Equities recovered some ground in October, as the bulk of the Q3 earnings season took place, and generally showing resilience. Unlike government bonds, it was a greater month for corporates, while upside surprise in CPIs again reinforced a hawkish response by Central Banks.
However, economic data is being mixed, with most industrial data looking set to weaken further during the coming quarters. The European Central Bank raised interest rates by 75 bps and acknowledged that the eurozone may be heading for recession.
That's maybe what Markets took as a sign of lowering the pace of rate increase. As we have discussed in several reports, the extent to which interest rates have risen is what has a disproportionate effect on long duration assets such as Quality Growth. However, despite some of our companies have seen negative earnings revisions, we have not seen factors that relate to a change in a structural growth driver or long-term prospects.