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Here Are The Best And Worst Performing Assets In The Most Volatile Month In Years

Tyler Durden's picture




 

To think it was just over two weeks ago, when the Russell was in a bear market, and the S&P was on the verge of not only closing red for the year, but entering its first correction in years. Then James Bullard soothed all the selling algos that in a worse case scenario the Fed will rush to bail all the BTFDers out yet again, and the rest is history.

What ensued was an October, which as DB's Jim Reid notes,  proved to a wild ride for markets with mixed performances across various asset classes. Indeed on volatility alone October actually saw the widest intra-month range for the S&P 500 since October 2011. The S&P 500 finished the month at an all-time new high of 2018 after having dipped to an intraday low of 1821 around mid-month giving rise to high-low range of almost 198pts. Whilst Stoxx600 had a negative performance in August the intra-month range of 41pts was the widest since August 2011. The ‘flash rally’ in Treasuries around mid-month also produced the most volatile month for the asset class since the taper-tantrum last year. The 10yr note experienced a intra-month range of 64bps which was just shy of the 67bps range we saw in June 2013.

Some other observations:

Volatility aside October was pretty much a month of two halves with the turn arriving at around the mid-way mark. Generally both equities and fixed income did well with the latter retracing some of the gains as the bid for safety assets moderated. Soft commodities (Corn and Wheat) aside, equities took up half of the top 10 best performers in October. The Russian MICEX, the Hang Seng, the S&P 500, Shanghai Composite and the Nikkei were up +5.7%, +4.8%, +2.4%, +2.4% and +1.5%, respectively on a total return basis. The Hang Seng reversed most of the protest-led losses in September whilst the Nikkei received a treat on the very last day of October following the BoJ’s surprise move to add more stimulus. On a total return basis US HY credit (+1.5%) was one of the better performers in October although it did also benefit from a solid performance in rates. Treasuries were up as much as +2.3% in mid-October before giving back some of those gains to close 1.1% up on the month. Staying in fixed income core rates markets were also stronger in October with Bunds and Gilts adding +0.6% and +1.4%, respectively. The European peripheral complex was weaker though. Italian bonds and equities were down -0.4% and -5.3% in October. Spanish and Portuguese equity markets were also down -2.8% and -8.3%, respectively. But the worst performer in October goes to Greek equities with the Athex index losing nearly 14% after having lost nearly 9% in September. In fact Greek equities are now the worst performing YTD asset class in our sample, now down 21% in local currency terms and 28% in USD terms. Elsewhere the EM complex also had a good October with the MSCI EM equities index and EM bonds up 1.2% and 1.6% respectively.

 

Before we wrap up, October was also the month where Oil officially dipped into bear market territory after a monthly decline of 12% in WTI and 10% in Brent. The Dollar strength probably didn’t help although in reality the decline was also driven by concerns around aggregate demand. The Dollar gained 1.1% against major currency pairs to mark its fourth consecutive monthly gain whilst the JPY has depreciated to a 2007 low. Our usual performance table and charts included in the PDF. It has all the YTD performance charts and data included.

And here are the charts showing the best and worst performing assets for October...

 

and for YTD, both in local currency....

 

and in USD.

Note that while some of the best performing YTD assets in local currencies, such as BTPs and Spanish bonds roared in EUR terms, they are increasingly subdued when redenominated in USD, suggesting that the S&P's gain is nothing more than a voluntary submission to being beggared by its neighbors. It remains to be seen just how much longer the US can sustain being the world's whipping currency, and surging day after day.

 

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Mon, 11/03/2014 - 11:55 | 5406836 FieldingMellish
FieldingMellish's picture

So are corn and wheat commodity leaders or laggards?

Mon, 11/03/2014 - 13:02 | 5407097 lameusername
lameusername's picture

More importantly I would say among many others, they are big signs of an increase in food prices soon to price the poor out of survival & the middle class soon to be the new poor. Unless you grow your own food, then the whole economic ponzi scheme is basically a non-factor. Until the controllers take your land away.

Mon, 11/03/2014 - 11:57 | 5406847 cowdiddly
cowdiddly's picture

simple Dr. copper don't lie. The economy sux

Mon, 11/03/2014 - 12:09 | 5406882 gold-is-not-dead
gold-is-not-dead's picture

Exactly, the overall index prices don't matter, the copper consumption is the main index.

Mon, 11/03/2014 - 12:01 | 5406857 FuzzyDunlop21
FuzzyDunlop21's picture

Silver should be negative by Jan 2016

Mon, 11/03/2014 - 12:33 | 5406980 boogerbently
boogerbently's picture

They'll pay us to take it off their hands ?

Mon, 11/03/2014 - 12:02 | 5406858 JustObserving
JustObserving's picture

Don't have a job? - ISIS is paying $225,000 a year for suitable candidates

Head Hunters: ISIS offers top oil jobs for 'ideologically suitable' engineers

http://www.youtube.com/watch?v=sjkuigrX4-w&feature=youtu.be

Mon, 11/03/2014 - 12:50 | 5407057 dracos_ghost
dracos_ghost's picture

I guess Zuckerberg is reaching out. So instead of Facebook it's BeheadBook.

Mon, 11/03/2014 - 13:57 | 5407297 Kirk2NCC1701
Kirk2NCC1701's picture

Deface book. Or is it deFaceLook?

Mon, 11/03/2014 - 14:33 | 5407435 tocointhephrase
tocointhephrase's picture

Head hunters. Pun intended? 

Mon, 11/03/2014 - 12:05 | 5406867 The Merovingian
The Merovingian's picture

<---- On 12/31/14: GOLD above $1175

<---- On 12/31/14: GOLD below $1175

Mon, 11/03/2014 - 12:35 | 5406981 boogerbently
boogerbently's picture

Nov 30.

Mon, 11/03/2014 - 12:05 | 5406870 The Merovingian
The Merovingian's picture

<----- On 12/31/14 SILVER above $16

<----- On 12/31/14 SILVER below $16

Mon, 11/03/2014 - 14:17 | 5407371 Kirk2NCC1701
Kirk2NCC1701's picture

<-- want Ag at $15
<-- want Ag at $35

Which of these two suit you better?

Mon, 11/03/2014 - 14:21 | 5407385 BrosephStiglitz
BrosephStiglitz's picture

Going down lower.  Maybe it floors at 14.  Maybe it floors at 8.

Either way, I'll be buying it all the way down.

Mon, 11/03/2014 - 12:37 | 5407000 Chupacabra-322
Chupacabra-322's picture

I don't need 500,000 documents to tell me that 911 was an orchestrated False Flag carried out by the highest Compartmentalized levels of intelligence agencies throughout the world. Including but not limited to the Criminals Mossad, CIA, ISI & Saudi Arabia to name a few. In a attempt to use the False Flag as cover to the massive Financial Crimes carried out on the same day.

Mon, 11/03/2014 - 12:14 | 5406887 ZoroAustrian
ZoroAustrian's picture

US the world's whipping currency day after day?

Something doesn't compute here, I think the US likes being the 'whipping currency'.  They get to consume the fruits of the rest of the world's labor and non-renewable resources for even less fake promises, and their markets float ever higher due to 'safe haven' financial flows and lala land tech bubble 2.0 pie in the sky growth fairy tales, outperforming everything else, maintaining the bullshit cleaest dirty shirt narrative.

Sure, comapanies' profits will be lower based on lower FX translation, but profits (or any fundamentals) don't matter to stock prices in the new normal anyway so if assets keep going up who's going to care?  And it's not like the US really exports much except for weapons and funny money anyway.

This king dollar stuff is straight from their playbook isn't it?  How exactly is this hurting the US?

Mon, 11/03/2014 - 12:39 | 5407003 boogerbently
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Yen and Ruble in a race to the bottom.

Mon, 11/03/2014 - 12:59 | 5407091 Bemused Observer
Bemused Observer's picture

We are living within the brief 'snapshot' of time where we are still coasting on our past, but haven't yet hit the wall of the inevitable. It almost seems like a 'golden age' where we get the best of both worlds.
But it is a snapshot, and that wall is coming fast.

What they've done to our currency has destroyed the price/value discovery methods of the free market. Goods MUST find their proper price, or they will be taken off the market. TPTB right now are driving PM's down in price, but the DEMAND for physical continues to grow. At some point, holders of physical will refuse to part with it at the "official price", and you have 2 markets for the same commodity. Low prices only work if sellers can be found at that price...good luck trying to get me to sell anything at some fake, low price. I don't care WHAT the paper price of gold is, you aren't getting my actual metal for anything near that.

THEN what does 'King Dollar' do? Does it behave, and continue to price according to what TPTB want? Or does it go for true market-pricing, and everything starts to spiral out of control? Well, if there is any sense that the current pricing structure is faulty, the markets will adjust fiercely, because that is what they DO. Business will grind to a halt while everyone waits to see where it all shakes-out.

Since buyers of anything can't buy unless a willing seller can be found at that price, I can't see the status quo lasting too long. Financialization aside, an economy needs actual buying and selling, goods changing hands. Sellers who get the idea that the market for their stuff is artificially low will hold back their stuff, until you end up with either the two different markets, or a massive repricing of the existing one.

Mon, 11/03/2014 - 15:18 | 5407619 chubbyjjfong
chubbyjjfong's picture

FAITH in currency is dwindling.

Mon, 11/03/2014 - 12:14 | 5406900 assistedliving
assistedliving's picture

U know ur not doing good when u hold 4 of the bottom ten performers...why, oh why do i read ZH

Mon, 11/03/2014 - 12:13 | 5406901 tostaky06
tostaky06's picture

i don't see bitcoin !

Mon, 11/03/2014 - 12:17 | 5406914 Son of Captain Nemo
Son of Captain Nemo's picture

What a great analogy for what is coming!

Mon, 11/03/2014 - 13:11 | 5407132 xavi1951
xavi1951's picture

Thanks for the link.  Very thoughtful analysis.

Mon, 11/03/2014 - 12:26 | 5406950 Rehab Willie
Rehab Willie's picture

I guess it's good thing the robot that replaced me at work doesn't have to eat.

Mon, 11/03/2014 - 15:04 | 5407569 Dre4dwolf
Dre4dwolf's picture

lol if silver went sub 10$ i would dump all my $$$ into it for the hell of it.

Anything approaching 1$ to 1 oz of silver would obviously correct upwards quickly.

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