March 29, 2021
February macroeconomic data points such as retail sales, industrial production, and housing starts were broadly disappointing due to the severe weather storms that hit Texas and the heartland. These readings, however, should be transitory as we are expecting a significant post-winter storm bounce back in the March data. The consumer spending backdrop remains robust, bolstered by household savings, additional stimulus checks, vaccines, surging home values, and stock market prices at or near record highs. Similarly, Corporate America is sitting on high levels of cash, and with improving profits, the likelihood of rising industrial capacity utilization, and a potential $3 trillion infrastructure package, we expect the outlook for capital investment will greatly improve. A highly accommodative Federal Reserve and rising corporate profits continues to support a constructive outlook for the stock market, and especially for our investors as the market continues to rotate away from excessively valued momentum stocks towards higher quality issues that are more reasonably priced.