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3 Keys to the Week - January 22, 2021

Updated: Feb 25, 2021

A week that was shortened, as we paused to celebrate the life and legacy of Dr. Martin Luther King Jr., was still quite an eventful one. A Presidential Inauguration, the beginning of Q1 Earnings season, and some encouraging housing numbers kept the markets busy.

1.) Inauguration Day – Joe Biden officially became the 46th President of the United States, as he was sworn into office on Wednesday. History was also made, as Sen. Kamala Harris became the first female Vice President in U.S. history. President Biden wasted no time, signing several executive orders on Inauguration day. Some of those orders included revoking a permit for the Keystone XL oil pipeline, implementing a national mask mandate on Federal Property, and reversing a travel ban from several Muslim and African countries.

2.) Earnings Season Begins – Financial institutions were the first to report earnings from Q4 earlier this week, and results were mixed. Banks who focus on “Wall Street”, meaning those who generate a large amount of revenue from trading and investment banking, thrived. Goldman Sachs and Morgan Stanley both reported excellent numbers. However, banks who focus more on “Main Street”, meaning those who rely on consumer-lending, did not fare nearly as well. Banks such as Wells Fargo and Bank of America both saw increased deposits, but slower profit growth. As rates remain low, and corporations and individuals remain hesitant to take on additional debt, the “Wall Street” banks should continue to have greater success than many of the “Main Street” banks.

3.) Encouraging Housing Numbers –It was reported that new housing starts grew by 5.8% in December, the largest increase since 2006. New housing starts are an important economic indicator because it is a forward-looking metric that indicates optimism from home builders. Historically low mortgage rates and first-time Millennial homebuyers have more than offset concerns related to rising material costs. New housing starts are also important because new home supply is one of the best ways to keep home price appreciation from increasing too rapidly.



Investment advice offered through Strauss Financial Group, Inc., a Registered Investment Advisor.

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Investment advice offered through Strauss Financial Group, Inc., a Registered Investment Advisor.

Data sources: News items are based on reports from multiple commonly available international news sources (i.e., wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. Market data: Based on data reported in WSJ Market Data Center (indexes); U.S. Treasury (Treasury yields); U.S. Energy Information Administration/ Market Data (oil spot price, WTI Cushing, OK); (spot gold/silver); Oanda/FX Street (currency exchange rates).

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