Well, September confirmed that it was historically a bad month for equity, with S&P500 losing ~5%. The cause of that? Supply chain disruption continues to rumble on and wreak havoc in the energy market, while suppressing the excess of liquidity is already pounding on leveraged companies and setting the implied yields higher.

Global GDP is set for a continued strong growth in 4Q21 and ’22, as the progressive easing of covid lockdowns is giving a boost to services consumption. Global industrial production is almost back to historical trend, and supply chain disruption is part of the short-term story. So, the macro picture is overall improving for fact.

Temporarily, the premium paid for growth assets does not seem to be justified, and any correction is welcome. Granted rates would, and certainly should go up in 2022 globally, but real rates remain deeply negative. In such environment, who really wants to go full-on rent-seeking and pivot away from innovation? Well, nobody. Therefore, we continue to be cautiously optimistic, despite the retrenchment of September.

360 Advisory – Markets