September 2019 Overview

The month of September rounded off the 3rd Quarter with the burning question top of minds: “Is this the real evidence of the World heading for a Global Recession?”
 
The month started with the introduction of the first round of trade tariffs implemented by both the US and China. And while hopes of an agreement to stabilise the Trade War simmered through September, the world still waits with baited breath for these talks to take place next week in Washington. Unfortunately the weight of the Trade War on investor sentiment has continued, even though many hold an optimistic view on a workable agreement…

Interest Rates were the next dominant theme, as both US Federal Reserve and the European Central Bank (ECB) both cut rates in attempts to boost growth and support asset prices (not always the wisest move!). the subdued tone of the Fed’s statement on their interest rate outlook overshadowed the actual lowering of rates, which did place a dampener on any optimism following the rate cut.

 
Following the US accusing Iran of a drone-attack on Saudi oil fields, tensions in the Middle East kept financial markets on edge, pushing the price of Oil higher as concerns of a disruption to global oil supply were raised. And although Saudi Aramco reassured the World that disrupted supply would be resolved within two months, it did little to calm markets towards month-end.

Locally, South Africa’s 2nd Quarter GDP figures showed the local economy expanding again after a 1st Quarter contraction. Notwithstanding this, business confidence remains under pressure as we watch to see if/when government will follow through on its economic policy and action plan.

With all of the above considered, the Octagon Portfolios finished September nicely positive, supported by our overall defensive positions, our preference towards flexible income and broad diversification across assets, geographies and strategies.
 
For the recent fund fact sheets, click here