Global Equities Rise as the Fed Remains on Hold

• In September, the FOMC decided to keep the federal funds rate unchanged, citing the need for further improvement in the labor market. While the committee remains constructive on the economy, the group reiterated that rate hikes will happen in a gradual manner given current economic conditions and global externalities. In a rare move, three FOMC Members officially dissented and subsequently voted to raise the federal funds target range by 0.25%.
• The quarter saw a ‘risk-on’ rally in U.S. equities, led by the following factors: high beta beating low beta, cyclicals cruising past defensives, small caps surpassing large caps, and growth gaining on value.
• In international markets, sterling devaluation continued to lift UK multi-nationals while accommodative monetary policy and a recovery in commodities pricing eased pressure on emerging markets.
• Investment grade and high yield spreads continued to tighten as investor demand remained strong. Outside of the U.S., the ECB continued monthly bond purchases of 80 billion euros and two European companies issued Investment Grade debt at negative yield to maturities. CCC-rated securities continued to rally over the quarter. In aggregate, the CCC universe has returned over 28% YTD.

To view the Third Quarter Reports, click on the links below: 

• 3Q16 Global Positioning Statement™
• 3Q16 Global Equity Review
• 3Q16 Taxable Fixed Income Review
• 3Q16 Tax Exempt Fixed Income Review
• 3Q16 Hedge Fund Review
• 3Q16 Real Assets Review
• 3Q16 Private Equity Review