October: the eye of the storm or are skies clearing up?
Søren Otto Simonsen
Senior Investment Editor
Summary: The monthly market rewind for October is for the most part a good story. Equities got back into positive territory and especially the sectors performed strongly. Bonds continued to struggle. Whether the not-so-scary Halloween month is a sign of better things to come, or whether it was a chance to breathe before the storm hits again depends in large part on the central banks.
Asia and Emerging Markets fell 2% and 3.2% in October. Both regions have been challenged by Chinese real estate turmoil, as well as rising Covid-19 cases in the country. Simultaneously, the US Dollar remains strong (even though the US Dollar spot fell slightly in October, as you can see below), which generally puts pressure on Emerging Market economies.
Information technology gained 7.6% despite disappointing earnings reports from the likes of Microsoft, Alphabet, Meta and Amazon. Apple proved to be a bright spot as the company maintained strong financials, which helped the positive performance of the sector.
Global equities are measured using the MSCI World Index. Equity regions are measured using the S&P 500 (US) and the MSCI indices Europe, AC Asia Pacific and EM respectively. Equity sectors are measured using the MSCI World/[Sector] indices, e.g. MSCI World/Energy. Bonds are measured using the the USD hedged Bloomberg Aggregate Total Return indices for total, sovereign and corporate respectively. Global Commodities are measured using the Bloomberg Commodity Index. Oil is measured using the next consecutive month’s WTI Crude oil futures contract (Generic 1st 'CL' Future). Gold is measured using the Gold spot dollar price per Ounce. The US Dollar currency spot is measured using the Dollar Index Spot, measuring it against a weighted basket of the following currencies: EUR, JPY, GBP, CAD, SEK and CHF. Unless otherwise specified, figures are in local currencies.
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