Skip to main content

You are here

Blog Listing Page

Q3 Global Market Returns: US large caps lead the way

Our latest report of asset returns highlights two main themes in third-quarter performance: the global rotation into large cap and a swing to more defensive stocks.

US risk assets continued to fare well over the quarter. US equities led developed markets in both Q3 and year to date (see chart), propelled by above-trend economic growth, robust corporate earnings and weakening US dollar momentum. US equities also benefited from the perception that the US may be less vulnerable to potential trade disruptions than other major economies. The UK continued to lag amid growing Brexit uncertainties.  

Emerging markets also underperformed in both periods, although receding trade worries and a weaker dollar in September helped trim losses by quarter end.

Equity market “winners and losers” in Q3 and YTD

Source: FTSE Russell and Thomson Reuters. All data as of September 30, 2018. Past Performance is no guarantee of future results.

 

Large-caps stocks outperformed small caps globally, marking a notable reversal for most regions from the trend earlier in the year.

Source: FTSE Russell and Thomson Reuters. All data as of September 30, 2018. Past Performance is no guarantee of future results.

In another sign indicating waning risk appetite, cyclicals lost momentum to defensives in the last three months, especially in the US (see chart). Health care stocks, favored for their lower volatility and greater earnings stability, outperforming across most regions.

Source: FTSE Russell and Thomson Reuters. All data as of September 30, 2018. Past Performance is no guarantee of future results.

Fixed income and commodities

Government bond prices fell globally, as the 10-year US Treasury yield eclipsed 3% on the back of strong US data and diminishing trade and emerging-market contagion worries. High-yield bonds outperformed investment grade bonds.

Trade and China-growth jitters pushed commodities lower in Q3. Oil was the notable exception, as solid demand and tighter supply amid lower Iranian oil exports buoyed prices.

Currency

The US dollar’s ascent lost momentum as Q3 progressed, most notably versus the euro and sterling, although it remained strong against the yen and Chinese yuan. Hard-hit EM currencies stabilized in September after steep declines since March; the strong Mexican peso was the outlier, rising 5.3% versus the dollar. The Turkish lira lost 24.3 %

 

Source: FTSE Russell and Thomson Reuters. All data as of September 30, 2018. Past Performance is no guarantee of future results.

Access our research reports. Or watch Philip Lawlor outline the main points in a short video.

 

---------------

© 2018 London Stock Exchange Group plc and its applicable group undertakings (the “LSE Group”). The LSE Group includes (1) FTSE International Limited (“FTSE”), (2) Frank Russell Company (“Russell”), (3) FTSE Global Debt Capital Markets Inc. and FTSE Global Debt Capital Markets Limited (together, “FTSE GDCM”), (4) MTSNext Limited (“MTSNext”), (5) Mergent, Inc. (“Mergent”), (6) FTSE Fixed Income LLC (“FTSE FI”) and (7) The Yield Book Inc (“YB”). All rights reserved.

FTSE Russell® is a trading name of FTSE, Russell, FTSE GDCM, MTS Next Limited, Mergent, FTSE FI and YB. “FTSE®”, “Russell®”, “FTSE Russell®”, “MTS®”, “FTSE4Good®”, “ICB®”, “Mergent®”, “WorldBIG®”, “USBIG®”, “EuroBIG®”, “AusBIG®”, “The Yield Book®”,  and all other trademarks and service marks used herein (whether registered or unregistered) are trademarks and/or service marks owned or licensed by the applicable member of the LSE Group or their respective licensors and are owned, or used under licence, by FTSE, Russell, MTSNext, FTSE GDCM, Mergent,  FTSE FI or YB. FTSE International Limited is authorised and regulated by the Financial Conduct Authority as a benchmark administrator.

All information is provided for information purposes only. All information and data contained in this publication is obtained by the LSE Group, from sources believed by it to be accurate and reliable. Because of the possibility of human and mechanical error as well as other factors, however, such information and data is provided "as is" without warranty of any kind. No member of the LSE Group nor their respective directors, officers, employees, partners or licensors make any claim, prediction, warranty or representation whatsoever, expressly or impliedly, either as to the accuracy, timeliness, completeness, merchantability of any information or of results to be obtained from the use of the FTSE Russell Indexes or the fitness or suitability of the FTSE Russell Indexes for any particular purpose to which they might be put. Any representation of historical data accessible through FTSE Russell Indexes is provided for information purposes only and is not a reliable indicator of future performance.

No responsibility or liability can be accepted by any member of the LSE Group nor their respective directors, officers, employees, partners or licensors for (a) any loss or damage in whole or in part caused by, resulting from, or relating to any error (negligent or otherwise) or other circumstance involved in procuring, collecting, compiling, interpreting, analysing, editing, transcribing, transmitting, communicating or delivering any such information or data or from use of this document or links to this document or (b) any direct, indirect, special, consequential or incidental damages whatsoever, even if any member of the LSE Group is advised in advance of the possibility of such damages, resulting from the use of, or inability to use, such information.

No member of the LSE Group nor their respective directors, officers, employees, partners or licensors provide investment advice and nothing contained in this document or accessible through FTSE Russell Indexes, including statistical data and industry reports, should be taken as constituting financial or investment advice or a financial promotion. 

No part of this information may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without prior written permission of the applicable member of the LSE Group. Use and distribution of the LSE Group data requires a licence from FTSE, Russell, FTSE GDCM, MTSNext, Mergent, FTSE FI, YB and/or their respective licensors.

Blog Listing Page