US equities price action has been mainly dictated by Rates recently, but fundamentals took back centre stage with earnings in October.

Key events have been: Inflation data hotter than expected, US 10Y Yield back to levels of June 2008, disappointing reporting on some Tech Mega Caps and US GDP which printed above expectations. As per any previous month at some stage, US markets have priced the possibility that the FED will slow its pace of rate hikes, we remain cautious on FED Pivot.

Nasdaq Composite ended the month on a +3.9% and in EUR terms +2.88%. We had a positive performance in October of +4.6%.

We entered the month fully hedged on the portfolio equity risk. During the first part of the month, we adjusted a large part of the portfolio back to single stocks target weight, taking advantage of new lows and taking minimal risk due to our hedging in place. During the second part of the month, we began to slowly reduce our hedging to not preclude any potential performance coming from fundamentals. We are still very cautious given the current macro backdrop and as a result we still have some protection on the equity risk. Please note that one of the main objectives of our Secular Growth Portfolio stocks, it is to have no exposure to Tech Mega Caps.

Looking ahead, more earnings but also FED and CPI on the first part of the month could set the tone. It is worth noting that at the time of writing, Atlanta FED is forecasting an October CPI month-on-month of 0.8%. We will keep our extremely cautious approach which is reflected in increasing our hedging if and when appropriate. ​


DISCLAIMER: Past performance is not an indicator or a guarantee of future performance.