Why today's Philly Fed report is not as strong as it seems
Today's figures from the Philadelphia Federal Reserve appear bullish at first glance, but a closer examination reveals some mixed signals amidst a decidedly end-of-cycle overall tone.
Head of Equity Strategy, Saxo Bank Group
Summary: Last month was brutal for equities with leading indices suffering big losses. But while a gentle recovery now beckons, major risks are looming on the horizon.
The market clearly went on a hunt for Red October last month with equities down 7.3% having been down by as much as 9.5% on October 29. This makes it the worst month for global equities since May 2012. Risk parity funds also had an ugly October with AQR's risk parity fund down 4.9% as fixed income did not provide shelter for the havoc in equities; the fund is down 6% year-to-date which will end up making 2018 one of the worst asset allocation years since WWII. What can we expect from here? Is this the beginning of a major decline in global equities?