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MONTHLY UPDATE

October 2021

 

The month of October saw the Globe’s recovery continue from a growth perspective. As we lead into 2022, monetary conditions are expected to tighten while supply-chain bottlenecks continue to take their toll on the world economy. On the matter of inflation, specifically in the U.S., the Fed remains aware of its potential persistency and is poised to start tapering in November. Worldwide, investors are moving their attention away from Covid-19 and towards the disproportionate global normalisation, elevated energy prices and supply-chain issues.

U.S. stocks gained momentum over the month, rebounding from a bearish September, as a strong Q3 earning season provided support and fuelled positive investor sentiment. More than 80% of companies that reported beat earnings expectations, as companies again showed their ability to maintain profit margins and beat EPS despite rising costs. The S&P 500 closed out the month at record highs, while globally, growth stocks (6.7%) outperformed value (4.6%) and developed market equities (5.7%) surpassed MSCI Emerging markets (1.0%).

European shares climbed near record peaks at month end, while recent Euro area GDP data showed economic activity was close to its pre-Covid level, however, firms were being held back by rising costs caused by supply-chain bottlenecks. In the U.K, the FTSE managed a 1.8% increase over the month, as the stock market continues to remain unfavourable amongst its developed market peers. The labour market is looking strong with unemployment dropping to 4.5% last month, yet inflationary pressures remain on the horizon with the Bank of England’s chief economist Huw Pill saying that he wouldn’t be surprised if UK inflation hit or exceeded 5% in the coming months.

Growth in China seemed to slow over the month of October, with the country posting a disappointing third-quarter GDP figure as well as a weaker than expected purchasing managers’ index. The 6% annual growth rate goal, set by the Government at the start of the year, still remains intact though due to the country’s strong start of 2021.

Mixed news flowed out of South Africa for the month, as rolling blackouts and monetary policy uncertainty weighed on the country’s outlook. The September inflation print came out in line with expectations, yet the pressure is on for South Africa to follow its Emerging market peers in raising rates in the upcoming weeks. The JSE All Share Index had a robust month, posting a 4.95% gain.

Recognising the above market dynamics, we maintain our stance of a measured approach across all our strategies whilst remaining constructive on risk assets. Please refer to the “Monthly Insights” section where we unpack these views in more detail.

Market moves of the month

SA MARKETS LAST PRICE OCT 2021 MOVES YTD MOVE
JSE ALL-SHARE 67 465 4,95% 13,56%
RESOURCE 10 62 990 8,44% 9,40%
INDUSTRIAL 25 87 490 6,73% 12,31%
FINANCIAL 15 13 956 -4,56% 15,72%
SA LISTED PROPERTY 317 -3,22% 16,04%

 

GLOBAL MARKETS  LAST PRICE OCT 2021 MOVES YTD MOVE
DOW JONES 35 820 3,96% 17,03%
S&P 500 4 605 6,88% 22,61%
NASDAQ 15 498 8,41% 20,25%
EURO STOXX 50 4 251 6,14% 19,65%
FTSE 100 7 238 3,69% 12,03%
NIKKEI 225 28 893 4,62% 5,28%
SHANGHAI 3 547 -0,88% 2,14%

 

CURRENCIES  LAST PRICE OCT 2021 MOVES YTD MOVE
GBPUSD 1,37 1,63% 0,13%
USDZAR 15,25 1,28% 3,80%
GBPZAR 20,86 2,68% 3,82%
EURZAR 17,58 0,73% -2,07%

Source: Factset

Explore the chartbook for the month of October.

4th Quarter House View (September 2021)

Latest Insights

Click here to view the 4th Quarter House View.

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