A review of global markets and portfolio positioning in October

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Multi-Asset Solutions Weekly Strategy Report

• October finished as the worst month for global equities since 2012, with all major markets closing lower over the month. Investors grew more concerned that corporate earnings had peaked for the cycle, while ongoing geopolitical risks continued to dampen investor sentiment.
• The underlying international economic environment outlook weakened marginally, particularly outside the U.S., but not by enough to justify the equity sell-off given a still healthy pace of global growth.
• Sovereign bonds did not provide a hedge against the equity moves. Yields remained well supported as central banks did not waver in their plans for policy tightening.
• We have continued to moderate our pro-risk bias; while the pace of global growth has slowed, it is still healthy. We maintain a small equity overweight in the U.S., reflecting our view that an imminent recession seems unlikely. We have also leaned into U.S. duration following the recent rise in yields.