We will be honest, we had hoped when this all started not to be doing COVID updates in 2021, but we will continue to do so until the crisis is behind us.
2021 TFSA
You can now contribute $6,000 to your TFSA for 2021. There is no deadline to contribute to your TFSA, but you may wish to contribute early to start earning tax free growth. Cheques can be mailed to our office made payable to RBC Dominion Securities or if you wish to transfer the money electronically, please contact Ann-Marie for details.
COVID-19 Update
The news has been generally grim with case counts and hospitalizations spiking in most regions. Globally, there have now been more than 88 million cases of COVID-19 with ~23 million of these cases considered active, while new case counts are running at between 800k and 900k/day. A new more virulent strain referred to as the “British Mutation” has taken hold in most regions, which has exacerbated the spike in cases.
The Bad News
In addition to the case count numbers, the pace of vaccinations has been slower than expected for most regions with one notable exception:
Israel, because of its smaller population, small geographic footprint and expertise at logistics has already vaccinated nearly 20% of its population, including more than 60% of the high-risk population. In fact, the country expects to be fully vaccinated by April. By contrast, most of the rest of the world has vaccinated fewer than 2% of its population so far with Canada currently at well below 1%. To put it in perspective, Canada has roughly 4x the population of Israel, but has administered ~1/7th the number of vaccines so far.
The Good News
While the pace of vaccination has been slow, there are signs that it is beginning to ramp up. In addition, both Pfizer and Moderna have indicated that large doses of supply are coming over the next four to six weeks, so if countries are able to resolve some of the logistical challenges, there looks to be ample supply to get vaccinations into arms.
Further, while the British Mutation is worrisome, we were recently part of a discussion with analysts at Goldman Sachs. They conveyed that a study done at the University of Texas Medical Branch (UTMB) of the serum/blood of 20 individuals who had received Pfizer’s COVID vaccine indicated full neutralization of the British Mutation (as well as neutralization of the virus without the mutation) as well as the less prevalent South African Mutation. While more studies need to be done, it appears that new strains will not require new vaccinations.
Market & Political Update
We will not spend much time on the events of this week in Washington D.C. as they sadly speak for themselves. While we do not agree with all the policies of the incoming Biden Administration both foreign and domestic, we are very hopeful that the shift in tone that will take place on January 20th will be an important first step in healing the fractures in the U.S.; although, the deep wounds will not be repaired overnight.
Many were surprised by the muted reaction the stock market had to the events with the Dow Jones closing higher for the day and the week. While stocks will often zig when one thinks they are going to zag, we will admit that we were even surprised when the day ended up in the green. It speaks to how things such as the outlook for the economy (uneven in the near-term and strong in the long-term) and accommodative monetary policy matter much more than the day to day news events, no matter how dire they appear.
Final Thoughts
We remain very optimistic about the outlook for 2021, despite the “uneven” beginning. Our offices are currently closed; although, we are able to go in once a week to process mail and send out whatever information you may need that is not available electronically. If there is anything you need, Ann-Marie and I remain available at most times, so please send us an email or give us a call if any issues come up.
Best,
Matt & Ann-Marie