There has also been a slew of other worries, including slower eurozone growth and Brexit. Looking ahead, while all the recent focus has been on downside risks, a broader perspective should allow for the possibility that the long post-GFC economic recovery is still intact, although there is the potential for ill-advised political brinkmanship to derail the cycle....

Looking ahead, the global economy looks like continuing its already long post-GFC expansion into 2019, which should be supportive for growth assets, but equities remain overdependent on the performance of American shares and the American economy, and there are risks (notably around trade wars and potential mistakes from accidentally overtightening monetary policy) which could derail the outlook...

World equities sold off in October, based on a range of concerns. The two most important were the potential impacts of higher bond yields, and the prospect of the U.S. or global business cycles running out of momentum...

The world economy is still growing, which is a generally positive background for risk assets, but investment outcomes have become overdependent on ongoing gains from U.S. equities. The most likely outlook is ongoing global expansion, though trade wars, monetary policy mistakes, problems in some emerging markets, and geopolitical shocks are all real risks to monitor...

Markets in recent weeks have been upset by the potential threat to world economic activity from trade frictions between the United States and other major countries and trading blocs. There have been other episodes of concern over global growth since the current post-crisis global recovery set in...