Weekly Market Commentary February 22nd, 2021

The Markets

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 delivered a contrarian’s dream. Their 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.


• 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 coming out of 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, the Dow Jones Industrial Average advanced, but the S&P 500, Nasdaq Composite, and the S&P/TSX Composite all finished the week lower.

Source: Refinitiv

Announcements and Reminders

March 4th at 11:00 AM - Click Here To Register

March 8th at 7:00 PM - Click Here To Register

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

Best regards,

P.S. Please feel free to forward this commentary to family, friends, or colleagues. If you would like us to add them to the list, please reply to this email with their email address and we will ask for their permission to be added.