Global markets have weathered well the geopolitical risks of the past three months. Along the French elections and Brexit negotiations there were green shoots of pickup in economic activity in the Eurozone and Japanese inflation rebirth, which sparked, although temporarily, a gradual sell off in G3 sovereign yields and a rally in risk markets including the peripheral euro countries. This has supported equity markets globally, with the US becoming somewhat richly valued relative to historical standards but with solid past and expected earnings and free cash flow growth. Health care and technology over performed the broader market and slowly gaining a bigger share of the entire S&P500 index.
The consolidated bullish trend has created a low volatility environment, with the VIX index trading at historical low levels which has made investors complacent but somehow nervous of looming corrections.