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January 25th, 2021

Stocks Surge to New Highs, Brexit Goes Live, China’s Incomplete Recovery

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In today’s Steady Investor, we take a look at key factors that we believe are currently impacting the market, such as:

U.S. Stocks Power to New Highs – The S&P 500 index reached – and hovered around – all-time highs this week, boosted in part by strong earnings reports from Netflix and investment banking giant Goldman Sachs. Netflix crossed 200 million subscribers for the first time in the company’s history, powering a strong rally in shares and also lifting fellow tech giants like Apple, Alphabet, and Facebook. Goldman Sachs widely outperformed the street’s earnings expectations, which sets the stage for a strong 2021. Any concerns regarding civil unrest in Washington D.C. and State Capitols were put to rest yesterday, and the relatively quiet day may have helped provide support to U.S. equities. Biden’s inauguration also starts the clock on the potential for yet another fiscal stimulus package, which investors may already be pricing-into stocks. In a confirmation hearing before the U.S. Senate this week, U.S. Treasury Secretary nominee Janet Yellen made the argument for more deficit spending needed to push the economic recovery forward, underscoring the Biden Administration’s priority of providing additional aid to struggling families and businesses.1

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See How You Can Protect Your Retirement Against Life’s Unknowns

Looking ahead, there are many uncertainties surrounding the market. One question many investors may be wondering is how they can protect their retirement assets against these unknowns.

In times like these, it is important to have a strategy in place to account for the market’s ups and downs. Our free guide, How Solid Is Your Retirement Strategy?, can help you build a retirement strategy that takes the “what ifs” into account

This guide offers our views on some key retirement investment strategies that may help you preserve your financial security in retirement, including:

If you have $500,000 or more to invest, get our free guide by clicking on the link below.

Get our FREE guide: How Solid Is Your Retirement Strategy?2

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Brexit in Action – The past few weeks marked the first time in nearly 50 years when goods passing between the European Union and Britain needed to pass through customs checks. With Brexit official, trade must now filter through two sets of standards and regulations – the U.K.’s and the E.U.’s. For many large businesses with resources to navigate the complex rules and regulations, moving goods across borders and through ports has been relatively easy. For small businesses with fewer resources and human capital, however, the process has been much more difficult. It’s early days in one of the busiest trade routes in the world, and initial results are mixed, but this relationship will be one to watch throughout 2021.3

China’s Economic Recovery Lacks a Key Ingredient – Because Covid-19 originated in China and the country implemented draconian measures to thwart the spread, the economy was able to restart ahead of the rest of the world. For 2020, China’s economy managed to grow 2.3% (according to China statistics), which is the slowest growth rate in nearly 50 years but still represents the only major economy to grow last year. Even though China managed to eke out growth in 2020, many analysts rightly point out that the rebound has been uneven. China has relied heavily on exports of manufactured goods, and its fiscal and monetary stimulus focused on restarting factories and supporting businesses. Missing from this economic rebound: robust consumer spending and retail sales. Domestic spending remained weak, and retail sales fell 3.9% last year.4 China’s government did not focus any part of stimulus on the consumer – as the U.S. and other developed countries did – and employers there tended to cut hours, putting pressure on consumer sentiment and driving savings higher. China also has a productivity problem, according to the International Monetary Fund: by measure of average productivity across sectors, China’s economy is only 30% as productive as the world’s most productive economies, like the U.S., Japan, or Germany.

While the market is at a new high, there is no way to predict where it will be in just a few weeks’ time, especially with so many unknowns surrounding the market and economy. To help you prepare your retirement for the market’s uncertainties, we recommend finding a retirement strategy that takes these “what ifs” into account. Our free guide can help you to prepare for what’s to come as you look to 2021!

If you have $500,000 or more to invest, get our free guide, How Solid Is Your Retirement Strategy.5 You’ll get valuable and practical ideas to help build a “weatherproof” retirement strategy that can potentially protect your retirement nest egg from any storm that could threaten your financial security.

Disclosure

1 Wall Street Journal. January 20, 2021. https://www.wsj.com/articles/global-stock-markets-dow-update-11611132108

2 ZIM may amend or rescind the guide “How Solid Is Your Retirement Strategy?” for any reason and at ZIM’s discretion.

3 Wall Street Journal. January 21, 2021. https://www.wsj.com/articles/post-brexit-rules-problematic-for-some-smooth-sailing-for-others-11611225001

4 Wall Street Journal. January 19, 2021. https://www.wsj.com/articles/chinas-consumers-fall-behind-even-as-its-economy-marches-forward-11611067958

5 ZIM may amend or rescind the guide “How Solid Is Your Retirement Strategy?” for any reason and at ZIM’s discretion.

DISCLOSURE

Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.

Zacks Investment Management, Inc. is a wholly-owned subsidiary of Zacks Investment Research. Zacks Investment Management is an independent Registered Investment Advisory firm and acts as an investment manager for individuals and institutions. Zacks Investment Research is a provider of earnings data and other financial data to institutions and to individuals.

This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. Do not act or rely upon the information and advice given in this publication without seeking the services of competent and professional legal, tax, or accounting counsel. Publication and distribution of this article is not intended to create, and the information contained herein does not constitute, an attorney-client relationship. No recommendation or advice is being given as to whether any investment or strategy is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole.

Any projections, targets, or estimates in this report are forward looking statements and are based on the firm’s research, analysis, and assumptions. Due to rapidly changing market conditions and the complexity of investment decisions, supplemental information and other sources may be required to make informed investment decisions based on your individual investment objectives and suitability specifications. All expressions of opinions are subject to change without notice. Clients should seek financial advice regarding the appropriateness of investing in any security or investment strategy discussed in this presentation.

Certain economic and market information contained herein has been obtained from published sources prepared by other parties. Zacks Investment Management does not assume any responsibility for the accuracy or completeness of such information. Further, no third party has assumed responsibility for independently verifying the information contained herein and accordingly no such persons make any representations with respect to the accuracy, completeness or reasonableness of the information provided herein. Unless otherwise indicated, market analysis and conclusions are based upon opinions or assumptions that Zacks Investment Management considers to be reasonable.

The S&P 500 Index is a well-known, unmanaged index of the prices of 500 large-company common stocks, mainly blue-chip stocks, selected by Standard & Poor’s. The S&P 500 Index assumes reinvestment of dividends but does not reflect advisory fees. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor. An investor cannot invest directly in an index.

Questions posed are for demonstrative and informational purposes only and may not reflect the views of current clients or any one individual.

Any investment inherently involves a high degree of risk, beyond any specific risks discussed herein..
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