An October to Remember

Monthly Market Snapshot: October 31, 2022

Highlights

Stocks surged globally in October with the MSCI All Country World Index jumping 6.0%. In the United States, the Dow Jones Industrial Average rallied 14.0% - its largest one-month gain since 1976. Most other developed markets posted strong gains as well, but emerging markets struggled with a 3.2% loss. More stable fiscal policy in the UK, hopes of a downshift in the size of Fed rate hikes, resilient corporate earnings, and an easing of the upward pressure on bond yields each helped to push equities upward. It should not be ignored that this rally is also coming on the back of an extremely poor performance in September.

The strong performance is refreshing, but we hesitate to fully embrace risk with a potential U.S. recession in 2023 still on the horizon. It is quite rare that equity markets bottom before a recession has even begun. Though we do believe that equities have de-risked significantly and that potential opportunities will arise in 2023 as investors begin to look past economic weakness and towards an eventual economic recovery in 2024.

Citi Global Wealth Investments’ (GGWI) Global Investment Committee has repositioned fully invested diversified portfolios towards potentially reliable sources of income – investment grade bond income and dividends paid by industry leading firms.