showed the managers were almost fully invested, according to CNBC.

The survey showed asset managers’, “…cash levels at the lowest since March 2013, global equity allocations at a 10-year high, and a record number of respondents reporting taking a ‘higher than normal’ level of risk,” reported Randall Forsyth of Barron’s.

Asset managers’ optimism reflects central banks’ monetary policies, governments’ fiscal stimulus programs, and positive signs of economic recovery.

  • Central bank actions are supporting low interest rates. Low interest rates encourage economic growth by making money inexpensive for companies and individuals to borrow. In the United States, the real (adjusted for inflation) 10-year Treasury yield finished last week at -0.80 percent, according to the S. Treasury.
  • Government stimulus is flooding world markets with cash. “Although percentage cash levels held by investment managers are falling, they are not falling fast enough to keep up the rapid expansion of money still flooding the system…U.S. household savings at the end of 2020 were still almost $1 trillion above pre-COVID levels…,” reported Mike Dolan of Reuters.
  • Economic recovery is gaining steam. While the virus continues to be a risk, last week much of the economic data in the United States was positive, with retail sales exceeding expectations and manufacturing holding steady, reported Nicholas Jasinski of Barron’s. Economic growth is forecast to be about 6 percent in 2021, reported Reuters.

Last week, yields on 10-year Treasuries moved higher and the Dow Jones Industrial Average advanced. The Standard & Poor’s 500 Index and Nasdaq Composite both finished the week lower.

It’s black history month. Throughout the month of February, people in the United States celebrate the achievements of Black Americans. President Gerald Ford started the tradition in 1976 to “…seize the opportunity to honor the too-often neglected accomplishments of Black Americans in every area of endeavor throughout our history.” Test your knowledge by taking this brief quiz.

  1. In 1972, the first Black woman elected to Congress launched a campaign for the Democratic Presidential nomination with the slogan: Unbought and Unbossed. She once said, “If they don’t give you a seat at the table, bring a folding chair.” What was her name?
    1. Yvonne Brathwaite Burke
    2. Shirley Chisholm
    3. Barbara Jordan
    4. Gwen Moore

 

  1. Eugene Bullard was the first African American pilot to serve in the Armed Forces. He worked as an air gunner for the French Army and served in two American wars. Which wars did he serve in?
    1. World War I and World War II
    2. World War II and Korean War
    3. Korean War and Vietnam War
    4. Vietnam War and Grenada

 

  1. One Black American author, who has won the National Book Award, the Carnegie Medal for Excellence in Fiction, the MacArthur Genius Grant, and many other awards, described the work this way, “When you write, it’s like braiding your hair. Taking a handful of coarse unruly strands and attempting to bring them unity.” What is the author’s name?
    1. Candace Carty-Williams
    2. Marlon James
    3. Edwidge Danticat
    4. Ta-Nehisi Coates

 

  1. Alabamian Percy Julian didn’t attend high school, but he earned a PhD from DePauw University. Julian graduated Phi Beta Kappa at the top of his class. Historically, he is regarded as one the most influential leaders in his field. What was his field of study?
    1. Law
    2. Medicine
    3. Chemistry
    4. History

 

Quiz Answers:

  1. B – Shirley Chisholm.
  2. A – World War I and World War II.
  3. C – Edwidge Danticat.
  4. C – Chemistry.

 

Weekly Focus – Think About It
“No person is your friend who demands your silence, or denies your right to grow.”
–Alice Walker, American novelist and poet

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Investment advice offered through Research Financial Strategies, a registered investment advisor.
* This newsletter and commentary expressed should not be construed as investment advice.
* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.  However, the value of fund shares is not guaranteed and will fluctuate.
* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.
* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.
* All indexes referenced are unmanaged. The volatility of indexes could be materially different from that of a client’s portfolio. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. You cannot invest directly in an index.
* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.
* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
* Gold represents the afternoon gold price as reported by the London Bullion Market Association. The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce.
* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.
* The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.
* The Dow Jones Industrial Average (DJIA), commonly known as “The Dow,” is an index representing 30 stock of companies maintained and reviewed by the editors of The Wall Street Journal.
* The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system.
* International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.
* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.
* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
* Past performance does not guarantee future results. Investing involves risk, including loss of principal.
* The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee it is accurate or complete.
* There is no guarantee a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
* Asset allocation does not ensure a profit or protect against a loss.
* Consult your financial professional before making any investment decision.
* To unsubscribe from the Weekly Market Commentary please reply to this e-mail with “Unsubscribe” in the subject.

 

Investment advice offered through Research Financial Strategies, a registered investment advisor.

Weekly Market Commentary 3/1/2021

Weekly Market Commentary 2/8/2021

How Are Your Investments Doing Lately?  Receive A Free, No-Obligation 2nd Opinion On Your Investment Portfolio >

Weekly Financial Market Commentary

February 8, 2020

Our Mission Is To Create And Preserve Client Wealth

It’s not a black diamond ski run yet, but the yield curve for U.S. Treasuries is steeper than it has been in a while.

A yield curve is the line on a graph showing yields for different maturities of bonds. Yield curves provide insight to bond investors’ perceptions about the economy. There are four basic types of yield curves:

·         Normal: The slope is upward because short-term bond yields are lower than long-term bond yields. A normal curve for U.S. Treasuries has a yield gap of about 2.3 percent between 30-year Treasury bonds and 3-year Treasury bills, according to Fidelity. On Friday, the difference was 1.78 percent.

·         Steep. The upward curve is unusually steep. This may occur when an economic expansion is underway, demand for capital pushes interest rates higher, and inflation rises.

·         Flat: There is no curve because short- and long-term bonds have similar yields. Flattening yield curves can be a precursor of economic slowdown and lower interest rates.

·         Inverted: The curve slopes down. Long-term bond yields are lower than short-term bond yields. Some believe an inverted yield curve is a signal that recession is ahead.

 

Right now, the steepening of the U.S. Treasury yield curve is positive news, according to a source cited by Ben Levisohn of Barron’s:

“Historically, [a steepening yield curve is a] good sign for both the economy and stock markets…But it is also an early warning sign that the clock is ticking on how long the Fed will remain on hold, or easy, before beginning to hike rates and tighten financial conditions to combat the threat of runaway inflation.”

Inflation concerns were part of last week’s debate over the size of the pending stimulus. If stimulus is too small, economic growth and jobs recovery may falter. If it’s too big, the economy may overheat and inflation could become an issue, according to economist Lawrence Summers in The Washington Post.

Judging by January’s anemic jobs report, it could be a while before the economy runs too hot.

The Bureau of Labor Statistics reported 49,000 jobs were created last month. At that rate, it would take a very long time for the economy to recover the jobs lost in 2020. The pace of hiring is expected to accelerate as more Americans get vaccinated and new stimulus is distributed, reported Matthew Klein of Barron’s.

Major U.S. stock indices finished the week higher.

Bits and bobs.
Investors are always looking for news that might lead them to new trends in the market. Here are a few fascinating tidbits from last week:

·         Currency competition. China would really like the yuan to replace the U.S. dollar as the world’s favored currency. Reuters reported, “…the global system for financial messaging and cross-border payments, has set up a joint venture with the Chinese central bank’s digital currency research institute and clearing centre, a move some see as a sign that China wants to explore global use of its planned digital yuan.”

​·         Putting a price tag on nature. The Treasury of the United Kingdom commissioned an expert panel to evaluate the contributions of species and ecosystems to the size and growth of economies and evaluate how loss of biodiversity will affect economies in the future. The 600-page Dasgupta Review reports that sustaining the world’s current level of economic growth and standards of living (a.k.a. “global demand for the biosphere’s goods and services and the biosphere’s current capacity to supply them on a sustainable basis”) will require 1.6 Earths.
·         Veggies telling tales. Scientists are finding ways to help plants monitor the environment and communicate their findings. Researchers at the Massachusetts Institute of Technology (MIT) embedded nanotubes in spinach plants to look for chemical compounds found in explosives, like landmines. MIT News explained, “When one of these chemicals is present in the groundwater sampled naturally by the plant, carbon nanotubes embedded in the plant leaves emit a fluorescent signal that can be read with an infrared camera. The camera can be attached to a small computer similar to a smartphone, which then sends an email to the user.”

 

Weekly Focus – Think About It
“Here’s to the crazy ones. The misfits. The rebels. The troublemakers. The round pegs in the square holes. The ones who see things differently…Because they change things. They push the human race forward. And, while some may see them as the crazy ones, we see genius. Because the people who are crazy enough to think they can change the world, are the ones who do.”

–Rob Siltanen, Advertising marketer

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Investment advice offered through Research Financial Strategies, a registered investment advisor.
* This newsletter and commentary expressed should not be construed as investment advice.
* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.  However, the value of fund shares is not guaranteed and will fluctuate.
* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.
* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.
* All indexes referenced are unmanaged. The volatility of indexes could be materially different from that of a client’s portfolio. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. You cannot invest directly in an index.
* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.
* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
* Gold represents the afternoon gold price as reported by the London Bullion Market Association. The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce.
* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.
* The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.
* The Dow Jones Industrial Average (DJIA), commonly known as “The Dow,” is an index representing 30 stock of companies maintained and reviewed by the editors of The Wall Street Journal.
* The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system.
* International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.
* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.
* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
* Past performance does not guarantee future results. Investing involves risk, including loss of principal.
* The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee it is accurate or complete.
* There is no guarantee a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
* Asset allocation does not ensure a profit or protect against a loss.
* Consult your financial professional before making any investment decision.
* To unsubscribe from the Weekly Market Commentary please reply to this e-mail with “Unsubscribe” in the subject.

 

Investment advice offered through Research Financial Strategies, a registered investment advisor.

Sources:
https://www.bloomberg.com/news/articles/2021-02-04/treasuries-curve-steepens-to-2015-levels-led-by-losses-in-gilts (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2021/02-08-21_Bloomberg-Treasuries_Curve_Steepens_to_2015_Levels_with_a_Bump_from_BOE-Footnote_1.pdf)
https://www.fidelity.com/learning-center/investment-products/fixed-income-bonds/bond-yield-curve
https://www.treasury.gov/resource-center/data-chart-center/interest-rates/pages/textview.aspx?data=yield
https://www.barrons.com/articles/stock-market-bounces-back-for-right-reasons-heres-why-51612575023?refsec=the-trader (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2021/02-08-21_Barrons-The_Stock_Market_is_Bouncing_Back_for_the_Right_Reasons_but_the_Yield_Curve_Could_Spell_Trouble-Footnote_4.pdf)
https://www.washingtonpost.com/opinions/2021/02/04/larry-summers-biden-covid-stimulus/ (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2021/02-08-21_TheWashingtonPost-Opinion-The_Biden_Stimulus_is_Admirably_Ambitious_but_It_Brings_Some_Big_Risks_Too-Footnote_5.pdf)
https://www.bls.gov/news.release/empsit.nr0.htm
https://www.barrons.com/articles/januarys-jobs-report-underscores-urgency-of-vaccination-push-51612568728 (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2021/02-08-21_Barrons-Januarys_Jobs_Report_Underscores_Urgency_of_Vaccination_Push-Footnote_7.pdf)
https://www.reuters.com/article/china-swift-pboc/update-1-swift-sets-up-jv-with-chinas-central-bank-idUSL1N2KA0MS
https://www.nature.com/articles/d41586-019-02882-0
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/957291/Dasgupta_Review_-_Full_Report.pdf (Pages 122-123) (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2021/02-08-21_The_Economics_of_Biodiversity-Footnote_10.pdf)
https://news.mit.edu/2016/nanobionic-spinach-plants-detect-explosives-1031
https://www.goodreads.com/quotes/tag/change

Weekly Market Commentary 3/1/2021

Weekly Market Commentary February 1, 2021

How Are Your Investments Doing Lately?  Receive A Free, No-Obligation 2nd Opinion On Your Investment Portfolio >

Weekly Financial Market Commentary

January 1, 2021

Our Mission Is To Create And Preserve Client Wealth

They say people watching the same event often see different things. That seems to have been the case last week when share prices of a few companies experienced tremendous volatility.

Some cast the events as a David vs. Goliath morality tale, however, Michael Mackenzie of Financial Times saw it differently. He wrote, “…a speculative surge from retail investors using borrowed money…has in the past signaled a frothy market top.” (In financial lingo, a market is ‘frothy’ when investors drive asset prices higher while ignoring underlying fundamentals.)

No matter how you characterize it, the events of last week were unusual. Felix Salmon of Axios explained, “Almost never does a stock trade more than twice its market value in a single day…It has happened 7 times this week already, and 20 times this month…What we’ve seen in the past month, and especially the past week, is certain companies becoming little more than vehicles for short-term gambling.”

While the social-media-driven trading spectacle was fascinating, it overshadowed other substantive news that may affect more companies over a longer period of time:

  • The Federal Reserve left interest rates unchanged near zero. Fed Chair Jerome Powell indicated rates will remain low until jobs have recovered, even if inflation moves beyond the Fed’s target rate, reported Joy Wiltermuth and Andrea Riquier of MarketWatch.
  • The economy continued to grow during the fourth quarter of 2020. The Bureau of Economic Analysis reported gross domestic product (GDP), which is the value of all goods and services produced, increased from the third to the fourth quarter of 2020. The pace of growth slowed significantly from the third quarter as the coronavirus continued to interfere with economic activity.
  • A highly anticipated vaccine proved less effective than anticipated. Markets responded negatively to the news that a single-shot vaccine was 66 percent effective globally. The value of the vaccine is greater than the statistic suggests, according to experts cited by Ben Levisohn of Barron’s. The shot, “…prevented severe symptoms in 85 percent of patients, meaning that even those who caught the virus had cough, sniffles, and fevers but avoided the worst outcomes…”
  • Company earnings in the fourth quarter were better-than-expected. On Friday, John Butters of FactSet wrote, “Overall, 37 percent of the companies in the S&P 500 have reported actual results for Q4 2020 to date. Of these companies, 82 percent have reported actual EPS [earnings-per-share] above estimates…”

Last week, major U.S. stock market indices finished lower.

What’s new? In January, the Merriam Webster Dictionary added 520 words to its pages. The additions include new words that have found their way into common use, as well as expanded definitions for words that were already well-established. Here is a sampling of the new entries:

  • Hygge: A cozy quality that makes a person feel content and comfortable
  • Pod: A small group of people who interact closely while minimizing outside contact to avoid exposure to a contagious disease
  • Hard pass: A firm refusal or rejection
  • Cancel culture: The practice of engaging in mass canceling as a way of expressing disapproval and applying social pressure
  • Crowdfunding: Obtaining needed funding by asking a large number of people, usually members of an online community, for contributions
  • Gig worker: A person who works temporary jobs as an independent contractor or freelancer
  • Second gentleman: The husband or male partner of a vice president or second in command of a country or jurisdiction

As new words become common or expand their meanings, other words become obsolete. What are some words that explained the world when you were younger and have fallen out of use? Britches, floppy disk, icebox, and yuppie come to mind.

Weekly Focus – Think About It
“For last year’s words belong to last year’s language
And next year’s words await another voice.”
–T.S. Eliot, Poet, editor, playwright

 

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Investment advice offered through Research Financial Strategies, a registered investment advisor.
* This newsletter and commentary expressed should not be construed as investment advice.
* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.  However, the value of fund shares is not guaranteed and will fluctuate.
* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.
* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.
* All indexes referenced are unmanaged. The volatility of indexes could be materially different from that of a client’s portfolio. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. You cannot invest directly in an index.
* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.
* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
* Gold represents the afternoon gold price as reported by the London Bullion Market Association. The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce.
* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.
* The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.
* The Dow Jones Industrial Average (DJIA), commonly known as “The Dow,” is an index representing 30 stock of companies maintained and reviewed by the editors of The Wall Street Journal.
* The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system.
* International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.
* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.
* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
* Past performance does not guarantee future results. Investing involves risk, including loss of principal.
* The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee it is accurate or complete.
* There is no guarantee a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
* Asset allocation does not ensure a profit or protect against a loss.
* Consult your financial professional before making any investment decision.
* To unsubscribe from the Weekly Market Commentary please reply to this e-mail with “Unsubscribe” in the subject.

Weekly Market Commentary 3/1/2021

Weekly Market Commentary 01/19/2021

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Weekly Financial Market Commentary

January 19, 2021

Our Mission Is To Create And Preserve Client Wealth

Investors were rocked by economic data showing the economy hit the brakes hard in December.

Last week, major U.S. stock indices decelerated as investors gaped at the economic damage caused by the rising number of coronavirus cases around the world. There have been more than two million COVID-19 deaths globally, with more than 390,000 deaths in the United States. The spread has resulted in new lockdowns and restrictions and has hurt economic recovery.

Ben Levisohn of Barron’s reported:

“This past week – with the market looking ahead to the inauguration and what might be in store following the Capitol riots and Donald Trump’s second impeachment – was a terrible one for economic data. Whether it was small-business confidence, consumer inflation, or just about anything else, the numbers painted a picture of an economy that was slowing more rapidly than expected. Initial jobless claims, which spiked to their highest level since August, and retail sales, which fell 0.7 percent, were particularly frightening.”

On Thursday, President-elect Biden explained his $1.9 trillion economic relief package. The announcement of new stimulus didn’t move investors. That may be because the potential impact of a new stimulus plan has already been priced into markets, as has the new administration’s longer-term plans for infrastructure spending, reported Katherine Greifeld of Bloomberg. The relief package that passes Congress may be smaller – about $1.1 trillion, according to a Goldman Sachs economist cited by Randall Forsyth of Barron’s.

Investors are keeping an eye on inflation, which remains relatively low but has begun trending higher, according to Jeffry Bartash of MarketWatch. During the past few months, the core rate of inflation has remained below the Federal Reserve’s 2 percent target. However, inflation expectations and bond yields have been moving higher, reported Jonnelle Marte, Ann Saphir, and Howard Schneider of Reuters. As bonds provide more attractive returns, income investors may shift away from stocks and into less risky opportunities.

Last week, the Standard & Poor’s 500 Index lost more than 1 percent for the first time since October.  
But the good news is t​he Research Financial Strategies Aggressive Growth stock model is +3.82% year to date!

Trading teeth for treasure during the pandemic.
Around the globe, the pandemic helped make 2020 one the most challenging years ever for dentists. The Dental Tribune reported most dental offices around the world closed their doors in March. While most eventually reopened, the impact on dental practices and suppliers was significant. Many adopted cost-cutting measures.

The Tooth Fairy did not suffer the same fate.

In August 2020, Delta Dental’s Original Tooth Fairy Poll® found, “…the Tooth Fairy’s average cash gift increased 30 cents for a lost tooth, for a total of $4.03 per tooth.” The value of a lost tooth has tripled since the poll began in 1998. (The Tooth Fairy exchange rate was about $1.30/tooth back then.)

Four dollars may seem steep, but the United States isn’t the only country where lost teeth command a high price. For example:

·         Japanese children receive ¥437.93 from the Tooth Fairy. That’s about $4.22.

·         Ireland and Spain, a baby tooth is worth €3.64 or $4.41.

·         Canadian kids receive $5.36 Canadian or $4.38 American.

·         Brazilian parents get off lighter. A tooth there is valued at R$17.12 or $3.27.

Visits from the Tooth Fairy offer teachable moments – times when kids may be interested in learning about money. One way to get the discussion going is to ask recipients of the Tooth Fairy’s generosity how they plan to spend the money. Once you’ve listened to the answer, you may want to offer other ideas like saving or donating part of the money. If you would like more ideas, let us know.

Weekly Focus – Think About It 

“Inflation is when you pay fifteen dollars for the ten-dollar haircut you used to get for five dollars when you had hair.”
–Sam Ewing, Baseball player

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Investment advice offered through Research Financial Strategies, a registered investment advisor.
* This newsletter and commentary expressed should not be construed as investment advice.
* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.  However, the value of fund shares is not guaranteed and will fluctuate.
* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.
* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.
* All indexes referenced are unmanaged. The volatility of indexes could be materially different from that of a client’s portfolio. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. You cannot invest directly in an index.
* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.
* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
* Gold represents the afternoon gold price as reported by the London Bullion Market Association. The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce.
* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.
* The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.
* The Dow Jones Industrial Average (DJIA), commonly known as “The Dow,” is an index representing 30 stock of companies maintained and reviewed by the editors of The Wall Street Journal.
* The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system.
* International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.
* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.
* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
* Past performance does not guarantee future results. Investing involves risk, including loss of principal.
* The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee it is accurate or complete.
* There is no guarantee a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
* Asset allocation does not ensure a profit or protect against a loss.
* Consult your financial professional before making any investment decision.
* To unsubscribe from the Weekly Market Commentary please reply to this e-mail with “Unsubscribe” in the subject.

 

Investment advice offered through Research Financial Strategies, a registered investment advisor.

Sources:
https://coronavirus.jhu.edu/map.html (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2021/01-19-21_JohnsHopkinsUniversity-COVID-19_Dashboard_Map-Footnote_1.pdf)
https://www.barrons.com/articles/the-stock-market-fell-the-most-since-october-why-big-tech-is-part-of-the-problem-51610759892?refsec=the-trader (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2021/01-19-21_Barrons-Fear_Comes_to_the_Stock_Market-What_Comes_Next-Footnote_2.pdf)
https://www.bloomberg.com/news/articles/2021-01-14/u-s-stocks-hold-steady-afterhours-on-biden-aid-deal-proposal (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2021/01-19-21_Bloomberg-US_Stock_Futures_Decline_After_Bidens_Spending-Bill_Proposal-Footnote_3.pdf)
https://www.barrons.com/articles/as-u-s-fights-todays-problems-tomorrows-inflation-starts-to-stir-51610762538 (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2021/01-19-21_Barrons-As_US_Fights_Todays_Problems_Tomorrows_Inflation_Starts_to_Stir-Footnote_4.pdf)
https://www.marketwatch.com/story/consumer-inflation-climbs-0-4-in-december-on-higher-gas-prices-cpi-finds-11610545512
https://www.reuters.com/article/us-usa-fed/fed-sees-rising-bond-yields-inflation-expectations-as-a-possible-win-idUSKBN29C2ZH
https://am.dental-tribune.com/news/weighing-up-the-new-reality-dental-companies-count-cost-of-covid-19/
https://www.deltadental.com/us/en/tooth-fairy/press-release.html
https://www.deltadental.com/us/en/tooth-fairy/the-original-poll.html
https://www1.oanda.com/currency/converter/ (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2021/01-19-21_OANDA-Currency_Converter-Footnote_10.pdf)
https://www.goodreads.com/quotes/tag/inflation

Weekly Market Commentary 3/1/2021

Weekly Market Commentary 12/28/2020

How Are Your Investments Doing Lately?  Receive A Free, No-Obligation 2nd Opinion On Your Investment Portfolio >

Weekly Financial Market Commentary

December 28, 2020

Our Mission Is To Create And Preserve Client Wealth

U.S. stock markets remained calm as a fresh chapter opened in the coronavirus stimulus saga last week.

Congress managed to cobble together a new stimulus package that was acceptable to both sides and pass it. The proposed package included money to help states distribute vaccines, an unemployment benefits extension, $600 checks for eligible Americans, aid for airlines, and other provisions, reported Mike Calia of CNBC.

“…fiscal support is seen as critical to keep the economic recovery from faltering as coronavirus cases rise and cities consider new shutdowns. Consumer spending has flagged, and labor market gains have begun to stall. While the number of Americans applying for unemployment benefits declined last week, it still remains elevated compared with pre-COVID levels,” reported Colby Smith and Eric Platt of Financial Times.

President Trump disagreed with some provisions in the bill, reported Financial Times. Over the weekend, it was unclear whether he would sign it, veto it, or just hold it without taking action.

Since the $900 billion stimulus bill was attached to the $1.4 trillion government funding bill, the impact of a veto or inaction could be quite significant. “Without Trump’s signature, the government may partially shut down on Tuesday as funding runs out, though Congress could pass a stopgap measure,” reported Daren Fonda of Barron’s.

Stock investors appeared optimistic President Trump would sign the bill. News of a Brexit trade deal and a more contagious version of the virus in the United Kingdom had limited impact on U.S. markets.

All-in-all it was a quiet holiday week and major U.S. indices finished with mixed results. If the stimulus bill is not signed and a stopgap measure is not passed, markets could be volatile next week.

There will always be risks.
After a year of living with the fear of COVID-19, many investors are hoping 2021 will bring a return to ‘normal,’ even if the new normal may not be exactly like the old one.

Optimism about the future has many investors feeling bullish, according to most of the sentiment surveys listed in Barron’s last week. Financial Times reported, “Almost universally, fund managers believe the year will bring a rebound in economic activity, supporting assets that have already soared in value since the depths of the pandemic crisis in March, but also lifting sectors that had been left behind. Bond yields are expected to stay low, lending further support to stock valuations.”

This doesn’t mean 2021 will be risk free. In its December market sentiment survey, Deutsche Bank asked more than 900 market professionals about the biggest risks to global financial markets in 2021. Here are the concerns they highlighted:

38 percent       Virus mutates and vaccines are less effective
36 percent       Vaccine side effects emerge
34 percent       People refuse to take the vaccine
34 percent       Technology bubble bursts
26 percent       Central banks end stimulus too soon
22 percent       Inflation returns earlier than expected

It’s possible none of these will occur and investors will sail smoothly into and through the new year. We hope that’s the case and next year brings with it a return to normal. Just remember, normal doesn’t mean risk-free. In 2021, investors will still need to balance risk and reward on the journey toward their financial goals – just as they do every year.

Weekly Focus – Think About It
“Qualities you need to get through medical school and residency: Discipline. Patience. Perseverance. A willingness to forgo sleep. A penchant for sadomasochism. Ability to weather crises of faith and self-confidence. Accept exhaustion as fact of life. Addiction to caffeine a definite plus. Unfailing optimism that the end is in sight.
–Khaled Hosseini, Novelist

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Investment advice offered through Research Financial Strategies, a registered investment advisor.
* This newsletter and commentary expressed should not be construed as investment advice.
* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.  However, the value of fund shares is not guaranteed and will fluctuate.
* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.
* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.
* All indexes referenced are unmanaged. The volatility of indexes could be materially different from that of a client’s portfolio. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. You cannot invest directly in an index.
* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.
* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
* Gold represents the afternoon gold price as reported by the London Bullion Market Association. The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce.
* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.
* The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.
* The Dow Jones Industrial Average (DJIA), commonly known as “The Dow,” is an index representing 30 stock of companies maintained and reviewed by the editors of The Wall Street Journal.
* The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system.
* International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.
* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.
* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
* Past performance does not guarantee future results. Investing involves risk, including loss of principal.
* The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee it is accurate or complete.
* There is no guarantee a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
* Asset allocation does not ensure a profit or protect against a loss.
* Consult your financial professional before making any investment decision.
* To unsubscribe from the Weekly Market Commentary please reply to this e-mail with “Unsubscribe” in the subject.

 

Investment advice offered through Research Financial Strategies, a registered investment advisor.

 

Sources:
https://www.cnbc.com/2020/12/22/trump-calls-covid-relief-bill-unsuitable-and-demands-congress-add-higher-stimulus-payments.html
https://www.ft.com/content/b0f95a35-5aa6-4a9a-a0f6-ea509e27aca0 (or go to https://peakcontent.s3-us-west-2.amazonaws.com/+Peak+Commentary/12-28-20_FinancialTimes-Treasuries_Under_Pressure_as_Traders_Look_Past_Trump_Stimulus_Pushback-Footnote_2.pdf)
https://www.barrons.com/articles/stimulus-bills-fate-remains-in-limbo-the-stock-market-isnt-reacting-so-far-51609005727 (or go to https://peakcontent.s3-us-west-2.amazonaws.com/+Peak+Commentary/12-28-20_Barrons-Stimulus_Bills_Fate_Remains_in_Limbo-The_Stock_Market_Isnt_Reacting_So_Far-Footnote_3.pdf)
https://www.bbc.com/news/uk-politics-32810887
https://www.npr.org/sections/goatsandsoda/2020/12/22/948961575/what-we-know-about-the-new-u-k-variant-of-coronavirus-and-what-we-need-to-find-o
https://www.barrons.com/market-data?mod=BOL_TOPNAV (or go to https://peakcontent.s3-us-west-2.amazonaws.com/+Peak+Commentary/12-28-20_Barrons-Market_Data-Footnote_6.pdf)
https://www.barrons.com/market-data/market-lab (or go to https://peakcontent.s3-us-west-2.amazonaws.com/+Peak+Commentary/12-28-20_Barrons-Sentiment_Data-Footnote_7.pdf)
https://www.ft.com/content/1afc5e9f-f05d-48f5-a126-870ba70ce254 (or go to https://peakcontent.s3-us-west-2.amazonaws.com/+Peak+Commentary/12-28-20_FinancialTimes-What_Can_Go_Wrong-Investors_Views_on_the_Big_Risks_to_Markets_in_2021-Footnote_8.pdf)
https://twitter.com/DeutscheBank/status/1338539251407917056/photo/1
https://www.brainyquote.com/quotes/khaled_hosseini_793802

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