As we entered Autumn, investment markets took some serious international threats in their stride. September proved the least positive month of the quarter as worries mounted, but economic data remained solid in most places, with the exception of the UK where cracks are beginning to appear.
Tax reform, or other stimulative policy, from the US has yet to appear but stocks are holding up well despite this. Earnings are solid across most sectors, but valuations provide very little margin for disappointment.
Investors’ appetite for risk seems to have held firm and they have increased their inputs into riskier investments, such as emerging markets where growth is very strong and inflation is under control. Interest rates rises are back on the horizon as far as developed markets are concerned but we remain cautious on how far these will go in the short term.