LPL Financial Research Publishes Outlook 2021: Powering Forward

Rhea-AI Summary

LPL Financial has released its annual report, "Outlook 2021: Powering Forward", providing investment insights amid the ongoing COVID-19 pandemic. The report forecasts a 4-4.5% GDP growth for the US in 2021 and a 4.5-5% growth globally. Key insights include expected support from global central banks, a rebound in earnings allowing stocks to grow into elevated valuations, and limited inflationary pressure leading to low bond rates. The report emphasizes the need for continued stimulus to support the economic recovery.

Positive

• Forecast of 4-4.5% US GDP growth for 2021.
• Potential for S&P 500 Index target range of 3,850-3,900 with upside based on vaccine progress.
• Emerging markets expected to lead global economic rebound.

Negative

• Damage to certain sectors of the economy may never fully recover.

CHARLOTTE, N.C., Dec. 08, 2020 (GLOBE NEWSWIRE) -- LPL Financial LLC, a leading retail investment advisory firm, independent broker-dealer and registered investment advisor (RIA) custodian, today announced that its annual “Outlook 2021”, is now available in a digital version and as a downloadable PDF. The report, “Powering Forward,” contains investment insights and market guidance for 2021, a year that will bring a new U.S. president amidst the global COVID-19 pandemic.

In Outlook 2021: Powering Forward, LPL shares views on stocks, bonds, interest rates, the economy and the post-election policy environment, all in the context of new challenges and new opportunities. Key insights and forecasts discussed in the Outlook 2021 report include:

• Policy: We expect global central banks to remain supportive and for individual economies to continue to refine their response to COVID-19. In the United States, what will likely be a divided government may help limit new taxes and regulations, while still supporting additional fiscal stimulus that could include high-priority items for both Democrats and Republicans.
  
  
• Domestic Economy: Continued progress in the response to COVID-19, including further stimulus, will be the key to sustaining the recovery. COVID-19-impacted service industries may be the last to bounce back. We expect some of the accelerated innovation that came with the COVID-19 response to have a positive long-term impact. We forecast 4–4.5% US gross domestic product (GDP) growth in 2021.
  
  
• International Economy: Emerging market economies may lead in a global rebound. We believe growth in international developed economies may lag behind the United States, although a strong fiscal response may help Japan. We forecast global GDP growth of 4.5–5%.
  
  
• Stocks: An earnings rebound in 2020 and strong earnings growth in 2021 may allow stocks to grow into somewhat elevated valuations. Cost efficiencies achieved during the pandemic may persist. We see an S&P 500 Index fair value target range of 3,850-3,900 in 2021 with potential for upside with better-than-expected vaccine progress.
  
  
• Bonds: Inflationary pressure is likely to be limited, and the Federal Reserve (Fed) is expected to keep rates low, but economic improvement and even normalizing inflation could put upward pressure on rates. We see the 10-year yield finishing 2021 in a range of 1.25–1.75% with a bias toward the lower end.
  

“2020 has changed us, the way we do business, the way we connect. In 2021 we restart the engine, but we’re not driving toward the same world we left behind in 2019,” said Burt White, LPL Financial managing director and chief investment officer. “There has been damage to areas of the economy that may never fully recover, but there are other areas that will adapt, reinvent themselves and help reinvigorate growth. There are still risks to navigate in 2021, but it’s time to get back on the road.”

About LPL Financial
LPL Financial (https://www.lpl.com) is a leader in the retail financial advice market, the nation’s largest independent broker-dealer** and a leading custodian (or provider of custodial services) to RIAs. We serve independent financial advisors, professionals and financial institutions, providing them with the technology, research, clearing and compliance services, and practice management programs they need to create and grow thriving practices. LPL enables them to provide objective guidance to millions of American families seeking wealth management, retirement planning, financial planning and asset management solutions.

**Based on total revenues, Financial Planning magazine June 1996-2020.

Securities and advisory services offered through LPL Financial LLC, an SEC- registered broker-dealer and investment advisor. Member FINRA/SIPC. 

Throughout this communication, the terms “financial advisors” and “advisors” are used to refer to registered representatives and/or investment advisor representatives affiliated with LPL Financial LLC.  We routinely disclose information that may be important to shareholders in the “Investor Relations” or “Press Releases” section of our website.

Important Disclosures
Please see the LPL Financial Research Outlook 2021: “Powering Forward” for additional description and disclosure.

The opinions, statements and forecasts presented herein are general information only and are not intended to provide specific investment advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, please consult your financial professional prior to investing.

Any forward-looking statements including the economic forecasts may not develop as predicted and are subject to change based on future market and other conditions.

The Standard & Poor's (S&P) 500 Index tracks the performance of 500 widely held, large-capitalization US stocks. All indexes are unmanaged and cannot be invested into directly.

Media Contacts:
LPL Research: Christine Cannon
(631) 776-0247
ccannon@markettalknow.com

LPL Financial: Lauren Hoyt-Williams
(980) 321-1232
Lauren.Hoyt-Williams@lpl.com 

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FAQ

What are LPLA's projections for US GDP growth in 2021?

LPL Financial projects a GDP growth of 4-4.5% for the US in 2021.

What is LPLA's outlook for the S&P 500 Index in 2021?

The S&P 500 Index target range is forecasted to be between 3,850 and 3,900 for 2021.

How does LPLA view the impact of COVID-19 on the economy?

LPL Financial emphasizes that continued stimulus is crucial for sustaining the economic recovery impacted by COVID-19.

What does LPLA predict for bond rates in 2021?

LPL expects limited inflationary pressure, keeping the 10-year yield within a range of 1.25-1.75%.

What opportunities does LPLA see in 2021?

The company identifies potential growth in sectors that adapt and reinvent themselves post-COVID.