If Q2 was the valley of the 2020 economy, then Q3 was the beginning of the long, slow climb up to the mountaintop. Of course, the optimistic markets led the chargeback in the spring. From the economy’s perspective, the markets appear to be somewhere near the top and are waving their arms and cheering on the economy as it takes a slower, measured pace up the trail to recovery.

All markets were up for the quarter. We can see that US Large remains a significant contributor to the positive gains in the US. This is driven primarily by companies in the technology and consumer discretionary sectors. Emerging markets were the next top performer in Q3. Despite being just negative for the year, experts maintain a favorable outlook for Emerging Markets over the long run (10+ years). Low interest rates continue to impact income-producing bonds, but they were still positive for the previous quarter.

While we are seeing progress in employment rates, consumer spending, and home building to name a few, there is still much uncertainty ahead of us. In the short-term, we may see some market volatility around the US election. In the longer term, the effects of COVID-19 on the economy are still unknown and intertwined with the impact it is having on individuals and businesses around the globe.