Third Quarter 2020 Executive Summary:

  • With most asset classes having recovered from the intense volatility that occurred in financial markets at the onset of the COVID-19 virus, we see select opportunities in certain asset classes. We expect continued volatility and believe that active investment approaches should be able to find value.
  • We have moved to a small Overweight in Equities and Fixed Income, reduced our Underweight in Alternatives, and reduced our Overweight in Cash.
  • The global recovery continues to gather momentum. In most major economies, consumer traffic is now above pre COVID-19 levels. In addition, corporate sentiment is picking up globally.
  • COVID-19 still remains a significant risk to investors. While the number of new deaths in the U.S. reported per day has declined from its April highs, the number of new reported cases has been rising steadily. An effective vaccine has yet to be developed, but there has been optimism lately (reflected in the markets) about the results of some clinical trials.
  • The 2020 election also has the potential to create market risk. Joe Biden has pledged to reverse some of President Trump’s corporate tax cuts and President Trump is renewing antagonistic behavior towards China. The market may perceive both as risks, which can increase volatility.

Download Cornerstone’s Third Quarter 2020 Market Update and Outlook

Please join us on Tuesday August 4 at 11 am ET to join a panel discussion on our outlook in this uncertain environment. Chief Investment Officer Craig Metrick, CAIA, and Market Strategist Michael Geraghty will be joined by Larry Hatheway of Jackson Hole Economics. Larry will bring his 25+ years of experience as a strategist and economist, and now as leader of a “think/action tank”, Larry will share his insights. Register for our Market Outlook Webinar here.