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Fourth quarter 2013 market update

Outlook: business cycle supportive of stocks, U.S. economy resilient, bonds stabilized.

During the third quarter of 2013, the Federal Reserve (Fed) and policymakers in China backed away from previous signals of tightening, helping to stabilize global interest rates. 

Modest cyclical improvements globally underpinned a broad rally in equities, especially in developed markets, which have been outperforming emerging markets on a sustained basis for the first time in more than 10 years. 

In the U.S., most bond categories reversed into positive territory after the Fed’s surprise move to extend quantitative easing (QE) at its current level. The global outlook appears range bound amid slow, incremental growth and high policy uncertainty.

Get insight from Fidelity's Asset Allocation Research Team in the Q4 2013 Quarterly Market Update.

Complete report

Complete Quarterly Market Update A 50-page interactive report on what's behind the international and U.S. markets.

Q4 2013 key takeaways

Key takeaways for the third quarter 2013 Outlook: business cycle supportive of stocks, U.S. economy resilient, bonds stabilized.

Deep dives on key investing themes for Q4 2013

Attractive stocks

Active investors may discover inexpensive opportunities in companies with a global footprint.

Seeking yield in stocks

Corporate balance sheets are healthy, enabling a focus on investor returns and dividends.

Diversify your bonds

How a multi-sector bond approach can help boost income potential when rates are low.
The Asset Allocation Research Team (AART) conducts economic, fundamental, and quantitative research to develop dynamic asset allocation recommendations for the Global Asset Allocation Division of Fidelity Asset Management (FAM), the investment management arm of Fidelity Investments. Lisa Emsbo-Mattingly, director, Dirk Hofschire, senior vice president, and Craig Blackwell, analyst, contributed to this article.
The information presented above reflects the opinions of Dirk Hofschire, CFA, senior vice president, asset allocation research, and Lisa Emsbo-Mattingly, director of asset allocation research, as of October 11, 2013. These opinions do not necessarily represent the views of Fidelity or any other person in the Fidelity organization and are subject to change at any time based on market or other conditions. Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Past performance and dividend rates are historical and do not guarantee future results.
Stock markets, especially foreign markets, are volatile and can decline significantly in response to adverse issuer, political, regulatory, market, or economic developments.

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.)  Fixed income securities also carry inflation risk, liquidity risk, call risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

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