Commodities Rout Takes a Toll on Fundamentals

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  • Equity markets slumped in the third quarter, as the ongoing commodities rout, uncertainty about a slowing China and negative corporate earnings growth had investors on edge.
  • A change of direction in corporate earnings historically has signaled trouble ahead for equity markets.
  • The end of the commodity “supercycle” is being felt in financial markets and in the real economy.
  • The U.S. consumer has been resilient, highlighting that the directions of the economy and the markets can differ.

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