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
Confirmed cases are likely to pass 100 million worldwide over the next week to ten days, while fatalities have now passed two-million. The U.S. remains responsible for ~25% of all cases, while the U.S., India, Brazil and Russia are responsible for roughly half of all COVID cases.
The Bad News
The vaccine rollout remains slow. That said – it is a marked improvement since last week, so we will view this as an improving bit of bad news:
Israel remains the beacon in terms of vaccines, while most other countries have been able to at least double their vaccine counts week over week.
The Good News
While the pace of vaccination has been slow, it is clearly ramping 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, there has been positive news on the JNJ vaccine front and we could be looking at a third vaccine coming to market by February. We would add that it appears that the JNJ vaccine will be a single dose (as opposed to two doses for the Pfizer and Moderna vaccines), so it could accelerate the number of people that are fully vaccinated very quickly.
Market & Political Update
The stock market had a mixed week following a strong first week to the year. With the Democrats surprise sweep of the Georgia Senate seats, the U.S. Senate now stands at 50/50 with VP-Elect Kamala Harris wielding the tie-breaking vote. In our view, this is not a bad outcome for stocks or the economy as there are several Democratic Senators (most notably Joe Manchin from deeply red West Virginia), who are likely to be resistant to big changes in tax policy. On the flip side, getting stimulus packages through the Senate (President-elect Biden unveiled his $1.9 TN American Rescue Plan yesterday) will certainly be easier than it would have been with a Republican majority in the Senate, so the market may get the best of both worlds at least for a while.
As we discussed in our year-end presentation back in mid-December, economic growth is off to an uneven start for 2021 as different degrees of shutdowns across Canada and the U.S. weigh on economic activity. We expect a much strong second half to the year as a combination of vaccine deployment, significant stimulus, pent-up demand and warmer weather lead to growth that is likely to be significantly above average.
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