History doesn’t repeat itself—but investors often do. Especially lately. While markets drift sideways, the familiar tune plays on. And that’s not necessarily a bad thing.
For years now, I’ve introduced my financial columns with a song. It’s a small ritual that helps me step back, put things into perspective, and view market events through a different lens. Music is said to soothe the soul. Whether it works on the markets is debatable, but this month, I felt like turning up the volume to cool down overheated expectations. I’ve picked “Same Old Song and Dance” by Aerosmith to set the tone.
Admittedly, it’s not the softest choice—but few tracks capture the repetitive rhythm that’s defined the markets over the past two years quite like it. “Central banks—ouch. Economic data—meh. Earnings season—here we go again.” Quarter after quarter, the same refrain. And we investors? We keep dancing. The night is long—but the markets are still moving up.
In equities, the beat struggled to pick up in October. The ever-energetic US market eked out a few basis points. The SMI and Nikkei followed with little enthusiasm, while the Eurostoxx stumbled. Meanwhile, China stayed at the bar—after showing signs of revival in September thanks to a liquidity boost, it slipped back into old habits (at least from a Western investor’s point of view).
It’s hard enough to explain market moves when something is happening. (Index shifts are the result of millions of interactions—many algorithm-driven—but we’ll always find headlines to pin them on.) When nothing happens, it’s even harder. Which is probably why I’m tempted to crank the speakers again.
More seriously, if equity markets lacked momentum, it’s because the news lacked impact. Rate cuts are still pending, but liquidity isn’t drying up. Company results were solid but unsurprising. Economic data left both optimists and doomsayers disappointed. Even the US election storyline feels stale. Thankfully, American banks—which all reported Q3 profits—added some spice by forecasting a gloomy outlook for equities.
If it’s adrenaline you’re after, look no further than the bond market. (Words I never thought I’d write!) Yields went up—then down—then up again. The bluff between bond managers and central bankers continues. At the start of the year, central banks said they’d take their time. Markets priced in six rate cuts. Now, central banks hint we’re well above neutral rates, and markets reverse course. The “bond vigilantes” are sounding more like union reps these days.
Still, these quieter market phases are valuable. They signal digestion—proof that the financial ecosystem is absorbing information. That’s a good thing. Better than knee-jerk capital reallocation. They also give us investors a chance to reassess our strategies. And when the obvious options feel exhausted, our attention shifts elsewhere in search of alpha and insight.
Take commodities, for example—mirrors of global demand and geopolitical barometers. Their lack of extremes in October is reassuring. Or gold, resilient amid uncertainty and outperforming equities year-to-date. Or even crypto, regaining momentum and deserving a closer look. We may not have found Satoshi, but at least Trump is back in the headlines.
Yes, asset classes have started to move more in sync. But opportunities remain plentiful. There are still pockets of value and sources of return that can feed well-diversified portfolios. That’s good news for investors.
The same old song—whether from the markets or Aerosmith—will likely stay on repeat for a while. But at least now, we’ve got more than one rhythm to dance to.