In this latest edition of our monthly report:
The loneliness of contrary opinion
- It’s hard to stay on course;
- The pressure of being judged on a calendar-year basis; and
- Remain vigilant in the face of great “certaines”.
Assessment of the economic situation
No recession (yet) in sight in the US, while in Europe it seems inevitable. Energy prices up sharply, as OPEC’s reduced quotas (finally) take effect. The US 10-year Treasury yield is back to 2007 levels.
- US economy booms in Q3, despite the Fed;
- Oil unaffected by Middle East tensions; and
- The market (sll) fears the Fed, not the ECB.
Financial markets during the month
All equity markets ended October down, while US bond yields connued to rise. Tensions in the Middle East dominate the news, and gold rallies strongly.
- Third consecutive month of declines for equies;
- US 10-year Treasury yield reaches 5%.; and
- Precious metals and currencies.
Comments on investment decisions
The monetary ghtening cycle is nearing its end, but easing is not yet on the cards. The Middle East conflict is making markets nervous, while long bond yields are near record highs. Equity markets are in a phase of risk aversion, but on the other hand seem ripe for a rebound.
- Precious metals, listed real estate (REIT); and
- Equity performances, and
- Performance of bonds, currencies and commodities.
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