Global equities hit a stiff headwind in Q3 2023, with the MSCI All Country World IMI Index dipping -3.4%. Rising bond rates, mortgages over 7%, higher oil, plunging factory orders, Chinese deflation, and a UAW strike all contributed to a reversal of the winning streak we had experienced for much of 2023.

Global stocks continued their recovery from last year's downturn, with the MSCI All Country World IMI Index (up around 6% in Q2) outperforming global bonds (Bloomberg Global Aggregate Bond Index) for the third consecutive quarter. Inflation worries in the US continued to temper with the 5-year expectation currently around 2.5% as measured by breakeven rates in the TIPS market. Volatility also trended down with the VIX (CBOE Volatility Index) falling to year-to-date lows in June.