Celestino Brunetti
Italy
4m
Dear copiers, investors, and followers, As October comes to an end, our portfolio closed the month with a profit — though not without some bittersweet notes. First and foremost, equity indices continued to surprise on the upside, supported by the Fed’s rate cut and strong Big Tech earnings. The month ended positively for U.S. equities despite ongoing uncertainty over the future pace of rate reductions and some mid-month volatility triggered by social-media comments that were quickly denied — a storyline we’ve already seen far too many times this year. What stands out is the resilience of the indices, which, despite still-elevated rates and the early effects of tariffs, continue to post new all-time highs. In the forex and commodities space, the U.S. dollar had likely already priced in the potential rate cut before it happened, which is why it benefited from Fed Chair Jerome Powell’s cautious tone regarding future moves. The dollar’s strengthening was particularly sharp against the Japanese yen, following the election victory of Sanae Takaichi, whose well-known expansionary stance put additional pressure on Japan’s currency. On the commodities front, however, the real weak spot was palladium — a topic I’ll cover in a dedicated article soon. Looking ahead (and noting that the following should not be considered investment advice or a solicitation to take risk), I continue to believe markets are running too fast and that the current macroeconomic environment may not be able to sustain today’s valuation multiples for long. We’ll soon see how markets react in the event of a non-cut scenario toward the end of the year. Happy Halloween, and ad maiora!
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