U.S. stocks continued to show strong gains this year with the S&P touching new highs at the end of June on strong company earnings and increased consumer spending. Bond yields have also come down in the second quarter after the large increase to start the year. This helped bonds reduce the losses they suffered during the first quarter on rising yields and inflation fears. Inflation fears have been dominating headlines and worrying investors due to the large increases in demand in multiple parts of the economy leading to higher than expected inflation readings. Supply issues have continued to constrain companies from getting back to full capacity due to a lack of workers, supply chain issues, and pricing pressures. The economic recovery remains intact with GDP continuing to show a very robust rebound from the COVID induced shutdown last year. The U.S. is on track to post the strongest GDP figures in decades this year as long as the recovery continues as expected in the second half of the year. COVID-19 infections have come down meaningfully in the U.S.; however, the new Delta variant is of particular concern for its highly infectious characteristics especially for the pockets of the U.S. with the lowest vaccinations rates. This will be something important to track as the year progresses.

Consumer demand has been robust this year after last year’s lockdown measures with many consumers eager to resume spending on dining out, travel, home and auto purchases, and many other retail sectors as the economy reopens. This put a lot of pressure on companies to increase capacity quickly, but many were caught flat-footed and were unable to ramp-up production, obtain the supplies they needed, or hire back enough workers to meet the robust demand. These constraints have caused spikes in inflation along with surging prices in many different areas of the economy. However, there are signs that supply can catch-up with demand eventually noting that the prices of lumber came down over 40% in June as production increased after an extraordinary run-up in lumber prices over the last year. The Fed still views inflation as transitory expecting that the recent sharp increases should eventually subside and average inflation coming back down to more acceptable levels into 2022. We will monitor this area closely in the months ahead as new inflation indicators become available.

Congress is continuing discussion on trying to get a new infrastructure package approved. The Biden administration along with a bipartisan group of senators agreed to a $1.2 trillion infrastructure bill, The Bipartisan Infrastructure Framework, made up of almost $600 billion of new spending and the rest from dollars earmarked for previous unused coronavirus relief funds. The package proposal aims to spend the funds on infrastructure projects over a period of eight years; however, it faces a tough path forward to win approval from Congress. The proposal includes billions of additional spending to improve our nation’s infrastructure with a focus on traditional infrastructure projects benefitting roads, bridges and rail, water systems, and broadband internet access.

We maintain our view to be mindful of risks facing the market in 2021 as COVID-19 cases are on the rise again, and stocks and bonds still trade expensive compared to their historical averages. However, central banks and governments continue to provide massive amounts of stimulus that are driving up asset prices. We continue to recommend staying the course with your investment objective and to rebalance your portfolio by selling strengths and buying into weaknesses to adjust to movements in the market over time. We also recommend determining any short-term cash needs that you may need over the next six months. Creating this cash can help protect against an increase in volatility and short-term moves in the market. We recommend maintaining a more long-term focus on investment goals and objectives, and not reacting to short term up or down movements in the market.

The Putnam Museum and Science Center recently unveiled its new World Culture Gallery showcasing cultures from around the world as reflected in the museum’s historic collection. As a Smithsonian Institution Affiliate, the Putnam houses a collection entrusted to the museum by seven generations of Quad Citians, including objects from the world travels of some of the museum’s founders including the Putnam, Palmer, and Figge families.

The World Culture Gallery’s inaugural exhibit, The Colors of Culture, explores the meaning of color to people of different cultures, including the symbolism of color in adornment, home, and celebration. Raising awareness of the rich cultural diversity found right here in our own community, the exhibit is a partnership with World Relief Quad Cities and includes artifacts loaned by families from the organization’s refugee resettlement program.

The World Culture Gallery is the first of its scale since the opening of the Science Center in 2014 and was made possible by support from Bechtel Trusts, Scott County Regional Authority, the Putnam Museum Guild and numerous private donors and Trustees. Longstanding and generous support of community partners including Northwest Bank & Trust Company are how the Putnam has been able to serve the community for over 150 years.

A museum of history, culture, and science, the Putnam has served the Quad Cities region since 1867 and is the Quad Cities’ only Smithsonian Affiliate. The Putnam brings to life a sense of place, time and purpose to ignite human potential and inspire our diverse community to learn about and care for our world and all its people.

Visit putnam.org and click “Join and Support” to learn about ways you can get involved.

Both the stock and bond markets have traded in a more volatile and choppy fashion in the 1st quarter of 2021, with longer term bonds pulling back more than short term bonds on renewed worries over inflation after the additional stimulus measure enacted by Congress. The recent stimulus package, called the American Rescue Plan Act of 2021, provides an additional $1.9 trillion of stimulus via stimulus checks, extending unemployment benefits, expanding tax credits, along with aid to state and municipalities as well as other payments. The additional stimulus package on top of the large stimulus provided in 2020, along with the global economy gaining momentum on reopening hopes, has created worries in the market about rising inflation and weighed heavy on bond prices in the first quarter of 2021. The Federal Reserve is continuing their accommodative stance and have indicated they are not concerned about increasing inflation expectations. The Fed has stated they feel the increase in inflation will not last with inflation coming back in line with the Fed’s 2.0% mandate in 2022 and that they still do not foresee any increases in the Fed funds rate until at least 2023.

 
With the passage of the American Rescue Plan Act of 2021, expectations have increased for GDP growth in the United States this year. The market is pricing in a strong recovery in the second half of 2021 as more Americans become fully vaccinated and both businesses and consumers begin to open their wallets due to pent up demand. Consumers are expected to increase their spending on travel and entertainment which has helped drive a shift out of some of the best performing sectors (IE: Technology) in 2020 to the worst performing sectors (IE: Energy and Travel/Leisure). The increase in inflation expectations along with government inquiries into big technology companies have also been weighing on technology stock returns this year. We continue to recommend maintaining a well-diversified portfolio to weather the volatility.

 
COVID-19 infections rates have come down in the U.S. and vaccinations have ramped up in a meaningful way. However, the increased travel this spring and states beginning to re-open and lift restrictions has caused a recent uptick in infection rates. We are also seeing a more meaningful uptick in Europe and Latin America so even with the increase in available vaccines, the various strains of the virus still pose a risk to growth assumptions this year. It will be important for the market to continue to show signs of positive earnings growth and for the economy to continue its expected strong recovery without any new lockdown measures imposed in the second half of the year. President Biden is also proposing a new infrastructure package in a two-part proposal, the American Jobs Plan and the American Families Plan, which could aid GDP growth if enacted this year. However, it will be important to see what tax hikes are in the proposal to fund the infrastructure package and what effects those tax increases may have on corporate earnings.

We continue to be mindful of risks facing the market in 2021 as COVID-19 cases are on the rise again, and stocks and bonds still trade expensive compared to their historical averages. However, central banks and governments continue to provide massive amounts of stimulus that are driving up asset prices. We continue to recommend staying the course with your investment objective and to continue to rebalance your portfolio by selling strengths and buying into weaknesses to adjust to movements in the market over time. We also recommend determining any short-term cash needs that you may be need over the next six months. Creating this cash can help protect against an increase in volatility and short-term moves in the market. We recommend maintaining a more long-term focus on investment goals and objectives, and not reacting to short term up or down movements in the market.

The Family Museum offers interactive and educational experiences for young children in the areas of art, science, movement, and play. With 44,000 square feet of programming space, the Museum provides hands-on exhibits, drop-in classes, preschool classes, school and community outreach, dance classes, and a variety of programs geared towards children eight and under.

Visitors to the Family Museum’s interactive exhibit gallery discover how food moves from the modern farm to the local store by caring for animals, driving a combine, and moving grain in the Farm exhibit. Guests explore the Mississippi River by adding obstacles and raising or lowering water levels as they watch their boat make its journey down a 28-foot indoor waterplay table resembling an actual stretch of the Mississippi River. Visitors chat with neighbors or wave to the mail carrier in the Town Square exhibit which includes features of everyday life. And our youngest guests make alphabet soup, wash the laundry, and splash around in the virtual pond (without getting wet!) in PlayHouse.

New for 2020 is the two-story Luckey Climber! This artistically stunning structure allows Family Museum guests to climb from the first floor to the second floor while observing photographs of clouds on the platforms on the climb up and aerial photographs on the way down. While intended for young children, all ages are welcome to climb!

The Family Museum and its non-profit foundation depend on community support to serve the children and families in our community. Northwest Bank’s Investment Management Group have provided the Family Museum Foundation with expert advice and endowment support that is both efficient and lucrative. Their advisors and investment options are always supportive and best established to support the Family Museum needs.

To learn more visit https://familymuseum.org/