Dear Clients,

The leaves are changing colors, pumpkin spice flavor abounds, and we continue to be blessed by sunny days here in Portland. We hope that this Fall season brings new hope to us all as we move towards the holidays and the end of 2020.

Market Update: Stock markets around the world continued their rebound from earlier this year, despite struggling in the final month of the third quarter. It seems as if the mostly-positive economic news from August gave way to mixed news during the third quarter. Despite September’s retreat, Wall Street was generally optimistic as the economy gradually reopened for business.

The S&P 500 ended the third quarter of 2020 up 8.5%, although it should be noted that most of the growth in the S&P 500 has been due to the influence of five stocks. As of the end of September, 24% of the S&P 500 index was comprised of only five companies: Apple, Microsoft, Amazon, Google, and Facebook. The other 495 stocks represent the remaining 76%. A few companies dominating the S&P 500 isn’t new, but the concentration is more extreme. Over the last 25 years, the five largest stocks represented about 13% of the index on average.

Notable Notes:

• A Good Quarter Overall – Among the S&P 500, 70% of stocks had gains in the third quarter.
• Housing Stays Hot – Sales were up 10.5% from a year ago.
• Home Prices Skyrocket – the median existing-home price for all housing types was up 11.4% from August 2019.
• Retail Sales Rebound – retail sales have been leading the 2020 recovery, and since June have exceeded February’s pre-COVID levels.
• U.S. Manufacturing Expands – upturn in new orders as exports grow.
• Economic Stimulus – on October 6th, Federal Reserve Chairman Jerome Powell said that aggressive fiscal and monetary stimulus is needed for an economic recovery that he said still has “a long way to go.”
• Interest Rates – Earlier this month, the Federal Reserve voted to keep short-term rates targeted at 0%-0.25%, where they have been for the last six months, and indicated they would remain there until inflation rises consistently.
  Below, we’ve included an in-depth market report. We’ve also included an article discussing how past elections have impacted markets. And finally, there’s a link to a local pumpkin patch that is open and ready to help your family create some new memories.

We look forward to being on the other side of this with you,

The IFS Team