Monthly markets review - October 2016
An overview of markets in October 2016 when US equities fell amid caution ahead of the presidential elections and a potential December rate rise.
Unstructured Learning Time
- The MSCI World index declined (in US dollar terms) and was outpaced by emerging market equities.
- US equities fell amid uncertainty ahead of the presidential elections, as well as expectations that a rate rise would be forthcoming in December.
- Eurozone equities advanced, supported by encouraging macroeconomic data as well as solid quarterly earnings reports.
- UK equities delivered positive returns as further sterling weakness supported globally diversified large cap stocks such as the resources sectors and the international banks.
- Japanese equities were supported by a weaker yen, with financial sectors leading the gains.
- Emerging markets delivered positive returns overall. Brazilian equities outperformed after a budget spending cap was approved earlier than expected.
- October was a weaker month for global bond markets as inflation expectations rose in a number of markets. Government bond yields were sharply higher overall.