From an economic standpoint, reports continue to surprise to the upside. Last Friday's unemployment report showed nearly 100,000 more jobs being created than were expected and the unemployment rate dropping below 7%. This was far better than anticipated, especially considering that the employment participation rate moved back up.
In addition to this, both the service and manufacturing PMI reports showed the economy growing at a faster pace than was expected. In particular, the manufacturing side of the economy increased at the fastest pace in more than two years. The employment portion of the index was very constructive and the new orders component moved up the most since 2004. As these are leading economic indicators, this bodes well for continued progress. This is especially important given the increasing COVID cases, which when combined with the coming flu season, could lead to far more lock-downs or restrictions.
To that end, with today's announcement by a leading pharmaceutical company that their vaccine could be as much as 90% affective against the COVID-19 coronavirus, has sent markets significantly higher. It increases optimism that large parts of the economy could re-open and life could move back towards something that resembles normal by sometime next year. This would all be constructive towards jobs, corporate earnings and profits. We will continue to monitor this going forward.
The markets have moved up very quickly over the last week. We want to remind you, our trusted friends and clients, that markets do not move in straight lines, and that we would expect more volatility as we head towards year-end. We will use upticks in the market to continue to create cash for liquidity needs over the next 6-12 months or so. If you have questions about this, please reach out to your advisor.
The Investylitics team of Horizon Advisor Network appreciates your continued trust and support of our process. We will continue to diligently watch and monitor the markets and economy for any changes that may need to be made, as we continue moving toward a new year together.
Investments in securities do not offer a fix rate of return. Principal, yield and/or share price will fluctuate with changes in market conditions and, when sold or redeemed, you may receive more or less than originally invested. No system or financial planning strategy can guarantee future results.