Healthy corporate earnings and lower unemployment levels supported higher global equity markets in the third quarter. Markets were generally positive with only a few exceptions for both the quarter and year to date. A weakening U.S. dollar (USD) further translated the MSCI World Index return of 3.94% in local currency terms to 4.84% in USD terms for the third quarter and 12.51% local currency returns into 16.01% in USD terms on the year to date basis. European countries were generally the top performing countries, advancing on the positive economic data. A central theme has been the markets’ warm reception of defined paths towards more restrictive monetary policy, especially in the U.S., the E.U. and Canada. Looking forward, a combination of low inflation, robust economic growth, and strong corporate earnings serves as a catalyst for higher equity prices.
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