3rd Quarter 2020 Outlook & Overview

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At the start of the 2nd Quarter, Oakworth’s Investment Committee made a number of predictions for the quarter. Here are a few of them:

  • Analysts and investors will have a hard time putting a comfortable valuation on the markets because the economic downturn has been so swift and so complete.
  • Although they will be nerve wracking at times, the markets probably won’t experience the same level of panic selling they did during the 1st Quarter.
  • A new normal will emerge in the economy with more businesses shifting towards things like flextime and remote work environments for their workers.
  • The potent combination of monetary and fiscal policy stimuli coupled with low consumer borrowing rates and energy prices will help fuel an economic recovery in the second half of the year.
  • The markets will rally, and should make up much, if not all, they lost during the first part of the year.

All of these are directionally correct. It is impossible to correctly value a market where there are few earnings and even less guidance. While there were a few nail-biting days over the last several months, the markets didn’t revisit the 1st Quarter’s panic level

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