Q3 Markets Update: A Cross-Asset Bear Market

IN THIS PUBLICATION:

• YTD performance for bonds has been all-time bad, and third worst for stocks since 1950.
• Bond yields have broken the four decades long channel – the implications of this can’t be overstated.
• Equity markets are no longer at ‘bubble’ valuations, but there is still plenty of room for the downside.

Year-to-Date Recap

Q3 is in the books in what has been, so far, a pretty historic year (mostly for negative reasons except for seeing Tim finally throwing away a hideous pair of shoes he brought to Europe that my mother quite seriously rated a 0/10 - picture included at the end of this Update...).

Price action has been bad across asset classes, with both bonds and equities deep in the red for the year (with total losses equivalent to 40% of global GDP), which obviously doesn’t bode well for all of those 60/40 portfolio strategies out there.

BONDS