As 2020 winds down, I am glad to leave this year behind us! In 2021, I look forward to going back to the movies, visiting museums in DC, and taking camping trips with our Boy Scout Troop. Whatever your hopes for the future are, I am sure you are as excited as I am.

There are just a few trading days left and the financial markets have had a great year: The S&P 500 index is up ~15%, the NASDAQ Composite almost 40%, the small-cap Russell 2000 index  near 16%, gold is up 20%, and bonds almost 7%. International markets have also fared well, the MSCI EAFE index is up ~5% and the MSCI Emerging Markets index ~15%.

With all of the good news reflected in financial assets, there is still much needed help in many areas of our economy and society. Lines at food banks are still long and small businesses in our community continue to need our help.

Global markets are reflecting a high level of earnings and economic optimism and investors have rewarded those companies that have benefited from the stay-at-home trends. Yet, the biggest surprise may be a synchronized recovery not just in the U.S. but in the rest of the world. It is human nature to want to enjoy a meal with friends and family, visit a foreign destination or experience all the natural wonders our country has to offer.

The outlook for 2021 is very exciting and the team has been debating what opportunities and risks the new year will bring. Will the dollar continue to weaken and what does it mean for emerging markets? Do non-U.S. stock valuations offer more opportunities? Is inflation a real threat to fixed income or a transient scare given the structural employment challenges we face? Is the rise of crypto-currencies similar to the tech bubble or the start of a new asset class? We look forward to sharing with all of you some of these answers during a meeting, video, or future webinar.

As a follow-up to my previous market commentary, “Rear-View Mirror”, I want to highlight another column written by a long-time friend, Robert Aguirre. His guest column can be found at BanderaBulletin.com. I encourage you to read it. I found wisdom, strength and peace in his words.

Finally, at this time of year, I like to take a few days off to reflect on what our team and I have done right, what we can do better, and set goals for the next year. 2020 was a trying year in many regards, but very rewarding at the same time. Thank you to Rodrigo and Will for all your help this year.

On behalf of all us at Sendero, we wish you and your family a happy and safe New Year. Merry Christmas and Happy Holidays!

If you have any questions or want to have a conversation about the market or your portfolio, please contact Liz, Ed, Fred, Scott, Tyler, or myself. Your Sendero team is ready to help. 

Best Regards,
Amaury de Barros Conti
Vice President, Research & Strategy
210-930-9409
aconti@sendero.com