There are over 30 million COVID-19 cases worldwide, tripling the number recorded by the end of Q2 2020. Since wide-ranging lockdown measures so far have failed to materialize, investors have been largely unimpressed by these latest virus developments.

At its annual Jackson Hole meeting in August, Fed chair Powell introduced a new monetary framework called “average inflation targeting,” which allows underlying inflation measures to overshoot the well-known inflation target of 2.0% temporarily.

The virus and its sudden and devastating effects on the US real economy – with still more than 10 million citizens out of a job – forced US President Trump’s re-election efforts to break new grounds in the last couple of months.

High-frequency data, such as travel and navigation app usage, point to continued global growth during the third quarter of 2020, albeit at a more moderate pace than back in May or June.

In such an environment, we still favor an up-in-quality approach across both stocks and bonds, along with a focus on valuations relative to underlying fundamentals.