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Integrated Insights -- Week of September 14, 2020

Integrated Insights -- Week of September 14, 2020

September 15, 2020

After the volatility of recent weeks, investment markets took a breather in the holiday shortened week last week. Washington leadership continues to dither on a new stimulus package with both parties far apart on potential agreement.  This has left many with unemployment benefits and thus income. Two leading companies n the financial sector announced small reductions in force this week adding to the lull experienced by any recent resurgence in the economy. The good news is that recent virus trends point to a lower infection rate in the more populated parts of the country--obviously we've seen this can change quickly.

Here's what we are reading this week:

Weekly Commentary -- Why we stay moderately pro-risk -- BlackRock

  • The improving macro backdrop, a strong risk rally and rising volatility have encouraged management to be moderately pro-risk over coming months, with a preference for credit.

  • The outcome of negotiations of a new U.S. fiscal package looks increasingly binary: a sizable fiscal package or nothing at all before the November election.

  • Markets will watch for any details of the Federal Reserve’s new average inflation targeting framework as the central bank holds its policy meeting this week.

Quality Growth: Resilient businesses in a low-rate world -- Capital Group

Investment managers at Capital Group favor "quality" growth companies in the current environment. This is a part of the active security selection process to try to dampen volatility. But what does "quality" mean? While there is no perfect screen or set of rules that can embody all aspects of Quality Growth, they are finding that these companies typically share the following ingredients:

  • Led by strong management teams
  • Maintain solid balance sheets
  • Operate in a growing market
  • Exhibit the potential to increase market share and maintain pricing power

And there is good reason for hunting for quality:

Election 2020 Analysis -- Cetera Investment Management

Cetera Investment Management provide a broad analysis of the possible implications for the election. This provides a nice summer of the Presidential, House, & Senate races, as well as possible influences on sectors of the US economy.