Risks Remain on the Road to Recovery

Overview Risk and uncertainty remain in the near-term, but improving economic data helps support the risk rally. We are cautiously optimistic in our outlook on the equity markets, and are becoming increasingly confident that investors can selectively look towards exposures in more cyclical segments of the stock market. We also believe, however, that portfolios may be best served striking a balance with protection (defensive, quality, low correlation, etc.) along with participation. June provided one of the single best months for growth performance relative to value since the Great Financial Crisis, and the spread between two closely followed equity styles is one of many performance spreads we continue to watch throughout 2020. Divergences remains a key theme for investors to pay attention to. 2Q earnings season and the upcoming U.S. elections will add to the uncertainty on the road to recovery.