3^rd Quarter Review: This week, we will publish our October Chart Pack, which looks back at the markets in the 3^rd quarter and discusses our outlook and current positioning.  Stocks bottomed shortly after the Brexit vote and rebounded nicely during the 3^rd quarter.  Non-US stocks improved, led by emerging markets, and high yield bonds added another strong quarter.  In the case of both emerging markets and high yield bonds, we believe 2016’s strong returns should be viewed in the context of the tough year they both experience in 2015.  While high yield has more than recovered its 2015 losses, emerging markets are still below January 2015 levels.  Both have been influenced by the commodity cycle and have been helped by the recovery in commodity prices this year.   

David Fuller's view

Historically, commodities have generally been cyclical outperformers in the latter stages of stock market cycles.  Brazil demonstrates this very clearly over the last two cycles, with this year’s strong rebound and also by advancing strongly in 2Q 2008, after the DJIA and other broadly diversified US indices peaked in 3Q 2007.   

Here is The Weekly View.