2020 Year-End Review & Outlook

January 22, 2021
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2020 Year-End Review & Outlook


■ Market Review


Equities


[The pandemic] put the U.S. economy and markets on the biggest bust-to-boom roller coaster we’ve seen.
— Jim Paulsen, Chief Investment Strategist for the Leuthold Group
U.S. stocks amazingly had a record-setting year after a bout of unprecedented destructive events only a clairvoyant would have predicted. It started with a global pandemic caused by a novel virus, a severe recession and high unemployment resulting from
lockdowns, social unrest, numerous fires and hurricanes, and finally was capped off with a very contentious presidential election.
Worries about the rapidly spreading coronavirus in the first part of 2020 sent all types of securities tumbling —including stocks,
commodities, real estate, and even bonds—triggering panic in markets worldwide. Then in moves not seen since the Great Recession, major central banks and governments in a coordinated effort promptly implemented massive stimulus packages, low borrowing rates, and market backstops to stem the deluge. Equity investors responded enthusiastically to the policies, sparking a
second quarter rally. Then, news of an improving economy, effective Covid vaccines, and a controversial but eventual winner of the divisive presidential election, stoked a swelling enthusiasm for stocks.

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