October was a strange one — and not just for the elections. Pretty much everything that was recovering this year slipped in last month.

August was not much of a month for bonds or stocks and was surprisingly tame given swings in global markets over the last year or so. Slightly rising interest rates pushed bond prices down, and with not much in stock market upside to overcome the drag, we had fractional losses in both portfolios. 

With a sharp rebound following a fast drop, a casual market observer reviewing one-month performance numbers might not think much happened in June. But recent days have been anything but ordinary. The cause was Brexit, the British referendum to leave the EU not going as market players though it would.

The dramatic rebound seems to be running out of gas—or rather, oil. Recently, corporate earnings have been weak while stock prices have been strong. This can't continue for long. Either earnings will have to head back up or prices will have to head down—otherwise, we'll have late-1990s-style high P/E ratios, only without the expectation for high earnings growth. That's not going to happen.