March 2021 – 3 in 3
This month, Jason Weaver discusses sector outlooks, the Federal Reserve dot plot, and the return to normal.
Industrials, Materials & Consumer Discretionary: Benefactors of new stimulus to businesses, Vaccine deployments (Reopening) & Weakening dollar
Financials: Benefactors of rising rates, consumer confidence, & reopening
Energy: Benefactors of rising commodity prices, weak dollar, & reopening (more travel)
Technology: Benefactors of stimulus, trends technology adoption (cloud) & increased WFH, Negatively impacted by rising interest rates
Communications: Bifurcated sector between legacy (telecom) & newer media (GOOGL & FB)., Subsector is important
Health Care & Staples: Negatively impacted as investors will look to shift from “safety” to more risk exposure
Utilities & Real Estate: Negatively impacted by rising interest rates & investors shifting to more risk exposure
Federal Reserve Dot Plot
The dot plot is a chart that records each Fed official’s forecast for ST interest rates (currently between 0-0.25%).
Each dot represents one Fed official.
It is kept anonymous.
The purpose is to give investors an advance look at what officials are thinking about future rates.
Return to Normal
The “Return to Normal” Index measures human activity data relative to pre-pandemic levels.
It tracks travel, returning to work and school, brick-and-mortar shopping and eating out.
It is focused on measuring components of daily life rather than economic indicators like GDP growth
Upside: Faster vaccine distribution and uptake could accelerate the path to normal
Downside: emergence of variants that are resistant to current vaccines or slower uptake of the vaccine in certain places
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March 2021 – 3 in 3 Weaver Consulting Group is a local, family owned, Registered Investment Advisory practice in Huntington Beach, California. We have been providing our expertise and sharing our experiences for the last 22 years. It is our priority to act in the best interest of each person that we work with. Therefore, the experience you have with our firm is individually tailored. We strive to include all aspects of your personal and financial goals when consulting.