A Rock'n October

Monthly Market Snapshot: October 2019


Stocks experienced a broad-based rally in October as geopolitical risks eased and recession fears ebbed. Although U.S. stocks experienced a strong month with the S&P 500 marching 2.0% higher, international markets performed even better with European shares jumping 3.3% and Japanese shares surging 4.8%. Emerging markets added 4.1%.

Fears of a U.S. recession have not completed faded, but recent economic data suggest that the U.S. economy may be starting to stabilize. An above consensus jobs report and solid consumer spending in the third quarter support the theory that the U.S. consumer remains the bulwark against a U.S. recession. Business investment is likely to remain weak, but investors should feel more confident about the state of the U.S. economy following October’s data releases.

Citi’s Private Bank’s Global Investment Committee (GIC) is maintaining a neutral position on global stocks, including U.S. large capitalization shares. Following a sharp rally in global bond yields, the Committee is maintaining a modest underweight on global fixed income as we see lower returns in the year ahead. Preferred asset classes include emerging Asian equities and short- and intermediate- duration U.S. Treasuries.