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Cycle Watch: February 2021 – Through the soft patch

February 11, 2021

The slowdown in the economic recovery extended into early 2021 as consumers and businesses struggled with record COVID cases and increased government restrictions. Service sector employment saw a renewed hit with significant job losses in the leisure and hospitality sector and rising weekly jobless claims.

From a financial market perspective, equity market volatility continued in January as choppy investor confidence and a wild conflict between retail investors and hedge funds wrestled against positive earnings surprises and encouraging COVID-19 data. January was fractionally negative for the S&P 500® Index for the second consecutive year, though markets remain near record-highs.

We expect the current soft patch is nearly finished, with the expansion likely to accelerate as COVID-19 vaccines are more widely distributed, potentially as soon as Q2. Read more in this month’s Cycle Watch.


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