There was a sharp rebound in stocks last month, as US corporate earnings announcements in respect of the third quarter have showed signs of resilience to hardening economic conditions. Bond prices fell (and yields rose) as market participants decided defensive bond purchases were becoming overdone. Money rotated into equites, driving the S&P500 up 5% in the penultimate week of October and up 4% last week. The energy sector (more later) is reporting earnings growth of well over 100% year on year, intensifying calls for windfall taxes on perceived outsize profits. By contrast the mega-capitalised technology companies, the so-called ‘generals’, have taken a pasting.
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