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Please be advised that future verbal and written communications from the bank may be in English only. These communications may include, but are not limited to, account agreements, statements and disclosures, changes in terms or fees; or any servicing of your account.

Por favor, tenga en cuenta que es posible que las comunicaciones futuras del banco, ya sean verbales o escritas, sean únicamente en inglés. Estas comunicaciones podrían incluir, entre otras, contratos de cuentas, estados de cuenta y divulgaciones, así como cambios en términos o cargos o cualquier tipo de servicio para su cuenta.

Informamos que as futuras comunicações do banco, verbais e escritas, podem estar disponíveis apenas em inglês. Essas comunicações podem incluir, entre outras, acordos de conta, extratos de conta e divulgações, alterações aos termos ou tarifas, ou qualquer tipo de serviço pertinente à sua conta.

仅此通知,本行即日起发出的口头及书面通信可能将只提供英文版本。这些通信可能包括但不限于账户协议,账单和通知,条款或费用变更;或任何为您账户提供的服务。

Please be advised that future verbal and written communications from the bank may be in English only. These communications may include, but are not limited to, account agreements, statements and disclosures, changes in terms or fees; or any servicing of your account.

Por favor, tenga en cuenta que es posible que las comunicaciones futuras del banco, ya sean verbales o escritas, sean únicamente en inglés. Estas comunicaciones podrían incluir, entre otras, contratos de cuentas, estados de cuenta y divulgaciones, así como cambios en términos o cargos o cualquier tipo de servicio para su cuenta.

Informamos que as futuras comunicações do banco, verbais e escritas, podem estar disponíveis apenas em inglês. Essas comunicações podem incluir, entre outras, acordos de conta, extratos de conta e divulgações, alterações aos termos ou tarifas, ou qualquer tipo de serviço pertinente à sua conta.

仅此通知,本行即日起发出的口头及书面通信可能将只提供英文版本。这些通信可能包括但不限于账户协议,账单和通知,条款或费用变更;或任何为您账户提供的服务。

Mature man taking a vaccine from his doctor

Perspectives

"V" is for victory: Investor doubts at a time of maximum COVID

David Bailin

By David Bailin

Chief Investment Officer

January 24, 2021Posted InFixed Income, Investment Strategy and Equities

When a country is at war, it is hard to imagine peacetime. The news of new COVID variants, insufficient vaccine supplies and peaking Winter infection and death rates are hard to square with a stock market reaching new daily highs in the US and China. Given investor experience with the market recovery from the 2008 Financial Crisis, many rightly wonder if the US and world economy can really snap back quickly from the COVID recession of 2020. 

Let’s look at the data. Vaccinations are just beginning. The US exceeded the rate of 1 million doses a day just last week. To date, 5% of the US population has received at least one shot of the vaccine. Meanwhile, January 2020 looks to become the deadliest month of the pandemic with nearly 100,000 deaths likely. However, the seasonality of the disease shows that there are improving trends even before the vaccine becomes widely available. New cases, hospitalizations and deaths are, thankfully, already trending lower and the nature of the coronavirus suggests the deceleration may gain speed.  This would create ideal timing for vaccinations, as the best time to give them is when the disease is in abeyance. Thus, a “third wave” of COVID may be mitigated and herd immunity achieved sooner. Dr. Anthony Fauci suggested on January 22 that immunity may be reached by September in the US.

The economy faced great turmoil from the pandemic. The most COVID-impacted sectors of Transportation, Recreation, Food Services and Accommodations declined by the equivalent of 25 years of growth in the Spring of 2020. Some of that decline shifted consumption towards goods as consumers purchased appliances, fitness equipment and electronics in record volume. This drove shortages throughout the year and a revival of imports from Asia, boosting that region. 

The health threat is now again holding down economic activity more noticeably. In December, the US posted the first monthly decline in employment in nine months on renewed weakness in leisure and hospitality. And there is the possibility that new variants of COVID might extend the “season” for the virus later into the spring. 

Thus far, financial markets have been able to look past these dark days and conflicting narratives. The election of President Biden who has proposed massive new stimulus as well as program of mass vaccination, has countered the devastating health news and worsening labor market. 

Some investors must be harboring doubts after a strong market rally, with the consensus of US economists having marked up their 2021 GDP forecasts to a 4.3% gain. Plenty are competing to show off the most attention-getting high forecast.  Broadly speaking, it is critical that the economy begin to deliver on its ample recovery promises sooner than later. 

Read the CIO Strategy Bulletin