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.