After a strong first half of the year, all major equity markets experienced losses in the third quarter. U.S. stocks, as measured by the S&P 500, were down 4.9% in the quarter, though they are still up 11.7% for the year (both excluding dividends). Foreign stocks, as measured by the MSCI ACWI Ex USA Index, were down 3.4% in the quarter which reduces the year-to-date gain to only 2.9%. U.S. small cap stocks and emerging market stocks continue to be the laggards, up 1.4% and down 0.4% for the year, respectively. Fixed income/bond returns were also negative during the quarter due to the sharp rise in interest rates. After falling over 65 basis points to start the year, the yield on the 10-year Treasury bond reversed course in early April and had risen sharply to 4.6% by the end of September (up 70 basis points year-to-date and 135 basis points from the April low). This is the highest level for the 10-year Treasury since 2007. The Bloomberg Barclays Aggregate Bond Index was down 2.5% during the third quarter, erasing gains earlier in the year and resulting in a 1.2% decline through the end of September.