Global markets rose to record highs on the back of US equities’ strong growth in a volatile month. Despite the US government shutdown and an escalated trade war with China, all three US indices closed higher. Markets were positive around the expected FED rate cut, and as tensions with China cooled towards the end of the month, equities rallied hard. Chinese equities were also supported by the easing of trade tensions and helped the Emerging Market index outperform the developed market peers.
Local equities continued to their incredible growth run. Although resources detracted, the broader index was able to cinch its eighth straight month of positive returns. South Africa was removed from the Financial Action Task Force Grey List, which bolstered the Financials sector, as well as encouraged foreign inflows into the local bond market. The resulting drop in bond yields was a very supportive environment for local property which finished the month as the best performing asset class.
- The JSE All Share continued to climb, ending the month up 1.6%.
- Resources were a drag to the broader bourse (down 4.8%), as Industrials inched higher (up 1.8%), and Financials did the heavy lifting (up 8.5%).
- Small-caps (up 5.0%) boasted strong gains for the month, as Mid-caps (up 1.4%) outperformed Large-caps (up 1.3%) which was still well in positive territory.
- South African property markets skyrocketed in October, on the back of lower bond yields. The ALPI added 7.8%, while the S&P SA REIT Index reported 11.7%.
- SA Nominal Bonds (up 2.6%) gained ground, while Inflation-Linked Bonds crawled into positive territory (up 1.4%).
- Developed market equities had a strong performance, as the MSCI World Index gained (up 2.0% in USD), but still underperformed its emerging market peers, as the MSCI Emerging Market Index soared (up 4.2% in USD.
- The Rand had a mixed performance, as the dollar strengthened. Relative to the US Dollar (Rand depreciated 0.5%), the Euro (Rand appreciated 1.3%) and the Pound Sterling (Rand appreciated 2.0%).
- Platinum shrunk back after last month’s gains 0.9%, as Gold (up 3.7%), had another strong month and Brent Crude dropped 2.9%.
Source: Factset
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