Tag: Market Viewpoints

Market Viewpoints – Summer 2021

Keith Bonjour, Portfolio Manager
Keith Bonjour, CFP® Vice President, Portfolio Manager

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.

In the Community – Summer 2021

Our Non-Profit Community Spotlight

The Putnam Museum World Culture Gallery

By Rachael Mullens, President/CEO

The Putnam MuseumThe 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.

Upcoming Events from our Nonprofit Partners

the catalyst awards

The Catalyst Awards & Auction | July 30, 2021 | Schweibert Park, Rock Island, IL
The Arc of the Quad Cities Area
Join the Arc of the QCA in celebration of the people and organizations who have been a light in the lives of people with disabilities and ignited a passion for inclusion at The Arc’s Catalyst Awards. Visit www.arcqca.org for bidding and tickets.

Grant Opportunity | LOIs for Nonprofit Capacity Building Grants | Due September 1, 2021
Quad Cities Community Foundation
Nonprofit Capacity Building Grants strengthen nonprofits by increasing their core systems and operations. By improving infrastructure at the organizational level, these time-limited projects help nonprofits more effectively carry out their missions. For more information on how to apply, contact Lisa Stachula at (563) 326-2840 or visit www.qccommunityfoundation.org/nonprofitcapacitybuilding.

HANDS Auxiliary Auction | October 2, 2021 | Modern Woodmen Park
Handicapped Development Center
Join HDC for an evening of entertainment, heavy hor’d’oeuvres, beverages, live and silent auctions, a TV raffle, and more. For tickets, contact Mary Egger at maryegger@hdcmail.org or call (563) 391-4834.

BASH 2021 | October 5, 8, and 12, 2021 | Scott Community College Culinary Arts & Hospitality Management Center
Scott Community College Foundation
Scott Community College will be hosting three small events on their brand new outdoor kitchen at the Culinary Arts & Hospitality Management Center. Attendees will enjoy food prepared and served with the help of the college’s Culinary Arts and Hospitality Management students. A virtual silent auction and an exciting raffle will be held. For more details, visit www.eicc.edu/sccbash.

Market Viewpoints – Spring 2021

By Keith Bonjour, Vice President, Portfolio Manager

Keith Bonjour, Portfolio ManagerBoth 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.

In the Community – Spring 2021

Our Non-Profit Community Spotlight

The Family Museum Lights a Creative Spark for Lifelong Learning

Family Museum Bettendorf

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/

Upcoming Events from our Nonprofit Partners

Annual HANDS Auxiliary Golf Outing | June 7, 2021 | Crow Valley Golf Club, Davenport, IA
Handicapped Development Center
Save the date for the annual HANDS Auxiliary Golf Outing. This years’ event will take place but will be slightly different to provide a safe environment for all participants. Contact Mary Egger at 563-391-4834 or maryegger@hdcmail.org for more information.


The Arc Charity Golf Outing | June 18, 2021 | Highland Springs Golf Course, Rock Island, IL
The Arc of the Quad Cities Area
Register online at arcqca.org.


The Catalyst Awards & Auction | July 30, 2021 | Schweibert Park, Rock Island, IL
The Arc of the Quad Cities Area
Join the Arc of the QCA in celebration of the people and organizations who have been a light in the lives of people with disabilities and ignited a passion for inclusion at The Arc’s Catalyst Awards. Visit www.arcqca.org for bidding and tickets.


Birds and You | A Putnam Museum Exhibit | Open Now!
Birds and You examines the role we all can play in protecting and preserving the birds we see every day in our backyards and fields. Visitors can expect to see a variety of taxidermy mounts, eggs, and nests while learning about the issues facing birds today. Visit www.putnam.org.

Welcome Centennial Tax & Accounting

We are very happy to welcome Centennial Tax & Accounting to Northwest Bank

Centennial Tax & Accounting

Centennial is our former firm, Blair, Westfall & Co., coming together with the expertise of Jeanne Pyle Scott and her team at Pyle, Scott & Associates, as well as Dave Schebler, CPA; Randy Sovey, CPA; Dave Thies and their support team. All combined we are now 18 people strong and will be led by Jeanne Pyle Scott.

Jeanne has been well known to us at Northwest Bank because of her outstanding reputation in her field. She spent much of her career in the private trust company and family office area serving high net worth individuals and families. We think that experience will be a wonderful asset for our clients. 

This new combined Centennial Tax & Accounting team includes six full-time CPAs and over 200 years of experience. They are uniquely positioned to deliver outstanding relationship-first accounting services to the individuals and businesses in the Quad Cities. We love that they have the expertise to confidently serve tax and accounting needs, while maintaining a size small enough to provide personalized attention and direct accessibility. 

Centennial Tax & Accounting have moved into their brand new offices on the 5th floor of our NorthPark Tower. We look forward to the opportunity to tell you more about them, and introduce you Jeanne and the rest of the team!

In the Community – Winter 2021

Our Non-Profit Community Spotlight

The Arc of the Quad Cities

The Arc of the Quad Cities

You have invested in yourself. You have funds that will provide you with the essentials to live your best life, and if you’ve done things right even leave something for the next generation, bridging one generation to the next. People with intellectual and developmental disabilities rely on support for their lifetime. The Arc supports and invests in people with disabilities, helping them grow into their full potential and participate in their own communities.

The Arc promotes the equal treatment of individuals with intellectual and developmental disabilities in community life. It supports an individual’s interests so as to make available their full productive and creative capacities. The Arc has been serving the Quad Cities Area since 1952 and is proud of its accomplishments in making the Quad Cities a more welcoming and inclusive place for everyone to live. The Arc’s vision is that all people’s abilities will be valued and respected by the community so every person has the opportunity to achieve their best life. 

In honor of this vision and of the legacy of The Arc’s upcoming anniversary in 2022, we are proud to announce the establishment of two endowments that will provide a secure and permanent source of funds that strengthens and provides stability for The Arc’s services and supports. 

The Arc has established The Arc Emergency Assistance Fund at The Moline Foundation which will provide assistance to people served by The Arc who need direct financial assistance on an emergency basis. The Arc has also established The Arc of the Quad Cities Iowa Endowment which will support Enhanced Horizons and the Arc of the Quad Cities Iowa Holiday Party.  

The Wilber L. Burress Endowment provides supports The Arc of the Quad Cities Area’s services and supports. The endowment is managed by the Wilber L. Burress Trustees. 

In 2022, The Arc will have reached 70 years of making positive change. We have just over a year to reach our goals to raise to raise $70,000 in all endowments, so that the next generation of people with disabilities can enjoy the dignity of full social acceptance and the opportunity to explore their potential. 

You can use your voice and your investment to uphold the dignity of people with disabilities with your support. Visit The Arc’s website at arcqca.org/help-endow-the-future for more information on how your legacy and investment can uphold the rights of others. Or call 309-429-6067 to learn how you can be a part of a better tomorrow. 

 

Market Viewpoints – Winter 2021

By Keith Bonjour, Vice President, Portfolio Manager

Keith Bonjour, Portfolio ManagerThe stock market continued to move higher, reaching new highs in the fourth quarter of 2020, with the election having a smaller impact on stock market returns than many anticipated. In 2020, markets proved how resilient they could be facing many risk factors throughout the year, but stocks were able to recover quickly after the COVID-19 induced sell-off and end the year on a high note. The S&P 500 was down 34% from mid-February towards the end of March only to end the year up over 16%. The bond market also had a strong year with interest rates and inflation both remaining at low levels. The Federal Reserve has continued to indicate that they will hold rates near zero for the foreseeable future, and that they will continue to keep monetary policy accommodative to help support the economic recovery. Congress recently passed another $900 billion stimulus measure after much political back and forth negotiations. This new package included $600 stimulus checks to every adult and child that qualified along with additional funds for small businesses struggling during the pandemic.  

Looking ahead in 2021, the consensus view is that the stock market will continue to show positive returns with higher volatility along the way. The first half of the year will provide meaningful insights into how much further stimulus the government is willing to provide once Biden takes office. The additional stimulus measures along with a potential infrastructure package will need to be weighed against the increasing virus outbreak and the new virus strains from the UK and South Africa. Hopes are that the vaccine providers are able to ramp up production fast enough so that everyone that chooses to be vaccinated will be able to by the end of the second quarter this year. There have been several vaccines approved already with several more currently in late stage trials. Current projections are for a very strong recovery in GDP and company earnings in the second half of 2021, which has a lot to do with how well stocks have performed recently. The risk case is that if the vaccine distribution falls short or the vaccines do not prove as successful against the new strains of the virus, then this would cause economic growth not to rebound as quickly as projected, potentially weighing on stock prices.  

Expectations are for both growth and inflation to increase this year with both showing stronger gains in the second half of the year. The Federal Reserve has indicated that they are comfortable letting inflation run higher than usual in this part of the economic cycle to help the economy recover. They also expect inflation expectations to come back down to around 2% after the initial surge. The risk case is that growth and inflation both overshoot to the upside, forcing the Federal Reserve to raise rates sooner than expected. This is currently a low probability, but does bear watching as we progress further into the year. Stocks and bonds are both trading at historically high levels, which puts pressure on company earnings to meet the elevated bar set for them this year.

We are continuing to be mindful of risks facing the market in 2021 as COVID-19 cases continue to surge, and stocks and bonds trade expensive compared to their historical averages. However, central banks and governments across the globe have provided massive amounts of stimulus that continue to help drive 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 have 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 Time for Life Insurance is Now

By Patrick Olsen, Special Care Planner, Financial Services Professional | Olsen Financial

Olsen Financial

Patrick OlsenLife changes and priorities have a way of shifting. But one thing stays the same, how important family is and our desire to protect them. That’s why having life insurance is an important financial decision. It means your loved ones could be OK financially if something happened to you.

Ensuring the financial security of the people who matter most to you is an important responsibility. This means protecting the value of what you provide for them on a day-to-day basis. You don’t have to wait for a big life moment to put this important protection in place. The time for life insurance is now. Contact me today and let’s get you the coverage you need.

Contact Olsen Financial: 563.388.2530 | polsen@financialguide.com

In the Community – Fall 2020

Our Non-Profit Community Spotlight

Scott Community College Foundation

Scott Community College Foundation

Since our establishment in 1985, the Scott Community College (SCC) Foundation has worked to provide financial resources to support students and our college community. Each year we utilize the generous gifts we receive from our board members, faculty and staff members, area businesses, and many others to offer scholarships, acquire new instructional equipment, and launch special projects.

In addition to scholarships, we also support students through our Student Assistance Program. The program provides emergency funding to help with unexpected student expenses such as internet access, textbooks, laptops, or even transportation. This fund helps to ensure our students’ success and their degree completion.

We currently support students at several Quad Cities locations including: the Urban Campus, Blong Technology Center, West Davenport Center and Belmont Campus. Each student has a unique story and a unique set of strengths and challenges. Some students begin classes with a clear career goal, others discover their passion through their education. Despite all of the obstacles our students face, they all share a desire to learn, master new skills, become better providers, employees, and members of the community.

We value the strengths of the Northwest Bank Investment Management Group as they make it effortless for us to remain focused on our mission to serve our students and the college, while they help us achieve our financial goals. The team is very responsive to all our needs, quick to act when questions arise, and they make the most complicated reports and long-term planning strategies straightforward for our Investment Committee and Board Members. We greatly value their support and look forward to growing with them.

If you would like to learn more, please visit www.eicc.edu/sccfoundation

Market Viewpoints – Fall 2020

By Keith Bonjour, Vice President, Portfolio Manager

Keith Bonjour, Portfolio Manager

The stock market continued to show gains through the summer months, but has stalled a bit for the month of September. This is not an unusual event with the upcoming U.S. elections weighing on the minds of investors, and September has a reputation for being one of the worst months of the year for stock performance historically. The Federal Reserve has signaled they will remain accommodative for the foreseeable future, which will continue to hold down interest rates and weigh on the yields for cash and fixed income investments. The U.S. unemployment rate has continued to come down from peak levels in the early stages of the lockdown, but still remains at elevated levels. We think this will continue to take time to heal the labor market especially in the hardest hit sectors such as travel, leisure, and restaurants, which have a tough road ahead of them to return to pre-pandemic levels. 

After Congress passed a large stimulus measure earlier this year called the CARES Act, expectations were high that they would pass another piece of legislation to continue to support the economic recovery. So far, the House and Congress have been at an impasse for how large the bill should be. Democrats are favoring a much larger scaled up version where Republicans favor a much smaller more targeted approach. We will have to continue to wait and see if they are able to compromise before the upcoming elections, but time is quickly running out. Consensus is that the U.S economy could use additional stimulus measures in order to help sustain the recovery that is currently in place. Worries are that if additional stimulus measures are not implemented, this could weigh on an already fragile recovery. 

The market is turning its attention to the upcoming elections, which tend to add more volatility to the stock market, and we think this election cycle will be no different. We do recommend continuing to stay the course with your long-term investment objective since elections tend to have a short-term impact on the stock market historically. There should be more news regarding several high profile COVID-19 vaccine trials before the end of the year. The markets will be looking to see if one or multiple vaccines are able to show strong safety and efficiency in preventing the transmission of coronavirus as they complete their Phase 3 trials. Hopes are that we could see one or multiple vaccines approved by the end of 2020, but consensus points to first quarter of 2021 being more likely. If we do see one or more vaccines approved, the next step will be to see how quickly manufacturing capabilities can be ramped up to provide vaccines to all those individuals who want to be vaccinated. The CDC has estimated that this timeframe will probably be around the 3rd quarter of 2021. We continue to view this as an important piece of the puzzle to get the economy back on track and allow the economic recovery to sustain itself. 

While we have seen a nice recovery in the market after the COVID-19 induced sell-off, it is important to look forward and be mindful of the risks that the markets face. 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 will be needed over the next six to twelve months and to set this cash aside to protect against short term moves in the market. We recommend maintaining a more longterm focus on investment goals and objectives, and not reacting to short term up or down movements in the market.