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Key Points:

  • Vaccines Spur Growth Rebound
  • U.S. Profits Recover to Pre-Pandemic Levels
  • High U.S. Savings to Fuel Growth
  • Stronger Dollar Favors Domestic Tilt
  • Valuations, Rates, and Taxes are Risks

Much has changed in the past quarter. A new administration and new congressional leadership has emerged in Washington. Meanwhile, a COVID-19 vaccination rollout is accelerating throughout the United States and some other parts of the world. Speculative fervor has rippled through some parts of equity markets while bond investors fret about rising interest rates. This quarter we address how these changes are shaping the environment, creating challenges and opportunities for tactical investing along the way.