For the week beginning October 20, 2015.

Two weeks into the fourth quarter 2015 and the S&P Global 1200 is up 6.5 per cent in US dollar terms. Although the US performed well (S&P 500 up 5.89 per cent), emerging Asian markets have performed best with China up 11.08 per cent and Asia ex-Japan up 9.57 per cent.

In the last week healthcare and utilities were the best performing sectors globally as well as in the US. What is really surprising this quarter is a sharp recovery in energy and material stocks, most likely on the back of short covering.

For the purpose of reporting to our clients, we find it useful to be able to show our clients that so soon after the quarter end, their portfolios have recovered a good portion of the previous quarter’s losses.

The current earnings season show US companies missing on revenues but beating on earnings. Despite all the market volatility, companies are awash with cash allowing them to either buy back their own shares or consolidate with other companies providing an opportunity to cut costs post-merger. Last week Dell announced that it would acquire EMC for $67 billion, while Anheuser-Busch InBev NV agreed to buy SABMiller Plc in a record deal for $106 billion.

We have no exposure to either deal, but our stock holdings indicate a steady post-quarter end uptrend. Among our best performing stocks during the week in the Global Equities fund were Facebook and Nike. The best performers of the Dividend Income fund included CCL Industries Incorporated, a Canadian company, which manufactures and distributes packaging globally, and Exxon Mobil Corp.

My favourite stock of the week in the Global Equities fund is Nike. Although not cheaply priced at 27 times earnings, it does meet a number of criteria: growth at a reasonable price, quality of earnings at a reasonable price, providing exposure to the athletic-leisure fashion theme as well as increased discretionary spending from emerging markets (11 per cent of sales come from China).

In the Dividend Income fund, I love Cintas. Cintas designs, manufactures and implements corporate identity uniform programmes. While dining at the Hamilton Princess with a fashion designer friend, we learnt from the restaurant hostess that her uniform was designed by Cintas. The stock does not generate much of a dividend (1.13 per cent) but it is a dividend aristocrat, which means it has consistently increased its dividend over an extended period of time.

So we are much comforted by the post-quarter end performance of global stock markets; however, we do expect that the volatility experienced in the last quarter will continue.

Robert Pires is the chief executive officer of Bermuda Investment Advisory Services (BIAS)