Measured by the markets in general, September was a positive month. Central Banks in Europe and in the US cut rates as expected. This was supportive to investors risk appetite. The big surprise came in the form of a sudden spike in longer-term interest rates. The yield on 10 year US Treasuries spiked from a historic low of 1.4% into the area of 1.8%. In the wake of this move, a rotation took place out of value stocks, into more cyclical names. Utilities were particularly hit by profit taking. Looking at the lofty valuations in this sector (30 times earnings and above) one might assume a healthy correction. We do not expect the rally in cyclicals to have legs as the macro picture continues to be clouded and geopolitics will continue to support defensive names for the near future.