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The Transcript: 2020 Year in Review

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The Year in Review: 2020 was an unprecedented year and The Transcript covered the economy throughout all of its twists and turns.   Even though China was battling Covid in 2019, no one really knew what was in store for all of us in 2020. Fears of a Covid outbreak began to destabilize US markets in February and hit in earnest in early March.  The US economy completely shut down in that month and created the sharpest recession in US history.  Overwhelming stimulus (3x as much as in the financial crisis) blunted that blow though and helped lead to the sharpest rebound in US history.

By the second half of the year, the topline economy was almost back to normal, but with a large disparity between winners and losers–a K shaped recovery.   The winners were winning bigger than ever before. Technology, capital markets, and housing were three industries that boomed. Counterintuitively, the K shape helped to propel the winners even more by keeping policymakers focused on stimulus and communicating that rates would stay low for years to come. For the stock market, this culminated in a momentum stock and IPO frenzy, unlike any seen since 1999. 2020 was an election year, and a new President will take over the US in 2021 but this almost seemed like a footnote in 2020. Republicans retained control of the US senate and capital markets benefitted from a split government and diminished risk of higher taxes. The week after the Presidential election, Pfizer announced a promising vaccine candidate, which began to be given in December.  Optimism is high that 2021 will be a more normal year. While the stimulus was integral, the economic hero of 2020 was the US consumer–the little engine that could–who would rather risk the continued spread of COVID than change spending and lifestyle habits. The pandemic slammed into the US economy but the US consumer barely paused.

Among the big questions for 2021: How has this pandemic fundamentally restructured the economy, if at all?  How much will people work from home and how will this affect demographic and geographic choices?  How long will the government maintain stimulus and will this finally lead to the end of deflation? Can Tesla (TSLA) sustain a $1T market cap and can bitcoin hit $200,000?

January 20

2020 began with a surge of optimism

“Obviously labor market is very strong and the Fed and the ECB on hold, and then capital spending is still a bit soft, but sentiment is at least, certainly better than it was six months ago. So we have a, broadly speaking, constructive outlook headed” – JPMorgan Chase (JPM) CFO Jennifer A. Piepszak

January 27

It was hard not to be happy with the economy

“…it’s hard not to be happy with the economy…the markets are expensive. But the economy is doing well.” – Morgan Stanley (MS) CEO James Gorman

The consumer was strong

“…the underlying strength of the consumer continues to be very, very strong. That’s making up or carrying the economy through some weakness on the manufacturing side, where capital investment has been a little bit slower than we would like to see.” – Goldman Sachs (GS) CEO David Solomon

Recession fears had recently faded

“The imminent global recession fears have abated with the help of economic easing from the leading central banks.” – Halliburton (HAL) CEO Jeff Miller

February 3

Covid started to become a concern in February

“…over half our stores closed in the market…The magnitude of the impact will depend on the duration of store closures as we work with local authorities to manage the situation and protect our partners and customers. …we expect these events to have a material impact on our International segment and consolidated results for the second quarter and full year of fiscal 2020.” – Starbucks (SBUX) Group President, International, Channel Development and Global Coffee & Tea John Culver

February 10

At first, most thought Covid would only have a short term impact

“Longer term, we don’t think the coronavirus will have any impact whatsoever. Our experience with the SARS and the avian bird flu five, six years ago was that actually it was mildly good for the short-haul business here in Europe. More people were likely to holiday in Europe rather than travelling long-haul to Asia, etc, and we would think that will play out again. But we should be wary on the short-term impact.” – Ryanair (RYAAY) CEO Michael O’Leary

“right now, the markets are trying to get to grips with the impact of the virus outbreak in China. Will it impact overall economic growth? Will there be demand disruption? I think very short-term, immediately, as we are talking, the answer is yes. No doubt. Because China is slowing down and sometimes stopping activity.” – Total (TOT) President, Strategy & Innovation Helle Kristoffersen

February 17

But it was clear that Covid was having a significant impact on the Chinese economy

“For our e-commerce business, the delay in employees returning to work following the Spring Festival holiday is preventing merchants and the logistics companies from resuming operations. For the first two weeks after the Chinese New Year holiday, we have observed negative impact on our commerce business, as merchant operations have not returned to normal and a significant number of packages were not able to be delivered on time.” – Alibaba (BABA) CEO Daniel Zhang

March 2

The Chinese economy came to a standstill

“We began to see the impact of the coronavirus on our business in mid-January with occupancy declines gradually spreading from Wuhan to other markets in the Asia Pacific region. In February RevPAR at our hotels in Greater China declined almost 90% versus the same period last year.” – Marriott International (MAR) CEO Arne M. Sorenson

But there were still very few cases in the US

“we’ve got very very few cases in the U.S. Obviously we’re all watching that to look at. But we’re not really seeing a measurable impact yet.” – Marriott International (MAR) CEO Arne M. Sorenson

March 9

In the first week of March reality hit

“This is not a drill. This is not the time to give up. This is not a time for excuses. This is a time for pulling out all the stops…This is a serious disease. It’s not deadly to most people, but it can still kill.” – WHO Director-General Tedros Adhanom

Shockwaves were felt through the US economy

“So what changed really was, I would say over the course of the last couple of weeks we’ve seen a broader spread of the virus. We’ve seen it begin to spread a bit here in the United States.  But for us, what really matters of course is not the epidemiology but the risk to the economy. So we saw a risk to the outlook for the economy and chose to act.” – Federal Reserve Chair Jerome Powell

Consumers began to hoard

“I mean the shopping frequency is off the charts for the last few days. And you see it on social media with people sending in pictures…It’s been a little crazy this past week in terms of outside shopping frequency and sales levels and not only in the United States.” – Costco (COST) CFO Richard Galanti Office

Workers started to work from home

“In order to reduce the risk of virus transmission, we’re taking measures to maximize “social distancing” by asking employees at Lilly’s US facilities to work from home if possible, and by restricting travel within the United States.” – Eli Lilly (LLY)

And policymakers began to worry that the virus would have a long term impact on the economy

”the virus and the measures that are being taken to contain it will surely weigh on economic activity both here and abroad for some time” – Federal Reserve Chair Jerome Powell

The Fed responded with rate cuts

“Monetary policy can be an effective tool to support overall economic activity. We do recognize that a rate cut will not reduce the rate of infection. It won’t fix a broken supply chain. We get that.” – Federal Reserve Chair Jerome Powell

“You can’t blame the Fed for cutting the rates . They are just probably going to have to do it again, because this situation doesn’t seem to be doing anything but continuing.” – DoubleLine Capital CEO Jeffrey Gundlach

March 16

By the second week off March, daily life had come to a halt

“Daily life has come to a halt, it certainly appears if you are a human being on this planet…this is a humanitarian crisis, let’s be honest. And so I think when people are worried, look, I’m doing the same thing that everybody else does. Right? You go into grocery store and there is no toilet paper, and panic buying, we get panic buying, panic selling, we get panic selling.” – Korn Ferry (KFY) CEO Gary Burnison

Policymakers pledged to do whatever it took to support the economy

“This is the bazooka, and we will use it to do whatever it takes..We are making an unlimited pledge, to the smallest businesses, from taxi-drivers, to the creative industries, to really big firms with tens of thousands of workers” – German Finance Minister Olaf Scholz

“We will do whatever is necessary to support the Europeans and the European economy” – European Commission President Ursula von der Leyen

“I can assure you, we will use whatever tools we need to make sure that the industries that are impacted by this get through this.” – The US Treasury Secretary Steven T Mnuchin

The Fed cut rates to zero and restarted QE

“The effects of the coronavirus will weigh on economic activity in the near term and pose risks to the economic outlook. In light of these developments, the Committee decided to lower the target range for the federal funds rate to 0 to 1/4 percent.–ver coming months the Committee will increase its holdings of Treasury securities by at least $500 billion and its holdings of agency mortgage-backed securities by at least $200 billion.” – The Federal Reserve

March 23

By mid-March, it was clear that Covid would be a challenge unlike any that the world had seen for nearly 100 years

“This presents an unprecedented challenge.” – Volkswagen (VWAGY) CFO Frank Witter 

“The coronavirus pandemic is a public health emergency unprecedented in recent history” – ECB Christine Lagarde

“COVID-19 is like nothing we’ve ever seen before. For a company that’s 92-years-old—that’s borne witness to the Great Depression, World War II ,and many other economic and global crises—that’s saying something.” – Marriott (MAR) CEO Arne Sorenson

“The coronavirus outbreak is a very unique situation. I’ve never experienced a significant amount of time where the companies – the country, if you will, will shut down, if you will.” – 51job (JOBS) COO Kathleen Chien

March 30

Many believed that the recession would be at least as bad as the financial crisis

“…the outlook for global growth: for 2020 it is negative—a recession at least as bad as during the global financial crisis or worse.” – IMF Managing Director Kristalina Georgieva

But others were optimistic that we would rebound in the second half

“We are modelling an improvement in the trajectory of economic activity later into the second half of calendar 2020, with a further rebound in economic momentum into 2021.” – Micron Technology (MU) CEO Sanjay Mehrotra

“We know that economic activity will decline probably substantially in the second quarter, but I think many expect and I would expect the economic activity to resume and move back up in the second half of the year” – Federal Reserve Chair Jerome Powell

There had been a massive amount of stimulus

“I signed the single biggest economic relief package in American history and I must say, or any other package…It’s a 2.2 trillion dollars [relief package].” – US President Donald Trump

April 6

In early April there began to be signs that the growth rate of infection was slowing and we were flattening the curve

“…we’re looking at this seriously now because by the data we could be either very near the apex or the apex could be a plateau and we could beyond that plateau. Right now we won’t know until you see the next few days.” – New York Governor Andrew Cuomo And even though the consumer was being hit hard, it’s tough to keep the US consumer down “…people are going to want to get out. People are going to be dying to get out. Spring is coming. The weather is going to be nicer. Hopefully, the virus subsides and speed. People are going to want to get out.” – RH (RH) CEO Gary Friedman

April 20

The economic data was unfathomably bad

“We’re seeing, you know, horrible data for the second quarter. We’re already seeing that data, obviously in regional sales, in unemployment and other indicators.” – New York Fed President John Williams

“Our economists have updated their outlook and now have GDP down 40% in the second quarter and unemployment at 20%. That’s obviously materially different.” – JPMorgan Chase (JPM) CFO Jennifer Piepszak

But there were also signs of life

“I will say that in just the last week we started to see bookings outside of 90 days start to tick up a little bit. Again, those could be changed in the future, that doesn’t seem to be the case, but it seems to be a little bit an indication that maybe our country is ready to get moving again.” – American Airlines (AAL) CEO Doug Parker

April 27

Stimulus started to hit the economy

“There is a lot more that we don’t know than what we know, though, and how things are going to impact. The government’s going to have over $6 trillion of stimulus when it’s all said and done. That’s 3 times more than what they had in the Great Recession. We really don’t know how effective those programs are going to be.” – Trust Financial Corporation (TFC) CFO Daryl Bible

And old consumer habits die hard

“As time goes forward, people start to get a bit tired of cooking and eating the same thing. Some of the pantry loading that they’ve done, it starts to bleed down a bit over time.  I also think, we and I suspect the rest of the industry, probably are seeing some near-term impacts here from some of the stimulus dollars that have gone out” –  Domino’s Pizza (DPZ) CEO Richard E. Allison

“We don’t know how long this pandemic will last, but we are confident that travel and tourism spending in each of our markets and around the world will eventually recover. As surely as day follows night, people will travel again, shop again, come together again to enjoy entertainment and social interaction, to exchange ideas and to conduct business.” – Las Vegas Sands (LVS) CEO Sheldon Adelson

May 4

The mood of the country seemed to have improved significantly

“I like everybody else was a news junkie coming when this thing first broke and you turn on the President’s briefing and the world’s going to end. And so you kind of get hunkered down mentality and as news has come out more and more and more it just you get a sense that it’s not going to be as bad as the initial thought might have been…the mood of the country seems to have improved significantly over the last 30 days” – D.R. Horton (DHI) President & CEO David Auld

But there were also concerns that desire for normalcy was outpacing reality

“I remain very concerned that this health emergency and therefore the economic fallout will last longer than people are currently anticipating. And while there are massive societal costs from the current shelter-in-place restrictions, I worry the reopening in certain places to quickly before infection rates have been reduced to very minimal levels, will almost guarantee future outbreaks and worse, longer-term health and economic outcomes.” – Facebook (FB) CEO Mark Zuckerberg

A V-shaped recovery seemed unlikely

“…realistically, we just can’t expect that things are going to be back to normal in 6 or 12 months. I don’t believe that for a minute…And if it’s a V-shape recovery, well, we’ll all high-five each other and we’ll go buy some more airplanes. But I don’t think that’s the most likely outcome right now” – Southwest Airlines (LUV) Chairman & CEO Gary Kelly

May 11

Companies were reporting signs of improvement.  The housing market showed signs of strength.

“The real estate market is predominantly open. And it’s clear that we have passed peak here…but new listings are down which means inventory is low…there are lots of fish biting, but just not a lot of bait in the water…Our challenge now will be to educate the industry and educate sellers on the fact that it is actually pretty interesting time to throw some bait in the water if you want.” – Zillow Group (Z) CEO Rich Barton

“…quite frankly, at – on our retail lots, we had an actually very good week the last week of April. As the situation starts to turn around and we’re able to sell more cars, we certainly will.” – Avis Budget (CAR) CEO Joe Ferraro

May 18

Negative trends appeared to have bottomed

“To state the obvious, we are operating in a very challenging environment. However, the glimmer of good news is that overall negative trends appear to have bottomed in most regions around the world” – Marriott International (MAR) Arne M. Sorenson “In the past few weeks, we have seen the number of impacted suppliers drop by more than half, which is a very good sign” – Ingersoll-Rand (IR) CEO Vicente Reynal

June 8

George Floyd’s murder brought racial injustice front and center into corporate America

“As the CEO of the world’s largest health-care company, I must state unequivocally that racism in any form is unacceptable, and that black lives matter.” – Johnson & Johnson (JNJ) CEO Alex Gorsky

“Even though I’m the CFO of a global bank, the killings of George Floyd in Minnesota, Ahmaud Arbery in Georgia and Breonna Taylor in Kentucky are reminders of the dangers Black Americans like me face in living our daily lives. Despite the progress the United States has made, Black Americans are too often denied basic privileges that others take for granted. I am not talking about the privileges of wealth, education or job opportunities. I’m talking about fundamental human and civil rights and the dignity and respect that comes with them. I’m talking about something as mundane as going for a jog. Racism continues to be at the root of so much pain and ugliness in our society – from the streets of Minneapolis to the disparities inflicted by COVID-19.” – Citigroup (C) CFO Mark Mason

June 15

The worst for the economy was behind us

“At this point in time, the worst is more or less behind us. We are starting to see countries wanting to open up. We’re starting to see companies start taking baby steps. We’ve seen China actually now get aggressive in terms of the supply chain – the ports opening up and forcing other ports to open up as well” – Keshav Murugesh Group CEO Christine Ta

“…we have clearly seen what I think at this point in time is the bottom of the volume decline and we have been inching up week after week after week, as we have moved through May and now into June. Clearly, the increases are slight, but the trend line is promising.” – CSX Corporation (CSX) CEO Jim Foote

June 22

Demand bounced back surprisingly strong

“We’ve been pleasantly surprised how demand has come back…We’re cautiously optimistic as we see demand resuming.” – General Motors (GM) CEO Mary Barra

“Our parcel business is up strong double digits right now. We are seeing the e-commerce demand flow through to our rail business.” – Union Pacific (UNP) CEO Lance Fritz

“The reality is we are getting bookings for (2021), and it’s at a great pace” – Carnival (CCL) CEO Arnold Donald

June 29

A second wave of infections was building but economies were opening anyways

“Over 75 percent of countries are now reopening at the same time as the pandemic intensifies in many emerging and developing economies. Several countries have started to recover. However, in the absence of medical solution, the strength of this recovery is highly uncertain, and the impact across sectors and countries highly uneven…” – IMF Economic Counsellor and Research Department Director Gita Gopinath

People seemed willing to accept higher infection rates

“Right now we are seeing rising infection rates, but … it’s very apparent to me that the world is accepting higher diseases, higher infection rates … and markets are still pretty stable..I think the market is probably a little ahead of itself at this time, because I still believe we are witnessing real tragedies in the small and medium businesses. What’s remarkable is there are more human beings being affected by the disease today than on March 21 when markets were 40% lower” – BlackRock (BLK) CEO Larry Fink

July 6

People became fatigued with modulating their lives

“In the first couple of weeks, you had this kind of momentum. And everybody’s like, okay, we got to do this and we are all in this together. And let’s go and figure it out. …But as time goes by, people are getting really fatigued with this..I think a lot of people are realizing that post-vaccine, it will be a lot better but it won’t be perfect.” – Steelcase (SCS) CEO Jim Keane

But the virus still had a lot of room to move

“We all want this to be over. We all want to get on with our lives. But the hard reality is that this is not even close to being over. Most people remain susceptible, the virus still has a lot of room to move.” – World Health Organization Executive dirtectorTedros Adhanom Ghebreyesus

July 13

The virus continued to accelerate

“…we’re all watching the news and seeing how this virus is continuing to accelerate. Should that happen, I think there’s a good chance there’s going to be elevated needs moving forward and one of the things we put a premium on was getting – you can see our inventory numbers, getting inventory, getting that PPE janitorial inventory into our warehouses.” – MSC Industrial Direct (MSM) CEO Erik Gershwind

And so did the economy

“…listen, every day may kind of bounce up and down a couple of percentage points, but the overall trend is an unmistakably positive trend. When I translate that to globally, that trend is absolutely positive on a week-on-week basis.” – Uber Technologies (UBER) CEO Dara Khosrowshahi

The Chinese economy was basically back to normal

“So, our hotels in China all have already come back to some degree of business. Those that are within driving distance of a major metropolitan centre have recovered fully.” – Banyan Tree Holdings (SGX: B58) Executive Chairman Ho Kwon Ping

July 20

It wasn’t all V though.  A recessionary environment could extend deep into 2022.

“I don’t think anybody should leave any bank earnings call this quarter simply feeling like the worst is absolutely behind us, and it’s a rosy path ahead. We don’t want people leaving the call simply thinking the world is a great place and it’s a V-shaped recovery…In some areas, the cases are still rising and some areas are rising less. Economic predictions have been revised and the forward path has deteriorated from last quarter. Baseline projections now extend the length of the recessionary environment into 2022 deep into 2022” – Bank of America (BAC) CEO Brian Moynihan

But this was not a normal recession.

“This is not a normal recession… in the normal recession, unemployment goes up, delinquencies go up, charges go up, home prices go down. None of that’s true here. Incomes go down, savings go down. Savings are up, incomes are up, home prices are up. So, you will see the effect of this recession. You’re not going to see it right away because of all the stimulus and the fact, 60% or 70% of the unemployed are making more money than they were making when they were working. So, it’s just very peculiar times.” – JP Morgan (JPM) CEO Jamie Dimon

July 27

There were signs of slowing with the surge in infections

“We had very strong bookings in place for the third quarter, at the beginning of this month. Then over the last several weeks, with the spike in Covid-19 cases, we’ve seen the bookings slow down dramatically and we’ve also seen an increase in cancellations.” – Southwest Airlines (LUV) CEO Gary Kelly

“…with persistent or accelerating infection levels in many states, we’re seeing some reversals of reopening plans, which will likely reduce the pace of future employment gains while no one knows the exact course of the U.S. economy. It is likely to be slower than anticipated over the next several months as a result” – Blackstone (BX) CEO Steve Schwarzman

But markets became disconnected from the human crisis

“This crisis is a human crisis: It has a human toll and a human impact. I think the economic scenario is uncertain [and] concerning, and I think markets are disconnected from that at the moment….Markets are disconnected with that at the moment. They’re responding to the fact that rates are zero and there’s a conviction for more monetary and fiscal stimulus and that’s obviously bolstered asset prices” – Goldman Sachs (GS) CEO David Solomon

August 3

Lagging economic data showed that this was the most severe recession in our lifetimes

“The current economic downturn is the most severe in our lifetimes…We went from the lowest levels of unemployment we had in 50 years to the highest levels we’ve had in 90 years and we did it in the space of two months” – US Federal Reserve Chair Jerome Powell

“Real gross domestic product (GDP) decreased at an annual rate of 32.9 percent in the second quarter of 2020” – US Bureau of Economic Analysis But some industries were booming

“Demand is still super high. What we’re seeing on – it’s driven by Prime members and Prime member engagement. They’re shopping more often. They have larger basket sizes.” – Amazon (AMZN) CFO Brian Olsavsky

‘We’ve never seen such a sharp increase in home buying intent…bidding wars have strung up in places where they were once uncommon because market conditions and customer loads have swung wildly from February to July…Now we’re scrambling to capture demand. Blowing out our financial projections from just a few months ago. We’re running naked through the jungle with a Bowie knife clenched between our teeth, which is the way Redfin was born to be.” – Redfin (RDFN) CEO Glenn Kelman

Thanks in part to government stimulus

“We set a June quarter record with revenue of $59.7 billion, up 11% from a year ago. Both products and services set June quarter records and grew double-digits and revenue grew in each of our geographic segments, reflecting the broad base of this success…probably some pick up because of the economic stimulus that hit different countries at different points in time.” – Apple (AAPL) CEO Tim Cook

The Fed pledged to maintain stimulus for a very long time

“I said earlier or a while back, we’re not even thinking about raising rates…I wouldn’t look for us to be sending signals about cutting back on facilities or anything like that for a very long time. We’re in this until we’re well through it, and I think the picture is you have the lockdown. Then you have the reopening. But there’s probably going to be a long tail… everyone should know that we’re going to be there for all of that.” – US Federal Reserve Chair Jerome Powell

August 10

There was a huge disparity growing between economic winners and losers.  Some industries were booming but others were still completely shut down. “In the last 5 months, our company and the cruise industry at large has experienced more adversity than at any other time in our 50-plus-year history. The negative effect the cruise industry faces from the COVID crisis eclipses that of 9/11, the Great Recession, and any other stress test scenario that once imagination has ever modeled combined. Looking back, it would have been unimaginable for us to foresee that today, 5 months after the initial suspension of service, which was declared on March 13, that our entire 28-ship fleet would still be at a complete standstill.” – Norwegian Cruise Line (NCLH) CEO Frank Del Rio

August 17

Virus numbers remained frustratingly high in the US

“The virus numbers are frustratingly high particularly in the United States, and they remain high, and it is hard to look across the country and see the kind of what strategy that we’d like to see to have confidence that we can put this thing behind us sooner rather than later.” – Marriott International (MAR) CEO Arne Sorenson

August 24

But consumers kept spending

“The results we reported this morning are truly unprecedented. On the top-line, we delivered second-quarter comparable sales growth of 24.3%, the strongest we’ve ever reported” – Target (TGT) CEO Brian Cornell “Sales for the second quarter were $38.1 billion, up 23.4% from last year. Comp sales were up 23.4% from last year with U.S. comps of positive 25%” – Home Depot (HD) CEO Craig Menear

August 31

By the end of August it felt like the economy was accelerating for un-impacted industries
“I’ll tell you, at this moment in time there has never been a time when we’ve had to go faster. We’ve had to deliver customer success faster and we’ve had to be there for our customers…each crisis tends to bring us to the future faster. And that appears to be what’s happening here” – (CRM) CEO Marc Benioff
“COVID-19 is accelerating existing trends that we’ve seen and we’ve observed that we’ve seen a decade’s innovation in a few months” – WPP (WPP) CEO Mark Read
“Sometimes it takes a decade to make a week of progress, sometimes it takes a week and you make a decade of progress. That’s kind of the transition that we’ve seen” – VMWare (VMW) CEO Pat Gelsinger

September 14

Things started to move really really fast
“…the pandemic hit in mid-March, mid to late March and our revenues dropped by just about 40 points. And in a three month period, little over three months, our demand went from 40 down to 40 up, right, roughly, just directionally. So it’s an 80 point swing…it’s funny I’ve never spent too much time looking at our business kind of day to day. But it changed so dramatically day to day and we are learning.” – RH (RH) CEO Gary Friedman
In recent months…growth curves that were supposed to play out over years have been compressed into quarters and even months.
” – Chewy (CHWY) CEO Sumit Singh And by September we were adjusted to a new normal “…we went through a period of time where people just got very focused six months ago on…- we need to get things up and going quickly. We need to work in a remote environment…we can’t run our business, we can’t figure them out…while I think there is still some of that for sure that has definitely calmed down.” – DocuSign (DOCU) CEO Dan Springer
“I think we are seeing some gradual sort of I guess this return to patterns that customers get comfortable with in a COVID environment as – continue to see large basket sizes and fewer trips” – The Kroger (KR) CFO Gary Millerchip

September 21

We basically learned to live with COVID and still engage in economic activity
“What’s happening is basically we’re learning to live with…COVID which still spreads. And we’re learning to engage in economic activity.” – Federal Reserve Chair Jerome Powell
As a result, the economy looked better than anyone thought it would
“I’ll start by saying that things look better than we thought they would. The data looks pretty good relative to what we would have thought at second quarter earnings. But, importantly, we still haven’t seen the typical recessionary indicators that you would expect to see at this point.” – JPMorgan Chase (JPM) CFO Jen Piepszak

September 28

Covid created big winners and big losers

“I think one of the things that happen out of COVID is, the winners win bigger. There’s an awful lot of consolidation. The leaders in a sector are pulling away from the also-rans…we’re in a bit of a world where the winners have access to great amounts of cheap capital.” – Blackstone (BX) Executive Vice-Chairman Tony James

October 5

The losers asked for more stimulus

“Our plan is to get Congress and the administration to come together and get a relief bill passed. There is enormous bipartisan support for it.” – American Airlines (AAL) CEO Doug Parker

“The pandemic has been a devastating financial blow to cinemas…69% of small and mid-sized movie theater companies will be forced to file for bankruptcy or to close permanently…Theaters need specific relief targeted to their circumstances” – Letter by National Association of Theatre Owners (NATO), The Motion Picture Association of America (MPAA) and the Director’s Guild

October 12

It’s been a K shaped recovery

“Most countries are going to be faced with uneven recovery and we see in many cases a “K,” with parts of the economy doing really well, and other parts contracting dramatically.” – IMF Managing Director Kristalina Georgieva

Which meant that the Fed would keep its foot on the accelerator

“What I think will be surprising a little bit to markets is that the economy will continue to improve, possibly more rapidly than financial markets currently think, and yet the Fed will just keep with its current policy. To the extent there’s a surprise ahead in 2021, I think that may be what the surprise is.” – Federal Reserve Bank of St. Louis President James Bullard

October 19

The overall performance of the economy was an upside surprise “…in the third quarter, Our own Bank of America economic experts predict a sharp rebound in third-quarter GDP of around 30%” – Bank of America (BAC) CEO Brian Moynihan “The unprecedented joint monetary/fiscal policy response by many governments, including the US, is providing a bridge for disrupted income streams and has so far surprised on the upside.” – BlackRock (BLK) CEO Laurence Fink

October 26

Federal elections posed some risk to US markets

“I think it will pick up when the results come up, especially if the Senate goes to Democratic, I expect that people will start taking the long-term gains because of the expected 43% long-term capital gains tax rate. And then of course, we are looking further on the road more and more expanding and that will result in asset inflation, including higher and higher stock prices.” – Interactive Brokers (IBKR) Chairman Thomas Peterffy

November 2

But the strength of the economy seemed to transcend election risk

“Well look there’s a lot of volatile — there’s a lot of things up in the air right — there’s an election [this] week and there is a virus out there. But what I’m seeing would lead me to believe we’re in a long-term a M&A cycle two years to three years easy.” – Moelis & Company (MC) CEO Ken Moelis

COVID may have actually led to a surge in productivity

“Right now we feel like it’s exceptionally busy and two things are happening, one is we’re getting extraordinary efficiency in the way the bankers use their time — I mean literally our bank — I’ve talked to bankers and they’re on their resume from all the way 7:00 AM to 7:00 at night. I used to ask your banker, were you busy this week? And they said well I had to travel to Germany and then I came back and I had to get to the West Coast and then came back and so they’re literally talking about two-thirds of their — 90% of their work time was getting to or from an airport. I think we’re getting more production per hour — because of that dramatically because of where people are and actually we are getting less expenses, so it’s a pretty interesting what’s going on right now” – Moelis & Company (MC) CEO Ken Moelis

November 9

The US got a new President Elect “I am humbled by the trust and confidence you have placed in me. I pledge to be a President who seeks not to divide, but to unify. Who doesn’t see Red and Blue states, but a United States. And who will work with all my heart to win the confidence of the whole people.” – President-Elect

Joe Biden Covid cases began to surge again

“Going into the fourth quarter, here, we are having to rethink the COVID resurgence that we are seeing right now with, yesterday, as I said, over 100,000 cases, but we are peaking back up into a third wave. And from everything we can see, the third wave looks more significant than the first two.” – iRhythm (IRTC) CEO Kevin King

But the economy felt better prepared for another winter surge

“…while it’s looking like we’re going to have another wave of some form of potential partial shutdown even in the U.S., I think most of our advertisers are more prepared to think about that and to handle that shutdown in a way that is very different than what they did in Q2, which was panic first and shut everything off and then try to figure things out.” – Cardlytics (CDLX) CEO Lynne Laube

November 16

Pfizer announced a vaccine with 90% effectiveness.  A light at the end of the tunnel.

“It is a great day for science. It is a great day for humanity. When you realize that your vaccine has a 90% effectiveness. That’s overwhelming. You understand that the hopes of billions of people and millions and businesses and hundreds of governments were felt on our shoulders. Now, we can credibly tell them. I think we can see the light at the end of the tunnel.” – Pfizer (PFE) Chairman & CEO Albert Bourla

November 23

The consumer never stopped spending

“The consumer economy has, I think, outperformed everyone’s expectations…The economy, I think, is resilient. The economy was relatively strong going in. And I think we’re – hopefully, we get back to where we were soon.” – CSX (CSX) CEO James Foote

December 7

What a year it was

“What an interesting year, I don’t think I have to be the millionth person to say that, but it is stunning to me to think, what a year. We’re like 30 days away from the end of the year, and it’s been an incredible 12 months that’s for sure.” – Microsoft (MSFT) Corporate VP Jared Spataro

December 14

The year ended with an IPO bang

“…it’s been quite a year. I did not think when this year started it would be like this…I don’t think I’m gonna worry much more than in April and May when we saw our business drop 80% in eight weeks in the middle of a pandemic. So, I’m just, I just want to say I’m so grateful to be here today,” – Airbnb (ABNB) Co-Founder & CEO Brian Chesky

And lots of confidence in 2021

“I think when you look at the combination of tests more widely or testing more widely available, you look at the prospects of multiple vaccines being rolled out, that certainly does give us a sign of light at the end of the tunnel. And I think the combination of those things make us a bit more confident that next year it is more likely to show signs of normalcy” – Citigroup (C) CFO Mark Mason