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Insights & Manager Commentary

Churchill Management - Commentary

by Craig Love, on February 11, 2021

The market’s relentless march upward has continued into the new year. Despite difficult economic circumstances, stocks continue to be in demand.

While the market has gotten expensive in terms of P/E ratios, it has always had pleasant surprises from corporate earnings. Earnings for Q4 of 2020 are now expected to come in around a positive 2%.

Stimulus, Stimulus, Stimulus: The stock market’s incredible V-shaped recovery since the March 2020 lows can largely be attributed to the Fed’s actions during the pandemic.

In the recent Fed meeting on January 26-27, Jerome Powell reiterated that monetary policy will continue to be very stimulative for the foreseeable future, with no plans of tightening on the horizon.

With Yellen leading the Treasury, the assumption is that the Fed and the Treasury will certainly be working closely together due to their ties back at the Fed.

The outlook is for continued stimulative actions from both the Fed and the Treasury. That should continue to give asset markets the liquidity needed to go farther and last longer than one would normally assume.

For now, the action is clearly positive and we will continue to participate. As always, we will be keeping a close eye on our indicators and remain prepared to change our stance when the time comes.



Source: Churchill Management Group 

** This report is meant to inform the reader of our current market opinion, which we, as professional money managers, use in our decision-making. It should be noted that stock market and bond market data are subject to varying interpretations and any one interpretation will not necessarily guarantee investment success. The information obtained from the sources specified herein and used as basis for our current market opinion is believed reliable, but we do not guarantee the accuracy of such information.

Topics:Manager Commentary