Hello. This is James Mayer from the Huffman Mayer Paolo Wealth Management Group of Wells Fargo Advisors. It's hard to believe that it's February already. Here are a few things that happened last month that we think are important.
By the narrowest of margins, Democrats gained control of the Senate by winning the dual runoff elections in Georgia. So far, markets are choosing to view this change through a mostly positive lens. We expect it to be a mixed reaction from a policy perspective as greater stimulus spending this year will likely be accompanied by increased regulation on businesses and somewhat higher tax rates within the next few years. The Federal Reserve is signaling a commitment to low interest rates through at least 2023 in an effort to support the economic recovery. The mix of stimulus both direct payments to consumers, and businesses, and low interest rates should be very supportive of stock prices in general.
That being said, we remain skeptical about valuations in parts of the US stock market, especially those areas that have experienced a dramatic increase over the past three to four months. We're certainly watching the tech sector, electronic vehicles, and certain clean energy technologies. In the real world, the last few months have shown improvements in some of the hardest hit elements of consumer spending. Travel, hotel, and restaurants all showed huge improvement in late December and early January although many of these categories are still quite depressed verse where they stood before the pandemic.
We're now almost a year into this odd split market where many of the more expensive growth stocks are seeing a boost from society's adjustments to COVID-19, whereas many inexpensive value names are experiencing a drag on their results. We would like to talk to you. If you have questions about your plan, please call the office to schedule a time for us to talk. As always, stay safe, stay healthy, stay happy. Hopefully we will see you very soon.