Dow falls one day after soaring to 30,000

Yahoo Finance’s Alexis Christoforous and Craig Birk, Chief Investment Officer at Personal Capital, discuss the latest market moves amid the COVID-19 pandemic.

Video Transcript

ALEXIS CHRISTOFOROUS: Craig, good to see you. I want to get to the markets in a moment. But first, just your reaction to these Fed minutes. What's your big takeaway here?

CRAIG BIRK: Hi, thanks for having me. You know, obviously, very real time. But the one thing that's been consistent is that the Fed continues to be accommodative and continues to say that we need more stimulus and, really, more support for the economy as we come out of the pandemic. And so I think that theme will continue to persist and be a driver of markets.

ALEXIS CHRISTOFOROUS: When you look at the day's economic numbers, and we got a lot of them, a rise in jobless claims, consumer spending starting to pull back a little bit. Yet, you have strength in durable goods orders. What kind of picture does this paint of the economic recovery for you?

CRAIG BIRK: Well, I think what we see is that the numbers continue to be mixed. And, you know, as we go through this very strange year, the numbers are just astronomical in many ways and hard to interpret and something that you couldn't have thought about even a year ago. But on balance, what we're seeing is that the economy does continue to recover.

And I think, importantly, although there continues to be a large number of jobs being lost, there does seem to be a large number of jobs being created. So on balance, I think it's what you would hope for.

ALEXIS CHRISTOFOROUS: And certainly, we didn't get housing out today, but we've seen the housing numbers of late. And they have been extremely strong. Do you expect housing to continue to be a tailwind for the recovery in the first half of 2021?

CRAIG BIRK: Yeah, we do. And I do think that's important, you know, as home prices and stock and asset prices continue to go up. We see the wealth gap continuing to grow. But those new housing starts and just people moving in general are great for the economy. It just creates so much activity across a number of sectors. So I think that is a really positive sign as well.

ALEXIS CHRISTOFOROUS: Let's talk about some of the headwinds. Because we said housing could be a tailwind, what are some of the headwinds you see early on for this market in the new year? I'm thinking perhaps with a new president, you know, Joe Biden has already said he wants to raise taxes on corporations day one with an executive order. What's that going to do to the rally we're seeing on Wall Street?

CRAIG BIRK: Yeah, I mean, there's obviously a lot of talk about a whole bunch of different kind of tax increases that we might see. And it's all theoretical, what they do on the market, except for corporate tax rates, which do have a direct impact. We saw in 2017. And, you know, there's talk of that-- increases the market will start to price in the various scenarios. I think realistically, it's probably a later in 2021 event, but it's coming pretty soon.

ALEXIS CHRISTOFOROUS: And before we let you go, just want your reaction to the milestone for the Dow this week. We know that we talk about these milestones, they are just a number. But they're also symbolic. So for you and for your clients, what does Dow 30,000 mean?

CRAIG BIRK: Yeah, I mean, it is just a number. But I think it is, you know, especially as we are here around Thanksgiving, an interesting one to ponder and just realize that, you know, in this year or-- you know, there's been so many difficulties and challenges. We see so much resiliency in people and from the companies that make up our public markets. And I think that's just a great thing and a reminder that our system continues to work and we continue to innovate.