2020 has been a year of records, both record losses and record gains. After a brutal spring, markets and the economy have mostly rebounded in the summer and fall. We take a closer look at October 26’s record gross domestic product (GDP) report, which may have implications for the upcoming presidential election. 

 

Record Growth in The Third Quarter

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The outbreak of COVID-19 and the subsequent lockdowns triggered the largest quarter-over-quarter decline in GDP since WWII, so perhaps it comes as no surprise that the following quarter tallied the sharpest rebound in that same time period. GDP grew 33.1% annualized in th

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Index Performance

 

 

 

 

 

US and International Equities

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The major market indices, as denoted by the S&P 500 and Nasdaq, gave back ground again in October with almost all sectors finishing in the red. For the second consecutive month the utilities sector was the only one in the green. The sectors down the most for the month were information technology, which was down over 5%, energy, health care, and real estate.

 

International equities were a mixed bag. Emerging markets stocks, as denoted by MSCI Emerging Markets (EM), finished higher. However, developed market equi

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The Federal Reserve’s (Fed) Beige Book presented qualitative data that suggested the pace of the economic recovery had been tapering, as we discussed in the LPL Research blog, Beige Book Shows Pace of Recovery is Moderating, but now we have quantitative data that is confirming the survey data. The Conference Board’s Leading Economic Index (LEI) increased 0.7% month over month in September to beat Bloomberg consensus expectations of 0.6%, but slowed after rising 1.4% in August and 2% in July.

 

As shown in the LPL Chart of the Day, the leading indicators are still growing, but at a slower rate than the blistering pace se

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We have seen a historic rebound in economic growth since the US economy emerged from lockdowns, but the pace of the economic rebound has tapered in recent weeks as the effects of fiscal stimulus fade. The recently released Federal Reserve (Fed) Beige Book appears to show that economic activity has become more segmented, with changes in activity varying greatly by sector—consistent with what we’ve seen from manufacturing and services data.

 

In the Beige Book, the Fed presents qualitative observations made by community bankers and business owners—or “Main Street”—about economic (housing, labor mar

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