Here are biggest moves in a tumultuous October so far across global mkts

It seems like there’s nowhere to hide. Equity investors can certainly be excused for feeling that way at the moment, buffeted by waves of selling washing over markets from New York to Shanghai thanks to an ever-growing list of concerns from tighter financial conditions to trade tensions, corporate earnings, economic growth and geopolitical flare-ups in Europe and the West Asia. 

 

Here’s a look at some of the biggest moves in a tumultuous October so far for markets:

 

Wealth wipeout (see chart 1)

It has been a grim month for global equity markets. More than $6.7 trillion in value has been wiped off the world’s market capitalisation since late September. That compares with the $7.8 trillion lost in the February correction earlier this year.

US in the red (see chart 3)
 

The decade-long bull market in US stocks is finally losing steam. The S&P 500 Index has declined in 19 of 24 days since peaking in September, and finally erased its annual gain, alongside the Dow Jones Industrial Average.

Asia’s bear hug (see chart 2)

First it was Vietnam in May. Then China and the Philippines in June, and Hong Kong in September. Now, it’s both South Korea and the MSCI Asia Pacific Index that capitulated, with the regional gauge entering bear-market territory for the first time since 2016.

Hong Kong phooey  (chart 4)

The key trading port and financial hub of Hong Kong finds itself stuck in the middle of the trade war between China and the US. And its equity market is bearing the brunt. With two months left in the year, the city’s benchmark Hang Seng Index has already suffered losses of more than 2 per cent on 12 occasions, compared with only twice in 2017.

End in sight (see chart 5)

Investors are bringing forward the timing of the next US recession. The spread between December 2019 and December 2020 eurodollar contracts has fallen back below zero, suggesting short-end traders have reheated expectations of a possible interest-rate cut after next year.