After what had been an almost uninterrupted bull run across global equity markets following President Trump\u2019s \u2018Liberation Day\u2019 speech on 2 April, markets have finally paused for breath. The recent correction has been modest \u2013 and, frankly, probably a healthy one. It reflects not only the lofty valuations that many of the AI leaders now command, but also a few emerging macroeconomic clouds.<\/p>\n
We are seeing signs of softness in both US and UK labour markets \u2013 though the data remain a little foggy given the ongoing government shutdown. Manufacturing activity is weakening, and core inflation remains stubbornly high. None of this yet points to a global recession, but the momentum seen earlier in the year is clearly slowing \u2013 in the US, in Europe, and increasingly in China.<\/p>\n
Against this backdrop, however, the Q3 earnings season has been surprisingly resilient. Corporate results have again beaten expectations on both sales and profits. Meanwhile, US share buybacks remain strong, and global dividends continue to rise.<\/p>\n
So, despite tariffs, deficits and softer macro data, the world\u2019s great equity blue chips still appear to be in remarkably good health. Guy Monson considers the big question: how long can this continue \u2013 and can earnings really keep defying gravity?<\/p>\n
Watch the video below.<\/p>\n