Deutsche Bank: Gold “sparkled” in October – The Stock Market Endured

In first place (in dollar terms) remains the Athens Stock Exchange for the whole of 2023 – among the 38 assets (stocks, bonds and commodities) that the Deutsche Bank“burning” of course a significant part of the overperformances recorded in the previous part of the year.

In more detail, the Stock Market, in terms of equity markets, has recorded a rise of 31.1% since the beginning of the year, with the Nasdaq remaining in second place with a rise of 23.6% for 2023 (in first place in terms of local currency the Russian MOEX index) and the S&P 500 at 10.7%. In addition, the domestic market has managed to maintain its position at the top, against the major European markets, as the Stoxx 600 has recorded a rise of 5.3%, the DAX has strengthened by 6.4%, the FTSE 100 is up 1.4 % higher, while higher returns have been recorded so far by both the FTSE MIB (21.8%) and the IBEX 35 (13.9%).

However, the picture is drastically different when the month of October comes into the picture, where the Stock Exchange is in the middle of the ranking (21st place) in dollar terms, with goldhim MOEX and silver to lead positive returns.

Of course, the story that dominated the world in October was the Hamas attack on Israel on October 7th. From a markets perspective, the biggest concern was whether this could lead to a broader escalation and in that light, there was a clear reaction among many major assets. For example, oil prices they rallied 7.5% in the week immediately following the Oct. 7 attack, their biggest weekly gain since February. A significant increase was also recorded by gold as it rallied 7.3% in October on the back of “safe haven” sentiment, marking the precious metal’s best month since the banking turmoil in March.

At the same time, the markets also focused on continued resilience of the US economy, with recent data continuing to surprise mostly to the upside. At the beginning of the month, it was announced that the US economy added another 336 thousand jobs (in the month of September), which was the most since January. At the same time, the latest data also showed a continuing trend of inflationary pressures, with headline inflation at a five-month high in September. With that in mind, futures continued to price in a 41.5% probability of another rate hike by the January 2024 meeting.

The S&P 500 fell 2.1%, snapping a three-month losing streakfor the first time since March 2020. It should be noted that the only time since the Global Financial Crisis that the S&P 500 has recorded a losing streak of more than three months was in mid-2011, when the index lost ground for five consecutive months amid the Eurozone crisis and the US debt ceiling crisis.