U.S. Equity Markets Hit All-Time Highs Just 12 Months After Covid Onset: Market Commentary from Cabana’s CEO – April 5, 2021

2 years ago

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U.S. equity markets had a big week, perhaps in response to the prospect of a large infrastructure package out of Washington D.C., coupled with job growth and blowout consumer confidence numbers. The S&P 500 was up more than 2% last week and was up big again today. The economy appears to be on the brink of historically explosive growth as Covid-19 may fall to the wayside and our country gets back to work and play.

It was reported by some over the weekend that expectations are for 2021 to be the most vibrant economy since 1983. It is amazing to think back to where we were exactly one year ago. No one could have imagined that equity markets would be at all-time highs only 12 months after the collapse we saw in March 2020. We have discussed the absolute resilience of the United States and of human beings in general on many occasions over the past few years, but the hole we dug ourselves out of in 2020 will be talked about and studied for generations. Words do not suffice or do justice to what we have accomplished in the face of a real threat to our way of life – not just in our financial system. What we achieved is much bigger than that.

Bond yields have moderated after the rapid rise in rates we saw over the past nine months. Even after the past two weeks’ positive economic news, the all-important 10-Year treasury remains below 1.75%. As is typically the case, the bond market saw it all first. While we suspect rates will continue to rise as the economy expands, we believe the huge moves are likely behind us and we can expect to settle into a more normal relationship between growth/inflation and interest rates. To those investors who have endured the negative impacts that rising rates had on bonds, income producing and other “conservative” assets, it appears that the worst may be over… for the time being.

Before we move on with our week, I want to take a minute to recognize all the people that we lost in the past year. Not only those lost to Covid directly, but those who died without their families by their side. My dad died on April 18, 2020. He was in the ICU for eight days after a heart attack. I only got to be with him for the last two. He was alone the rest of the time. I won’t ever get over that, and I am just one of many thousands who experienced the same thing. Let us all never forget. I don’t mean to be overly religious, but Easter had a special meaning for me this year.


June 22, 2022

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