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Gerald Fitzgerald’s Market Review October 15th

15th October 2018

 

 

LAST WEEK IN 30 SECONDS...

Negative market sentiment continued last week with global markets selling off sharply before marginally recovering on Friday. At the heart of the issue was investors’ view on the pace of rising bond yields, in particular that of US Treasuries. Markets recovered somewhat on Friday following muted US inflation.

Global equities were down -4.4% for the week with all sectors selling off, most notably Materials and Industrials. Technology stocks had earlier led the sharp market sell off during the week with the MSCI Tech Index down -6.5%, before rallying on Friday to close -4.0% for the week.

Within the Eurozone, economic uncertainty was further compounded by continuing concerns surrounding Italian debt levels and more importantly the pacing of developments on Brexit. With media outlets starved of specific detail on the declaration document, anticipation grew that agreement could be within arm’s length. Early indications today, however, have dampened the idea that this will be wrapped up quickly.

 

THIS WEEK IN 30 SECONDS...

Brexit continues to dominate headlines this week as discussions reach another pivotal hurdle – watch out for increasing market volatility as the week progresses should both sides fail to reach agreement. Elsewhere, the fallout from the disappearance of journalist Jamal Khashoggi since his visit to the Saudi Arabian embassy in Turkey looks set to intensify – watch oil prices in particular. On the data front, Eurozone inflation metrics are released on Wednesday.

 

EMERGING MARKETS – A LINGERING FEDACHE

Emerging markets have borne the brunt of negative sentiment following the latest round of hikes by the US Fed. Coupled with rising trade tensions and protectionism, this has seen emerging market equities drop by -10.9% over the year-to-date.