September 2020

Prepared by Karen E. Rushing, Clerk of the Circuit Court and County Comptroller

Summary of Investment Strategy: At its September meeting, the Federal Reserve reiterated its plea for another round of stimulus spending from the Federal Government to stave off a drop in economic momentum. Democrats and Republicans have yet to find the common ground necessary to agree to any additional spending. Despite the fact that employment levels have improved, the recovery appears to have already lost some upward momentum in recent weeks as the first stimulus package runs out. Growth in retail spending has declined recently and consumer confidence has weakened. Federal Reserve officials hope that their new stance on inflation combined with more aggressive action on the fiscal side will deliver faster inflation gains. Something the Fed has struggled to achieve in the past.

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ISM Manufacturing came in at 56.0 in August, above expectations of 54.8.

Non-Farm Payrolls rose by 1.37 million in August which was slightly better than expectations of a 1.35 million increase.

Average hourly earnings were up 4.7% in August. This was better than expectations of a 4.5% increase.

Producer prices ex-food and energy, year over year rose 0.6% in August which was better than expectations of a 0.3% increase.

➢ Retail sales ex auto and gas rose 0.7% in August which was below expectations of a 0.9% increase.

Existing home sales rose by 2.4% in August. This was in line with expectations.

ISM Services Index was slightly below expectations in August, coming in at 56.9 versus expectations of 57.

The Federal Reserve pledged to support the economic recovery by setting a higher bar to raise interest rates and signaling the economy wouldn't likely to unend its projections for at least three more years.

Deaths in the U.S. attributed to the Coronavirus neared 200,000 amid worries that the country was heading for another wave of infections.

U.S. consumers increased retail spending in August for the fourth straight month but at a slower pace than earlier in the summer.

The mortgage market recorded its best quarter in years this spring, reflecting how the housing market is booming even as much of the economy stumbles.

Fed Chairman Powell said the economic response to the pandemic alleviated the fallout but suggested Congress would likely need to spend more.

PORTFOLIO COMPOSIIO

1.90 1.84 0.49 0.28 0.19 0.13 0.09