Reasons for Optimism about the Economy in 2021

Chris Pelley, Managing Director at Pelley Group

IBC member Christopher Pelley of the Pelley Group, located in the Denver metropolitan area, has decades of experience in the financial services industry. On January 28, Chris shared his economic research from RBC City National Bank and thoughts about how the economy, both US and globally, looks to perform in 2021. We sat down (virtually) with Chris to expand on some of the points he made during his talk with IBC members.

Question: Since you began your IBC MEF Monthly Economic Forecast presentation by talking about Covid-19 vaccines being rolled out, what kind of economic impact do you think we will see as a result?

Chris Pelley: “Well, getting people vaccinated will do wonders toward helping more aspects of the economy to reopen. This means more people back to work, which means those people will have more buying power. Obviously, many developing countries will have more trouble with economic recovery, as their ability to get vaccines is greatly hindered, at this point in time, especially in places like South America and Africa, which are being crushed by the pandemic. But as vaccine production is ramped up, the hope is that those areas will catch up and recover, albeit much more slowly.”

Question: How are the US stimulus measures affecting US firms who do business overseas?

CP: “To some degree, the stimulus gives American companies a hand up from our government, though it is a bit of a ‘band-aid effect.’ Our advantage is primarily in technology but also in farming and energy. Right now, fiscal and monetary stimulus, which is needed, should be enough to propel the stock market for the next year or two. That said, we should also see a more durable recovery and rebound happening worldwide. It looks more positive around the globe. It’s also time to improve our business relations with China and all emerging economies. China is still our number one trading partner and is just as reliant on us as we are on them. As far as policy goes, it would greatly benefit the US to collaborate closer with our allies in the UK, India and the British Commonwealth to become more competitive with China.”

Question: What positive outcomes, economic or otherwise, do you see from the different aspects of the crisis caused by the pandemic?

CP: “I believe this has been a wake-up call for this country, our people to work together, despite the gridlock in Washington. If you look at places like China, Taiwan, and Japan, there’s more of a sense of community welfare in how they responded to Covid-19. We managed to avoid a serious recession and unemployment, which is definitely a good outcome. Inflation is now expected, but not in the near-term, and interest rates remain extremely low. Therefore, the right real estate should be a good investment for the next few years. And Big Tech is very strong, but, thank goodness, not yet as risky as the tech bubble of ’99. The white-collar job market is definitely improving, and, hopefully, blue collar job markets will improve with the increased availability of vaccines. Now may not be a bad time to switch gears for some folks who’ve been out of work and maybe go to community college and learn new skills, such as becoming a mechanic and other essential professions that don’t necessarily require a four-year or higher education.”

Question: Is there anything else you’d like to add that we haven’t already covered?

CP: “I’d like to just reiterate that America needs to find different ways for all of us to communicate, respect and understand one another so that we can find common ground. I think the outlook for all of us is positive, but even more so if we pull together. I’d like to stress the gratitude principal as we are the most fortunate people in the world and yet seen only focusing on the shortcomings of America.  If your readers would consider sharing our MEF with business leaders it will help them to make better decisions about their company, career and capital.

Chris Pelley is the founder and Managing Director of the Pelley Group, which provides clients with comprehensive financial guidance and planning. Chris has over thirty years of experience in financial services. He and his wife and their golden retrievers live in Greenwood Village, Colorado, and their two grown daughters live and work overseas.