Bond Math

September continues to be a brutal month for equities as markets fell globally despite data that indicates strong GDP growth in the U.S. Workforce participation rates are normalizing leading to continued gains in employment but also loosening the labour market. This is leading to a slowing of wage growth. This combined with larger output volumes should slow inflationary pricing pressures but also lead to better profit margins. There is still a classic inventory correction recession in our near future once output catches up to the excess demand created during the pandemic shutdown, we would expect this to be the catalyst for the global central banks to neutralize anti-inflation policies. We believe the stock markets of the world will rally on this looking forward to a stabilized productivity driven economy with the opportunity of strong profit growth. In the short term, interest rates will continue to dominate the market narrative.