February 2021 Market Commentary: Lower Covid Numbers and Pent Up Consumer Demand

FEBRUARY 2021 MARKET COMMENTARY

DERWOOD S. CHASE, JR
FOUNDER AND CHAIRMAN EMERITUS

Every negative January (Stock Trader’s Almanac) since 1950 has been followed by at least a 10% correction or a flat year. February has historically been a weak month, but after an unusually strong first six weeks the S&P 500 needs to decline another 4½% just to reach the average February low since 1949 for a February when the incumbent party president loses.

With cases, hospitalizations, and deaths on the decline, a third Covid (easier to distribute) vaccine available this week, the high level of pent-up consumer demand with substantial accumulated savings and the lowest level of consumer debt carrying charges to disposable income since post World War II, we anticipate a strengthening economy at least through 2021.

Additional weakness could provide attractive buying opportunities especially in Artificial Intelligence (AI) sectors as well as Information and Communication Services (5G), Payment Processing, and Health Services.

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