Strong Quarter for Global Equities Amid Positive Economic Signals

Global equities posted another solid quarter of returns, driven by encouraging economic data and improving investor sentiment. The global economy continues to show signs of strength, with the U.S. leading the way in consumer confidence, rising business investment intentions, and strong corporate earnings—all key factors fueling the performance of global equities.

In Japan, equities experienced a strong quarter as the acceleration in global growth boosted exports to their highest levels in four years. Meanwhile, the Eurozone saw consumer confidence reach its highest point in over a decade, further supporting global equities in the region.

Amid this positive backdrop, central banks are signaling a gradual reduction in monetary policy support. The Federal Reserve is still expected to raise interest rates in December, and the European Central Bank (ECB) is preparing to scale back its quantitative easing program. These moves, while significant, are a response to improving economic fundamentals and not signs of weakness—another confidence boost for investors in global equities.

U.S. equity markets have enjoyed a steady upward trend throughout the year, with this quarter continuing that trajectory. Investors who stepped away in May or were concerned about geopolitical threats, such as tensions with North Korea, missed out on strong summer returns. The largest pullback for U.S. equities this year has been less than 3%, a testament to the resilience of global equities amid uncertainty.

This ongoing growth is supported by solid earnings and little indication of near-term recession risk. Additionally, new momentum around tax reform out of Washington is adding to investor optimism.

Despite ongoing political noise and headline risk, markets are choosing to focus on core economic drivers. While geopolitical concerns captured global attention, investors in global equities remained focused on rising corporate profits and the broadening strength of global growth.

Looking ahead to the fourth quarter, economic fundamentals appear favorable for continued gains in global equities. The gradual withdrawal of monetary stimulus in the U.S. and Europe is a reflection of this strength and has been well-communicated to the markets. As such, barring any unexpected shocks, the outlook for global equities remains positive as we close out the year.

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