Style Cycle: Boom gains breadth

The Style Cycle advanced further into the 'Boom' phase in October, with the European Composite Macro Indicator (CMI) up another 5 points, its largest increase since Jan '25, as five of six inputs improved: the 12-month change in European 10Y bond yields, Pan-European PPI, German IFO, global EPS revision ratio and GDP forecasts rose, while only the BofA Europe Leading Indicator moderated slightly. 'Boom' favours both Value and Growth, Rising Momentum, Low Quality, High Risk and Small-Mid over Large caps. Last month Top Style Cycle stocks outperformed Bottom stocks by 1.6%, with outperformance in 11 of 20 sectors and 6 of 8 countries. European equities have historically absorbed rising yields well, though today's 4-5% yield backdrop offers less valuation cushion;