Equities tried to bounce back at the end of October (S&P500 +2.42 percent, MSCI World +2.77 percent, MSCI EMU +3.13 percent, Nikkei +5.00 percent) after bottoming out during the last few weeks. Corporate earnings in the U.S. and Japanese markets were relatively strong on the whole, offering investment opportunities at bargain prices, hence the positive net fund flows. In addition, President Trump announced that the United States had had “very good” discussions with China and confirmed that he would be meeting with President Xi Jinping at the next G20 summit.
Unfortunately, this technical rebound did not wipe out the heavy losses suffered in October and performance varied widely among sectors. Materials (+6.09 percent), Technology (+4.51 percent in spite of the drop in the Apple share price (-6.63 percent on Nov. 2nd) on weaker holiday estimates), Financials (+4.42 percent) and Consumer Discretionary (+4 percent) led the pack while Utilities trailed behind (-0.57 percent). Last but not least, the energy sector also finished the week in positive territory (+1.69 percent) even though the oil price nose dived (WTI down 6.58 percent)!
Unsurprisingly, the 10-Year U.S. Treasury yield rose from 308bps to 321bps in the aftermath of the equity market recovery, thereby losing its recent gains. By contrast, high yield bonds moved slightly higher (Bloomberg Barclays US Corporate High Yield Total Return Index: +0.12 percent).
Find the full report here : https://www.trackinsight.com/weekly-flow-report/2018-11-02/global