More Trick Than Treat in October

Monthly Market Snapshot: October 2020


Globally, stocks slipped in October as investors treaded cautiously ahead of the U.S. presidential election and reassessed the impact of renewed (partial) lockdowns across Europe. In the United States, the S&P 500 fell by 2.8% in the month while the Dow Jones tumbled 4.6%. The tech-heavy NASDAQ finished the month 2.3% lower. European shares were hit particularly hard with the Euro STOXX 50 index off by 8.0%. The 10-year U.S. Treasury yield surged 19 basis points to 0.87% - likely in anticipation of additional fiscal stimulus.

At the time of this writing, the U.S. presidential election remains uncertain, but a divided government appears to be the likely outcome. However, there is still a remote chance of Democrats gaining control of the Senate depending on the outcome of Senate races in Georgia. If runoffs occur in both races there, then those results would likely not come until January 2021. Thus far, equities have been rallying on the premise of less policy change, including corporate taxes.

Citi Private Bank’s Global Investment Committee (GIC) holds an overweight on global equities, particularly small- and mid-capitalization share globally. The Committee is also overweight investment grade corporate bonds and U.S. residential and commercial mortgage REITS.