February 2021 Financial Markets Summary
The Super Bowl weekend is here! Tom Brady’s Tampa Bay Buccaneers will square off against Patrick Mahomes and the Kansas City Chiefs. The parties may look much different this year as the nation battles COVID-19, but we will continue to see significant spending and speculation just like we have experienced in our markets lately.
The Super Bowl viewers are estimated to spend $13.9 billion this year, or about $75 per person for the most watched televised event of the year. According to the National Retail Foundation (NRF), this is down about 15.9% from last year due to most viewers watching from home. The bulk of the spending is expected to be on beverages and the “healthy” Super Bowl food like chicken wings. In addition, the television commercials are fully booked, with an average $5.5 million price tag per 30-second spot ($183,333 per second).
Consumer spending took a massive hit last spring from COVID, but the most recent data suggests that spending has completely recovered. Americans spent 4% more in the 4th quarter of 2020 compared to the 4th quarter of 2019 according to Census Bureau data. Government spending is also at record highs due to the stimulus packages.
This is a big weekend for the gambling industry as many people speculate and wager on the game, the coin toss, the time of the National Anthem and the first team to score, to name a few. Some of these prop bets and the amount of money wagered seem ridiculous; similar to recent market activity.
This caused the GME price to skyrocket by over 2,300% in just a matter of weeks. However, just as quickly as the school came in, the big money left causing the price to drop by over 85% from the peak.
We will continue to experience volatility as markets grapple with the spread of COVID, the vaccine distribution and the new administration. We encourage investors to maintain a long-term perspective and not get caught up in the moment and make an emotional decision with their portfolios. We remind clients to maintain a diversified allocation and to keep their next 7-10 years of income needs from their portfolio in stable assets such as cash, CDs and short-term bonds.
| Asset Index Category |
Category |
Category |
5-Year |
10-Year |
|
3-Months |
1-Year |
Average |
Average |
|
| S&P 500 Index – Large Companies |
13.6% |
15.1% |
13.9% |
11.2% |
| S&P 400 Index – Mid-Size Companies |
23.1% |
16.6% |
12.2% |
9.7% |
| Russell 2000 Index – Small Companies |
34.8% |
28.4% |
14.9% |
10.2% |
| MSCI ACWI – Global (U.S. & Intl. Stocks) |
18.1% |
17.7% |
13.6% |
8.9% |
| MSCI EAFE Index – Developed Intl. |
19.5% |
8.9% |
8.8% |
5.1% |
| MSCI EM Index – Emerging Markets |
20.9% |
27.9% |
15.0% |
4.2% |
| Short-Term Corporate Bonds |
1.1% |
3.3% |
2.8% |
2.1% |
| Multi-Sector Bonds |
0.4% |
4.7% |
4.0% |
3.8% |
| International Government Bonds |
1.8% |
5.4% |
4.0% |
0.9% |
| Bloomberg Commodity Index |
11.5% |
7.3% |
1.9% |
-6.4% |
| Dow Jones U.S. Real Estate |
10.6% |
-6.9% |
7.5% |
8.3% |
Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment, strategy, or product or any non-investment related content, made reference to directly or indirectly in this newsletter, will be suitable for your individual situation, or prove successful. This material is distributed by PDS Planning, Inc. and is for information purposes only. Although information has been obtained from and is based upon sources PDS Planning believes to be reliable, we do not guarantee its accuracy. It is provided with the understanding that no fiduciary relationship exists because of this report. Opinions expressed in this report are not necessarily the opinions of PDS Planning and are subject to change without notice. PDS Planning assumes no liability for the interpretation or use of this report. Consultation with a qualified investment advisor is recommended prior to executing any investment strategy. No portion of this publication should be construed as legal or accounting advice. If you are a client of PDS Planning, please remember to contact PDS Planning, Inc., in writing, if there are any changes in your personal/financial situation or investment objectives. All rights reserved.