Market Watch Weekly | September 25th, 2020 | Trumped Up Trickle Down Economics
Erik Dekker - Sep 25, 2020
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We think the combination of a sustained-but-gradual economic expansion, rebound in corporate profits, and an ongoing monetary policy stimulus – though not immune to presidential policies – will set the broader course for the markets.
North American benchmarks were once again mixed as the market continues to consolidate in September. Fresh economic readings, politics and the latest round of Federal Reserve testimony were all on stage this week, highlighting key market matchups that will shape the investment landscape as we advance into the last quarter of 2020 (is it over yet?!).
We think the new bull market will have more staying power than the recent tech selloff would indicate. That said, we do not think this short-term dip has set the market up to resume the rapid trajectory of the past five months. Given technology's hefty gains and extended (but not bubble) valuations, alongside the industry's compelling growth outlook, we think tech shares may continue to be a leader in both the rallies and the dips ahead.
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