News & Insights

Navigating the Market and the Economic Disconnect 
Alan Adelman, Senior Fund Manager and Senior Research Analyst

The market can often feel disconnected to what’s happening in the economy – especially recently due to relief from the Federal Reserve and the fiscal policy Congress passed providing extraordinary stimulus. This, coupled with the vaccination effort, has resulted in a quick climb of the stock market while the economy recovers. While it often might feel disjointed, the markets often follow what investors think will happen in the future, not necessarily the present. 

Areas of Opportunity Following a Surge in Consumer Savings
The latest stimulus package in March put a third wave of extra money in consumers’ pockets, including their saving accounts. According to Bloomberg Economics, Americans have an estimated 4 trillion in savings, and 1-2 trillion of that is excess. Consumer debt levels haven’t been this low since the 1980s. With pent up savings, Frost sees areas of opportunity in the market: 

• Theme parks – pent up demand for travel plus increasing access to vaccines makes theme parks well-positioned for cash flow generation
• Health care – as COVID-19 hospitalizations stabilize, elective surgeries could begin to pickup
• Staffing and temp agencies – employers added more jobs in February than January, and while it’s a slow climb, hiring is on the upswing