An Autumn Chill in the Air

Investors are feeling an autumn chill in the markets, and the start of the fourth quarter has been bumpy. The latest negative manufacturing readings, combined with ongoing trade tensions, political wrangling and an overall global slowdown, are joining forces to keep investors on edge. Naturally, more defensive sectors such as utilities and consumer staples have performed better amid the uncertainty. Investors are looking forward to the start of the 3Q19 earnings season in a few weeks. Earnings should provide a more accurate view of the true economic backdrop.

Companies have been guiding downward, with some sectors such as energy and technology forecasting year-over-year declines in earnings. Current expectations are for a slight decline for overall S&P 500 earnings, but this has been the case in the last two quarters: companies put forth an overly negative scenario, only to surpass expectations and post growth. In the meantime, industrial weakness has not yet significantly affected labor trends; consumer confidence and spending remain elevated and central banks are keeping monetary policy firmly supportive.

Remember what happened last December? Investors ran for the hills only to miss out on the best January in 30 years. No need to hibernate yet, just grab a sweater and enjoy the cool autumn air.

Please see the latest Voya Global Macro Views – Recession or Slowdown, Three Indicators to Watch.

This commentary has been prepared by Voya Investment Management for informational purposes. Nothing contained herein should be construed as (i) an offer to sell or solicitation of an offer to buy any security or (ii) a recommendation as to the advisability of investing in, purchasing or selling any security. Any opinions expressed herein reflect our judgment and are subject to change. Certain of the statements contained herein are statements of future expectations and other forward-looking statements that are based on management’s current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Actual results, performance or events may differ materially from those in such statements due to, without limitation, (1) general economic conditions, (2) performance of financial markets, (3) changes in laws and regulations and (4) changes in the policies of governments and/or regulatory authorities. The opinions, views and information expressed in this commentary regarding holdings are subject to change without notice. The information provided regarding holdings is not a recommendation to buy or sell any security. Fund holdings are fluid and are subject to daily change based on market conditions and other factors.

Past performance does not guarantee future results.