And The Best (and Worst) Performing Asset In October (And 2012 To Date) Is....

Tyler Durden's picture

If you bought the deep OTM, high theta option that is the Greek stock market on October 1, or wheat on January 1, 2012, you can now retire. For everyone else who still hasn't gotten the hang of this here "New Normal" Cramer market, better luck next time.

October best and worst:

And 2012-to-date best and worst:

And some thoughts from Deutsche:

With the exception of commodities and a few other markets, October was on balance a positive month for risk asset performance. European equities were mostly higher led by gains in peripheral markets. Indeed the best total return performance came from Greece which saw the Greek Athex index (+8.4%) outperform its peers by a considerable margin – despite the ongoing uncertainties around the sovereign’s bailout package. Greek equities have produced a YTD total return of over 20% which is not too dissimilar with returns seen in the DAX (+23.1%) and the Hang Seng (+21.6%). The ECB’s conditional backstop continued to support appetite for the peripheral complex with the IBEX and FTSE MIB also up +1.7% and +3.0% respectively in October even though Spanish equities are still the worst performing asset within our selection with a -6.0% YTD return. The peripheral strength was also notable in fixed income markets with Spanish and Italian bonds gaining +2.5% and +1.8% respectively over the month.

 

Away from Europe, it was interesting to see that the Fed’s QE3 announcement hasn’t been as effective in boosting US equities and commodities prices so far. Indeed both asset classes had a poor month in October with the S&P 500 (-1.8%) down for the first time since May. Silver (-6.6%), Copper (-6.4%), CRB (-4.4%), Wheat (-4.2%) and Gold (-2.9%) were also some of the worst performers in our sample in October.

 

Core government bonds had a moderately negative month in October. Gilts, USTs and Bunds lost -0.7%, -0.2% and -0.1%, respectively. In terms of credit markets it was another good performance for investors with further excess returns seen in October. Total returns for European IG and HY credit were up 1.0% and 1.7%. US IG and HY were up 1.0% and 0.9%. Credit is having a fantastic year so far with equity-like returns. EU Fin Sub, EU HY and US HY are up 26%, 20% and 13% respectively for the year. Although as we showed in the last weekly, given the strong performance of credit over the course of the year and the fact that spreads are notably tighter now than they were at the start of 2012, it is almost mathematically impossible we will rival these returns over the next 12 months.

"Mathematically impossible" never stopped a central bank-funded bubble before...