The purpose of this post is to add extra color and commentary around the charts.
The charts focus on the S&P500 (US equities); and the various forces and factors that influence the outlook - with the aim of bringing insight and perspective.
Hope you enjoy!
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1. Happy New Month! The S&P 500 notched up a very respectable 6.9% for the month of October. The chart below shows the monthly progression - n.b. click here for the log chart version (for the log chart enjoyers). Pretty much the reverse of September as seasonality and sentiment shifted.
2. Asset Class Returns in October: Among the assets I keep track of (these are the ones I run Capital Market Assumptions for), the S&P500 [US Large Caps] was a close second from the top in October. Overall it was a very risk-on month: equities and commodities did well, and just about all flavors of fixed income took a step back as government bond yields surged globally. EM local currency bonds took a double whammy from rising yields and softer EMFX.
3. November is Here: Regular readers will note that seasonality has been a running topic lately (especially given that it helped flag the September stumble and subsequent rebound). Since we’re just about into November, I thought this chart would be worth highlighting - it shows that historically November has been one of the best months of the year. But then again, one could ask the question: how many of those Novembers featured the Fed announcing taper?! (n.b. the FOMC meets this coming week!).
4. Seasonal Fund Flows: A logical flow-on - as you might expect: November has historically been one of the strongest months in terms of inflows into equity funds.