Investment Review - January 2020
- In stark contrast to the December decline one year ago, the S&P 500 returned 3.02% for the month, closing 2019’s total return up 31.49%.
- Consumer spending was robust during the Holiday season. MasterCard Spending Pulse, which tracks consumer-spending tendencies, saw an increase of 3.4% from Nov. 1 through Dec. 24th. This is an impressive pickup, as 2018 saw the best growth in purchases over six years prior.
- The past decade has seen tremendous prosperity, in particular for U.S. investors. Valuations were depressed to begin the decade given the credit crisis of 2008, which provided a low bar to hurdle. Corporate profitability has improved vastly, mainly through deflationary cost improvements such as technological advances across industries and globalization of supply chain and labor forces, driving earnings higher. In addition, innovation, low interest rates, and a strong consumer has buoyed sales. The combination of increased sales and higher profit provided the backdrop for a historic decade, and provides the resilience we continue to see in this market environment.
Sources: Bloomberg LLC, FactSet, U.S. Department of Labor, U.S. Commerce Department, Bureau of Labor Statistics, Federal Reserve Bank, Empirical Research Partners
Disclosure: This commentary reflects the opinions of Welch & Forbes based on information that we believe to be reliable. It is intended for informational purposes only, and not to suggest any specific performance or results, nor should it be considered investment, financial, tax or other professional advice. It is not an offer or solicitation.
If you would like to receive your copy of the Economic Outlook and Investment Review monthly in the mail, call Ed Sullivan, Vice President, at 617-557-9800, or email him at esullivan@welchforbes.com.