The steady build of relatively long standing macro-economic and political news and events culminated in a major sell-off for European equities in October 2018. Italy once again came to the fore as the country’s budget proposals received a blunt rejection from EU authorities. The proposed budget deficit of -2.4% does not seem excessive when compared to the likes of the US which is forecasted to grow to -4.00% in 2019, but it does represent an increase from the 2018 level and anyhow the starting point for Italy’s debt burden remains worryingly high at over 130% of GDP. The negotiations continued over the course of the month with the impact on Italian debt spreads and equity markets all too predictable. Although a worrying development, Italy alone was far from the only reason for the malaise in equity markets which was far from confined to Europe. The continued rise in US treasury yields, a factor of both the Fed’s commitment to further rate rises combined with a potential over-heating of their economy, has clearly lessened the attractiveness of equities while causing concern over the longer-term impact such moves may have on overall global growth. The continued trade spat between the US and China only added to these woes. Those looking for it could certainly find evidence of a potential slowdown as corporates began to report on their third quarter results. The automotive market in particular appears to be slowing with a host of profit warnings from the likes of Continental and Daimler amongst many others. China appeared to be the culprit here along with the continued fall-out from the diesel engine scandal. But other industries were far from immune with disappointments seen from companies as diverse as ABI Inbev, Nokia, ABB and Amazon. Others such as Novartis, Roche, L’Oreal and Airbus remain on track so the picture is far from clear and in most cases, despite not meeting expectations, it is the rate of growth that is slowing rather than any signs of earnings declines. Toward month end the Chinese authorities announced their intention to support their domestic equity market helping to stem the worst of the losses.