Global Equities Deliver Best Quarter Since 2020

Global markets posted their best quarter since the COVID rebound in 2020 as investors cheered an improving inflation backdrop. While U.S. and European central banks held rates steady during the quarter, given easing inflationary pressures, market expectations for rate cuts in 2024 rose, driving developed market bond yields significantly lower. Falling yields supported a strong rally in global bonds and long duration equities.

Economic growth remained resilient in the U.S. with a better than expected third-quarter GDP report showing 4.9% annualized real growth, driven by strong consumption, which raised expectations for a “soft landing.” The economic backdrop was more muted in other developed markets, however, with GDP declining 0.5% and 2.9% on an annualized basis (quarter-to-quarter) in the Eurozone and Japan, respectively, as weak consumption and business spending weighed on economic activity. In contrast, growth was better than expected in Mexico and Brazil, where falling inflation also supported expectations for further rate cuts.

The commentary is the opinion of SGA. This material has been prepared using sources of information generally believed to be reliable; however, its accuracy is not guaranteed. Opinions represented are subject to change and should not be considered investment advice or an offer of securities.

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Past performance is not indicative of future results.

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