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BCM 1Q21 Market Commentary: A Fundamentally Different Market Environment
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The Pricing Divergence in Manufacturing, the Red-Hot Housing Sector, and Extremes from Equity Valuations & Margin Debt
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By: BCM Investment Team
February’s retail sales losses were more severe than expected with sectors following a familiar pattern but have still managed to grow year-over-year. Manufacturing also felt the effects of last month’s freezing temperatures and underperformed expectations by over 3%. Housing prices meanwhile continue to soar in a trend that looks primed to continue as supply runs worryingly short. A $1,400 stimulus check may not make much of a dent in a down payment, but is it doing much good in a savings account? The 10-year UST yield hit a fresh 13-month high ahead of the Fed decision which Bank of America called “one of the most critical events for the Fed in some time” this week, inching closer to the 2% yield many fund managers believe could spark a 10%+ correction in equities. And what lies ahead on the international stage as commodities, EM exports, and new waves of Covid all climb higher?
By The BCM Investment Team
Much will be written about the challenges, difficulties, pain and suffering endured by humanity in 2020. We would like to focus on some of the good that came out of last year’s strife:
Our Democracy, while far from perfect, works. While many did not see their preferred candidates win, as always, this is part of Democracy, and Democracy is still the best system of government humans have yet devised.
Our society, while far from perfect and through too much tragedy, edged a bit closer to embracing equality in all that the word means. Now we all need to go forth in peace to finally make the words of our founding fathers our creed, our bond…and everyone’s reality.
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