The leaves are beginning to turn, the birds are headed south, and the evenings are getting a bit cooler. This fall is especially welcome with the rains bringing some control to the fires that have done so much damage. We’re happy to think of the end of this incredibly challenging fire season.
The markets have held up well over this quarter, even after the latest modest pullback. Perhaps the uncertainties caused by the virus and its related economic toll have dwarfed concerns around the upcoming presidential election. We need to remember that the presidency, as powerful a position as it is, has very little to do with the economy as a whole. Congress can push the needle with fiscal policies, but even then, it’s what they don’t do that often makes the difference. It is consumers that make a difference in the broad economic trajectory.
The Heroes of 2020
Fortunately, Congress acted fairly swiftly to pass legislation that helped keep families afloat, and many businesses solvent as we’ve worked our way through the devastation caused by the economic shutdown. The various branches of the Federal government, states and municipalities, have accomplished a lot in this short, tumultuous time. That said, we think the real heroes of the fight against the virus and the ongoing struggles with our wildfires can be found all around us. The frontline workers in the hospitals, food banks, grocery stores; those on the fire lines have made all the difference. Add to them millions of families who tightened their belts to give to relief efforts, opened their homes to strangers in need, and selflessly gave their time and energy to help people all over the country. Heroes are all around us, and it makes us proud and grateful to see our communities rise to the challenge.
The Markets and The Economy
Risk assets like stocks, real estate, and commodities have had a pretty good quarter, while bonds managed to hold their own. The modest decline in prices throughout September bled off some of the over-enthusiasm built up in markets. The largest sector effected was technology. We all felt that markets had gotten a bit carried away by the end of August, so this selling helped bring valuations closer to reasonable expectations.
Economic progress, in general, has continued to be supportive of the largely optimistic markets. Unemployment, while still very high, is lower than forecasted. This is true, even while new claims remain elevated. We’ve been coasting for some time on the fiscal programs passed early in the pandemic, the Cares Act in particular, and the Fed has continued to be supportive in various ways. Talks continue regarding further fiscal stimulus. The goal is to find mutually agreeable ways to support individuals, businesses, schools, and governments to remain afloat during the continued uncertainty.
As investors, it is essential to remember that markets are forward-looking and dislike uncertainty. Continued progress in containing the pandemic will help to set the stage for a more optimistic economic future. This long-term optimism is responsible for the seemingly irrational exuberance of the markets since correction in late March. It will be instrumental in guiding market participants as we look to the future. That said, as long as economic and election concerns remain at the forefront, you can expect the volatility to continue.
As we get closer to the election, it is difficult to avoid the depression that comes with listening to the candidates and their followers relentlessly attack each other. Sure, there are problems and some severe issues to deal with – there always are. But, since 1776, our nation has been a triumph for optimists. Our Union has held through the toughest of times, and we have the freest nation on earth. On the eve of this election, we remain bullish on America, willing to believe that the next century will be as great as the last. We have the right to vote, the right to assemble, and the right to run for office. These freedoms of democracy are something many people in the world can only dream of.
The US Census Bureau reports that in the 2016 presidential election, only 61.8% of eligible voters voted. So please, whatever your political views, exercise your democratic right and vote.
“Someone struggled for your right to vote. Use it.” – Susan B. Anthony
- We’re proud to again co-sponsor and co-host Women’s Worth on October 20, 2020, 11:30 am – 1:00 pm. To register and learn more, please visit www.womensworth.net
- Please note our upcoming office closures:
- November 26 – 27th | Thanksgiving
- December 24 – 25th | Christmas