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MONECO's Weekly Wealth of Knowledge - Week of 11/09/2020

November 10, 2020

The Weekly Wealth of Knowledge is your download of this week's most important topics related to financial planning, the markets, and our community. November is giving month at MONECO Advisors, so we will be including some pieces on how you can contribute to your community.

In this issue:

  • The Election Results (3 min read)
  • The Business Cycle (3 min read)
  • California Voters Approve Prop 22 (2 min read)
  • BONUS: Trends in Charitable Giving (3 min read)

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Financial Advisor Nick DeSousa introduced our content this week:

The Election Results

Former Vice President Joe Biden has been elected the 46th President of the United States, defeating President Donald Trump in a tight race and bringing an end to the highly contested 2020 election. The new president-elect benefited from high voter turnout and solid support among independent and suburban voters. At the same time, Trump kept the race close, which likely helped put Republicans in a strong position to keep narrow control of the Senate. With the presidential election behind us, we can continue battling COVID-19, healing our economy, and bridging our divides as a society.

President-elect Biden will inherit an economy that is improving nicely. Based on gross domestic product, the US economy grew by a record 33% annualized in the third quarter as the economy reopened (Bureau of Economic Analysis), likely bringing the US recession—one of the shortest ever—to an end.

The strength of the US consumer has been a key driver of this recovery, with retail sales already eclipsing their pre-pandemic highs. But it’s not just the consumer driving the rebound. Manufacturing activity has been on the upswing; investment in technology equipment has surged; most housing markets across the country are booming; company results during third quarter earnings season have been much better than expected; and S&P 500 Index earnings are expected to increase significantly in 2021—potentially by more than 20% (FactSet).

Meanwhile, COVID-19 remains a threat as cases and hospitalizations continue to rise. Although the numbers may go higher in the short run, cases are skewing younger and treatments have improved significantly, greatly improving patient outcomes. While widespread shutdowns are unlikely, renewed restrictions in Europe in response to its latest outbreak provide a reminder that this battle is not yet over. Safe and effective vaccines may be identified within the next month or two and become widely available sometime in mid- to late-2021.

Turning to policy, negotiating a stimulus package with Senate Republicans to help fortify the economic bridge to a COVID-19 vaccine likely will be among the first priorities after inauguration day, though a smaller package in the lame duck session of Congress may be possible. With Republicans potentially in control of the Senate, Biden then may turn to scaled-down versions of his key spending priorities—including renewable energy, infrastructure, and healthcare—as major tax increases may be off the table.

While political change may cause market volatility, US political and economic systems are resilient and can, after a period of adjustment, adapt to new realities. Most of our investment horizons extend far beyond this election and any political cycle. Now that the election is over, the focus continues to be on providing independent investment advice and helping you stick to your long-term investment strategies. The commitment to you will not change, regardless of who is in office.


The Business Cycle

The business cycle is an important concept to understand as an investor. So what is the business cycle, and how should investors look at information about the business cycle? Click here to read more.


California Voters Approve Prop 22

California's Proposition 22 allows rideshare apps like Uber and Lyft to label their drivers as independent contractors, instead of employees. Voters in California recently approved Prop 22, which is a major win for gig economy companies.

When drivers are made independent contractors, they lose access to employment benefits. This might sound bad at first, but it is appealing to voters because it means that ride prices remain low for customers. Click here to read more.


Trends in Charitable Giving

Charitable Giving

According to Giving USA 2020, Americans gave an estimated $449.64 billion to charity in 2019.

Americans give to charity for two main reasons: to support a cause or organization they care about or to leave a legacy through their support. Most people give to charity through cash donations, however, some understand that supporting an organization can generate tax benefits.

If you want to read more about charitable giving, click here!

2020 Virtual Turkey Drive

Help our firm toward the goal of alleviating hunger in Connecticut this Thanksgiving!

In keeping with the theme of giving for the month of November, we will be holding our Fifth Annual Turkey Drive in partnership with the Connecticut Food Bank. To donate, visit our virtual food drive page on CT Food Bank's website!

MONECO Advisors will match, dollar for dollar, every donation you make up to our goal. You contribution will help insure no family goes hungry this Thanksgiving in Connecticut!  As a point of reference, for every $10 donated to the Connecticut Food Bank, we can feed one individual for an entire week! Your generosity is so very much appreciated.


Important Information

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.

References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.

All data is provided as of November 5, 2020.

Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services. LPL Financial doesn’t provide research on individual equities.

All index data from FactSet.

This Research material was prepared by LPL Financial, LLC. All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.