Investment Review – October 2020

October 14, 2020 Investment Review

  1. U.S. stocks lost ground in September. The S&P 500 was down -3.8%, the Nasdaq fell -5.1%, and the Down Jones Industrial average dropped -2.2%. Large cap technology stocks were the hardest hit in the decline, losing -5.4%.

  2. Technology stocks have outperformed in 2020, benefiting from business models that have escaped pandemic disruption and record low interest rates. Prior to the September sell-off, the technology sector had outperformed the S&P 500 by 36.0% vs. 9.7% year to date through August 31. September’s price action reflects a normalization of technology stock valuations, which should be constructive for the continuation of the current bull market.

  3. Companies are set to report Q3 earnings in the coming weeks, with analysts expecting a -21% year-over-year decline in the quarter. This is positive compared to Q2, when S&P earnings fell -32% compared to the prior year. Analysts now anticipate an earnings decline of -19% for all of 2020.

Sources: Bloomberg LLC, FactSet, U.S. Commerce Department, Bloomberg Businessweek, IHS iSuppli

Disclosure: This commentary reflects the opinions of Welch & Forbes based on information that we believe to be reliable. It is intended for informational purposes only, and not to suggest any specific performance or results, nor should it be considered investment, financial, tax or other professional advice. It is not an offer or solicitation.


If you would like to receive your copy of the Economic Outlook and Investment Review monthly in the mail, call Ed Sullivan, Vice President, at 617-557-9800, or email him at esullivan@welchforbes.com.

Make sure to bookmark our Perspectives webpage so you can stay up to date with the most recent weekly Welch & Forbes insights, announcements, and content. To receive our monthly email digest, simply enter your email address in the banner on this page.


Access your complimentary Wealth Planning Suite


wealth planning suite

Includes your Initial Consultation Portfolio X-Ray© Estate Plan Review Financial Plan

  • This field is for validation purposes and should be left unchanged.



*There is no fee for the Initial Consultation or Portfolio X-Ray© for prospective clients. Portfolio X-Ray© is a Morningstar product that Welch & Forbes maintains a license for its use. The Estate Plan Review and Financial Plan are provided only to clients.