October saw a pause in the strong rally across equities as investors shifted focus to key November events: the U.S. Presidential Election and the Federal Reserve's interest rate decision.
Despite the lull in markets, the macroeconomic environment remained robust, driven by:
- Positive economic indicators: A strong U.S. jobs report early in the month, better-than-expected Chinese GDP growth, and surprising U.S. retail sales data.
- Cooling inflation: Both Canadian and UK inflation figures came in below estimates, alleviating some concerns.
- Corporate strength: U.S. Q3 earnings showed resilience, with S&P 500 companies reporting sales growth of +5.1% and earnings growth of +7.8%.
This combination of strong fundamentals and corporate performance created a supportive backdrop for risk assets going forward.
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