Market Comment Q3 2019

Global equity markets have been strong over the first three quarters of 2019, with the Federal Reserve and other central banks easing policy in a coordinated fashion, and solid macroeconomic data in the USA.

The main theme this year has been robust growth in the USA with weakness in Europe and especially emerging markets, fuelled by worries over the ongoing USA-China trade dispute. Equity valuations of many leading companies remain reasonable, with low bond yields offering poor competition to dividend yields. However risks related to a slowdown in US economic growth, Brexit, and socialist candidates for the 2020 US elections persist. As the saying goes, “bull markets climb a wall of worry”; we focus on capturing the long run outperformance of stocks by remaining invested, despite adopting a somewhat more defensive stance tactically.