Overall Market Summary
October 2024 was a challenging month for global financial markets, with most major asset classes posting negative returns. The exceptions were gold, silver, and oil, which saw gains amid rising geopolitical tensions and economic uncertainties. Concerns over fiscal policies, persistent inflation, and escalating conflicts in the Middle East contributed to market volatility.
United States
U.S. equity markets exhibited resilience despite increased volatility. The S&P 500 recorded a gain of 2.2%, while the Nasdaq surged by over 4.5%. This performance occurred amid mixed reactions to corporate earnings and geopolitical tensions. Notably, companies like Tesla, Philip Morris International, and Netflix saw stock price gains exceeding 10% after announcing strong third-quarter results.
Europe
European markets faced headwinds, with the Stoxx 600 index declining. Concerns over weak demand from China particularly affected cyclical stocks, including the automotive and luxury sectors. Despite these challenges, European banks performed well, benefiting from high interest rates that supported their margins.
United Kingdom
The UK market experienced declines, with the FTSE 100 index down by 2%. This drop was influenced by increased borrowing announced in the new government's budget, which raised concerns among investors. Additionally, the Bank of England's decision to maintain interest rates amid persistent inflation added to market uncertainties.
Japan
Japanese equities fell back for a second quarter following the Bank of Japan's rate hike. The Nikkei 225 index declined, reflecting investor concerns over the central bank's monetary tightening and its potential impact on economic growth.
Asia (excluding Japan)
Asian markets, particularly China, faced challenges due to weak economic data and geopolitical issues. Chinese shares declined, influenced by sluggish economic growth and concerns over the global economic outlook. However, China's unveiling of its most substantial stimulus package since the pandemic aimed to boost its ailing economy.
Emerging Markets
Emerging markets struggled, with stocks and bonds posting negative returns. Concerns over fiscal-policy decisions, high inflation, and rising tensions in the Middle East contributed to the downturn. Despite the challenging month, most assets have shown strong performance throughout 2024.
Global Bonds
Global bond markets experienced declines, with Bloomberg's global bond aggregate experiencing its worst performance since September 2022. Concerns over fiscal policies and rising inflation contributed to the sell-off in bonds. However, the global monetary easing cycle persisted, with major central banks lowering interest rates amid approaching U.S. elections.
In summary, October 2024 was marked by widespread declines across global financial markets, driven by geopolitical tensions, economic uncertainties, and fiscal policy concerns. While precious metals and oil provided some positive returns, equities and bonds faced significant challenges during the month.