Quarterly markets review - Q3 2017
A review of equity and bond markets in Q3 2017, when global economic data remained upbeat and the Federal Reserve said it would start to reduce its balance sheet.
- Global equities posted a quarter of solid gains in Q3. Economic growth stayed in something of a “Goldilocks” zone overall, with stable expansion and benign inflation backed by positive earnings releases.
- The S&P 500 rose over the quarter amid some supportive macroeconomic data, a robust quarterly reporting season and further weakness in the US dollar.
- Eurozone equities advanced against a backdrop of positive economic data. The possibility that the European Central Bank (ECB) could soon reduce its stimulus measures continued to be a focus for the market.
- The UK’s FTSE All-Share index also rose, led by the resources sectors as both industrial metal and crude oil prices recovered.
- Japanese equities also posted gains amid improving economic data. Politics took the headlines as Prime Minister Abe called an election to be held in October.
- Emerging markets outperformed. Brazil was the strongest index market amid some reform progress, coupled with a reduced prospect of a return for the leftist Workers Party in the 2018 elections.
- Bond yields were little changed over the quarter, reflecting a largely unchanged global economic backdrop. Corporate bonds made positive returns, outperforming government bonds.