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In this CIO Viewpoint Equity – Setting the course for Q4 – we comment on the latest equity market developments, elaborate on our new September 2025 equity index targets and share our view on how the relative performance of Cyclicals vs. Defensives might evolve from here. Moreover, we provide a short Q3 2024 earnings season preview.


Key takeaways:

  • Entering into Q4, we appear to be in a benign scenario where the Fed is cutting rates outside of a recession, with data so far confirming the resilience of the U.S. economy. 
  • As we don’t expect a marked economic slowdown in the U.S. and Europe or a shock on the interest rate side, we have raised our equity index targets. 
  • Historically Cyclicals tended to underperform Defensives after the start of rate-cutting cycles. This time we expect Cyclicals to do well on the back of strong U.S. growth and an expected uptick in European growth.

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The CIO Viewpoint below is available to download. Please refer to the Important Information at the end of the memo for disclosures and risk warnings.

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