Global securities markets took a step back in October, as equity markets weighed the potential investment implications of a tight (and contentious) presidential race in the U.S. Bond markets, too, sold-off given continued rhetoric from the Federal Reserve all-but-stating that economic data is supportive of a possible interest rate hike in December. Financials were the lone bright spot during the month given that banks benefit directly from higher interest rates; healthcare stocks lost nearly 7% as policymakers mulled regulation to address recent drug price inflation. A steepening yield curve provided a headwind for bonds, compelling investors to sell corporate bond funds and other “bond surrogates” such as MLPs and REITs.
- Corporations in the U.S. are on track to post quarterly profits in Q3; to date, 73% of S&P 500 constituents have reported a YOY gain of 1.6%; while below long-term averages, Q3 earnings are noteworthy given that the S&P has posted a loss in each of the last 5 quarters

- The U.S. economy expanded by 2.9% in Q3, its highest GDP growth rate in two years; much of the growth is attributed to inventory build-up and an increase in exports, the latter of which has benefitted from a weaker U.S. dollar

-Inflationary pressures continue to mount in the U.S., with the most recent sign of positive inflation coming from the BLS, which reported that wages grew at 2.8% YOY in October, the fastest growth since 2009

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