Yield-curve flattening: a bad omen?
After equity markets saw one of their longest winning streaks for quite some time, a bit of pushback from nervous traders and investors was probably inevitable. As if our lead article of last week had jinxed markets into action – sure enough – this week saw the longest streak of falling global equities since March. Before we get ahead of ourselves here, we should point out that this ‘losing’ streak means consecutive days of declining market value and not the actual amount that markets have lost – the actual decline has been a modest 1-2% across most regions. Still, no good mood goes unspoilt for too long, it seems.
Q3 earnings wrap up: Europe and Japan shine
Now that 90% of companies have reported their Q3 earnings, we are in a good position to summarise the key highlights. Both profits (Earnings Per Share – EPS) and, importantly, top line sales growth printed better than expected, with Europe and Japan the clear standouts.
Economic and market cycles
Data and opinion often move in different directions. On the one hand, we continue to see (and forecast) solid upward trends in macro-economic data and corporate profits for most global regions. On the other, economists and market strategists are questioning the underlying data relative to the current trend – pointing markets in the other direction, or at least hinting that current trends are not sustainable.
In our article on earnings, we mentioned talk about so-called value traps in relation to industrial powerhouse General Electric (GE). The term ‘value trap’ is one that seems to have been forgotten in recent years, but GE’s troubles above have sparked our collective memories.
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