The third quarter for equity markets was similar to the two quarters
that preceded it in 2016 – a long stretch of relative calm interrupted
by brief bouts of volatility.
There’s the tendency for forecasts to be overly optimistic when it comes
to market performance and that of the underlying economy.
We can expect markets to remain on edge as investors feverishly work to
decode every Fed utterance for clues on its intentions.
Value stocks offer opportunities with more attractive relative
valuations, which stand to outperform in a rising-rate environment.
EMs have benefited from the Fed’s hesitancy to move on rates because
this is keeping a lid on the U.S. dollar.