Missed our Q3 Economic Outlook & Correlations webinar? Download materials here
Insights - Presentation
26 October 2020
Did you miss our Q3 Economic Oulook & Mastering the Dimensions of Correlations webinar? Download the presentation, videorecording, Correlations whitepaper and our Q3 Economic Outlook here. October 22 Ortec Finance’s Q3 Economic Outlook webinar took place. Find all the materials on this page.
Gain expert insights into future economic and financial market developments with our Q3 Economic Outlook. Get the latest news and an in-depth analysis of the key drivers of risk and return. Our quarterly outlooks are based on the Ortec Finance Economic Scenario Generator and offer our perspective on recent developments in the global economy and capital markets and what these mean for the future.
Q3 Economic Outlook highlights include:
Covid-19 and its containment measures led to a deep global recession. Currently, we are at a tipping point with a second wave of infections in Europe and the Middle East. Our baseline assumption is that the second wave can be brought under control and a second global lockdown can be avoided.
The macroeconomic environment deteriorated more than anticipated which worsened the contraction phase of the Ortec Finance Business Cycle Indicator. Nevertheless, the recession bottomed out. Supported by fiscal and monetary stimulus, the global economy began a U-shaped economic recovery which we expect to progress but to gradually lose pace.
In line with the recovery, financial markets rebounded further during the third quarter. Going forward, the Ortec Finance Momentum Indicator points to modestly positive momentum in financial markets.
The pandemic’s economic impact, however, remains highly uncertain. The major downside risk is a prolonged or stronger impact on economic activity. A second lockdown is not ruled out and may slow down the recovery.
As in June 2020, to serve our clients in the best possible manner in extraordinarily uncertain times, we provide a less cyclical version of our outlook in which the business cycle model is damped by 50% compared to our regular outlook.
Why stocks could be in the red this year and what to do about it
It hasn’t been since 2000 and 2001 that U.S. stock markets lost money in two consecutive years, but it’s something that could potentially happen again this year. Ortec’s modelling is pointing to negative equity returns over the next 12 months as the most likely market scenario. Pension funds with tactical or dynamic allocations at their disposal may want to temper their risk and consider fixed income instead.
Ortec Finance discusses with Responsible Investor on why high-quality climate data is essential for investors to map progress toward emission reduction goals and enable a successful transition to net-zero.
The Railways Pension Scheme is one of the UK’s largest and longest established pension funds. Our client case story highlights how we’ve enabled Railpen to take a holistic view of investments across multiple asset classes through our partnership with Burgiss.