Weekly market review (End of Q3)

Market Update

Starting with the US; last week figures were released saying the economy expanded at an annual rate of 3.9% rather the 3.7% in Q2. This is due to strong consumer spending business investment and residential construction. Recent data in the US shows that new home sales surged to the highest levels since 2008. US Manufacturing remains at a two year low and the US business investment fell slightly.

In Europe Volkswagen admitted manipulated emission tests for diesel cars in the US, which then lead to a sharp decline in the stock price and resignation of their CEO. VW has reserved 6.5B Euro’s to cover the cost of recalling cars.

In China manufacturing performance fell to its lowest level since 2009. However Prime Minister Xi Jinping expressed that the country was capable of maintaining relatively high growth for a long time. He has also pledged to implement monetary reforms to boost exports.

Core consumer prices in Japan declined 0.1% from 1 year ago, which is the first annual fall since April 2013.

Markets were generally down last week which many analysts are calling a correction during a bull market. Generally views are positive on US and European Equities. Cyclical commodities such as Industrial metals and energy have been hit hard and however future supply is expected to shrink which should create balance. Developed market debt seems to be improving yet emerging market debt continues to deteriorate.

It is certainly fair to say that attention is needed when selecting assets at the moment. Contact [email protected] for personalized advice.