Yorkville Asset Management

Markets continued to march higher in September, thanks in large part to the US Federal Reserve's somewhat surprise announcement of a 50 basis point rate cut during the month. While markets were pricing in a chance of this larger cut, the news nonetheless was a catalyst to drive equity markets higher and end the month firmly in positive territory. We also saw China step in and provide some respite for their struggling economy by also cutting rates by 50 basis points and reducing bank reserve requirements. This ignited a strong multi-day rally in Chinese equity markets that trickled into the broader global markets, albeit much more modestly, during the latter part of September.

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August introduced some more significant volatility to markets that hadn’t been seen recently, with asset prices whipsawing from steep drops at the beginning of August to modest gains by the end of the month. Early volatility was driven by a weak US jobs report increasing the likelihood of larger rate cuts and an unwinding of the Yen carry trade, which involved large market participants selling to cover short-term losses. The Bank of Japan stepped in quickly to reassure markets that they would not raise rates during market volatility, reversing some of the losses from the prior days. As markets normalized, we saw a slow recovery in major market indices for the remainder of August. Over the latter part of the month, additional economic data came in more positive and provided further relief to market participants. CLICK HERE