Market Update November 2020

November 2020

This month, Alexandra and Paul held the market update live along with Q&A for Willow clients. In case you missed it, you can watch the replay. In this video for Willow clients, Alexandra and Paul share highlights, analysis and outlook of market risk indicators and economic conditions as well as our leading themes that influence our investment strategy. 

Market Update Summary (November 2020):

    • Our proprietary algorithm looking at 14 points volatility are pointing to a low expectation that markets will be unstable. Risk levels are generally slightly elevated, but the trend is going in the right way and measures point to a relatively settled market for the next 30 days.
    • We love watching bond spreads because they don’t lie. We’re seeing a good trend here pointing in the direction of less risk in the market, coming down significantly since February.
    • Another leading indicator we watch, credit default swaps, is also trending in a good direction.
    • Consumer health data is showing a remarkable recovery. It’s possible this data shows a recovered consumer because lower-income buyers, who have been disproportionately affected by the pandemic, are not reflected strongly in consumer buying habits like home buying, etc.
    • The manufacturing sector has rebounded well from earlier this year.
    • The US market still looks exceptionally stronger than the rest of the global market, especially Europe and Emerging Markets. It is the US tech sector that continues to keep US markets high. We don’t see this changing anytime soon, although we are making selective, strategic purchases in the global market.
    • Value stocks tend to do well with a Democratic president, and we did see a bounce in energy and finance sectors once the election results were announced. Those are the only sectors in the value camp that have made our watch list. Growth stocks are still outperforming values stocks because of the tech sector. We are seeing some patterns in growth vs value stock performance looking a lot like the 90s.

So in light of these assessments, we continue to diligently track current market conditions and future economic outlooks so we can position our clients as strategically as possible.

We wish everyone a holiday season of peace and gratitude.

To set up a meeting to discuss your portfolio, please click here or give us a call.

Best regards,

The Willow Team
+1 413 236 2980