Investment portfolios are ending October in much better form than they started it, with most global indices having enjoyed a decent rally over the past four weeks, in sharp contrast to August and September. Central banks have been the drivers of late, with their recent pronouncements very much dictating the flow of risk appetite.
Next week that will give way to a storm of economic data, with PMIs from around the globe and then US job numbers on Friday. For now, there is a lack of reasons to drive equities higher from their current levels, but fourth-quarter seasonality plus the distant expectation of more quantitative easing in the eurozone should act to prevent any significant selloff in coming weeks.
At least there has been some good news in the eurozone, with unemployment falling to a three-year low. Inflation even managed to rise, a fact that will give Mario Draghi pause for breath. He has probably saved the eurozone from depression, but the full-blown economic recovery he is looking for has yet to arrive.
US oil firms are as beset by low prices as their European counterparts, as demonstrated by reports from ExxonMobil and Chevron today. The common theme from the oil majors has been that their diversified business operations will continue to provide some refuge from the turmoil in the global oil market.
So far, dividends have been one area that have not been cut, and while some executives might be tempted no one firm has yet had the courage to take an axe to their payouts.