On Air with Altair: 3Q 2020 Market Review Video

Want to hear Altair’s analysis of the markets, but do not have the time to read all of Altair Insight? Watch our video summary of the report and you will be caught up on our market review in 3.5 minutes.

Video Summary

ECONOMIC RECOVERY

  • Despite the tumult this year, much progress has been made in recent months – both the economy and the markets are faring better than expected.
  • While the recovery has certainly been choppy, we believe that the government will remain supportive and that there will not be a double-dip recession.
  • While the data is mixed, it tilts positive overall.
  • The persistence of high unemployment is a concern, but rebounds in housing and manufacturing are encouraging and consumers are spending and reducing their debt loads.
  • Although coronavirus cases are on the rise this fall, a return to full lockdowns is unlikely.
  • Through all its fits and starts, we believe the economy ultimately is on the right path.

RISING MARKET

  • The stock market in the third quarter completed its best back-to-back quarters of performance since 2000 – thanks almost exclusively to gains by giant technology stocks.
  • This trend could continue as long as economic activity remains unusually tilted toward the trends of working and staying at home.
  • Tech and growth-oriented businesses have thrived because they generally have experienced the least interruption during the pandemic.
  • Yet we believe patience with the value style of investing is merited because when the economy revs up, the outlook for value stocks will brighten.
  • Front and center in the economy is COVID – the timing of medical breakthroughs will be the most influential driver of the market’s performance.
  • Regardless of that timing, we see solid prospects for both growth and value stocks as the economy slowly ramps back up toward a normal pace.

ELECTION UNCERTAINTY

  • As we head toward Election Day, the possibility of a contested result and drawn-out ballot-counting or litigation creates the potential for market volatility.
  • We believe any election-related volatility would be short-term.
  • The makeup of power in Washington could vary greatly depending on the outcome. Yet the longer-term impact on the markets historically is not all that different no matter which party controls each branch of government.
  • The speed and timing of any corporate or individual tax changes will be determined by not only the president but perhaps more importantly by the makeup of the Senate. No bold tax reform or other sweeping financial measures are likely unless the Democrats gain an overwhelming majority in Congress.
  • COVID-19 mitigation will presumably be a higher priority for either side.

OUTLOOK

The government’s economic “bridge” – support from both the Federal Reserve and Congress – is still under construction and may not yet be long enough. But we are confident it will be sufficient to connect to a better outlook in 2021.

You can find our full commentary here.

READ ALTAIR INSIGHT


Past performance is not indicative of future performance, and all investments are subject to the risk of loss. This material is for informational purposes only and should not be construed as an offer to sell or buy any security. Material contained in this communication should not be construed as accounting, legal, or tax advice. We encourage you to contact us with questions regarding the material shown.