US & International Markets: BABC Member Moss Adams Shares 2020 in Review and Outlook for 2021

In 2020, global equity markets staged an extraordinary recovery from their March lows after COVID-19 nearly halted all economic activity and created the most uncertain environment since the Great Depression. Now, the path toward economic normalcy is underway as massive global monetary and fiscal responses, initiated quickly at the onset of the pandemic, provide needed liquidity and economic stability.

Economic conditions and corporate profit growth have steadily improved since the initial lockdowns of 2020, though both remain below normal levels. Even still, stock prices have surged higher—initially led by the tech sector and other stocks that benefited from the stay-at-home trend, and more recently by a broadening of the rally to more cyclical areas as investors received positive news about the rollout of COVID-19 vaccines.

The conclusion of the US elections also created more certainty around future policy initiatives and allowed for a bi-partisan agreement for further fiscal support to be reached. The additional COVID-19 stimulus package, as well as anticipation of future infrastructure spending, also contributed to the outperformance of the more cyclical areas of the market at year-end.