In this week’s market update, we will review our liquidity indicators across the U.S. and China to measure the degree of monetary policy support for asset prices in 2021 and what it means for client portfolios. We will also compare the current stock market environment to that of 2000 and ask whether the two time periods are similar or different. Lastly, we will review the health of the credit markets, along with a quick discussion of where we see risk within the stock market.
The events of the past week in D.C., while abhorrent, remind us that asset prices and their long-term direction are influenced by factors such as innovation, disruption, and growth, NOT POLITICS. As we move forward, we expect that the rising supply of cheap money, low inflation, and a 2021 earnings recovery will be supportive of stock prices over the next 12 months. As a result, we remain positioned in companies dominating innovation and disruption, such as cloud computing, genomics, and leading brands amongst millennials and generation Z.
Robert Reaburn is the Executive Vice President and Head of Wealth Management at LifePro Asset Management.