Market Flash Report | August 2020

Executive Summary

Economic

• The Federal Reserve updated its monetary policy framework, implying that it may allow inflation to run above it’s 2% target for an indefinite period of time.
• Economic activity improved in August, but unemployment remained relatively unchanged.
• Prospects for additional fiscal stimulus in the US weakened as Democrats and Republicans were unable to strike a deal before recess.

Equities

• Led by US equities, all major global equity indices posted strong, positive returns in August.
• The S&P 500 and Nasdaq indices hit all time highs.  The Dow Jones Industrial Average has reversed most of the losses from Q1.
• Growth stocks continue to outperform value stocks.
• Small cap stocks outperformed Large Cap stocks.

Fixed Income

• Global bond yields increased in August. The 10 Year US Treasury finished the month yielding 0.72%
• High quality credit underperformed lower quality credit.
• As the dollar weakened further, unhedged International Fixed Income outperformed its hedged counterpart.