Investment Management – Third Quarter 2016
The third quarter kicked off with considerable speculation on how damaging the Brexit vote would be for the United Kingdom (U.K.) and the overall European economy. The immediate reaction was negative and driven by fear. However, after only two days of U.S. market losses, stocks rebounded sharply. As the fear subsided, so did volatility, and stocks experienced one of the calmest quarters in two decades. This is yet another example of the whipsaw in confidence that investors have endured throughout this business cycle.
With investor confidence increasing, capital flows began to rotate away from defensive areas, such as the Utilities sector, to more cyclical and growth sectors, such as Consumer Discretionary and Technology.