United States

Markets increasingly volatile through October


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Domestic and international equity indices finished lower for the month with the exception of emerging markets, which was fairly flat. Most global fixed income indices experienced negative returns. With the Federal Reserve remaining on the sidelines until after the election, markets have become increasingly volatile as uncertainty reigns.

For the month, the S&P 500 Index fell 1.8 percent, while the Russell 2000 Index of smaller companies declined by 4.8 percent. The utilities and financials sectors were the only positive performers, while the telecommunications, health care and energy sectors were the weakest performing sectors. Across market capitalizations, small-cap securities generally underperformed their large- and mid-cap counterparts. Across styles, value outperformed growth across all market caps.

U.S. fixed income markets were generally negative for the month. Short-maturity Treasuries outperformed longer-dated issues as the yield curve steepened. Investment grade corporate securities also fell as financial-, utility-, and industrial-related issuers were negative for the month. Lower quality, higher yielding corporate securities were the only positive sector throughout the month. Municipal bonds were generally flat to slightly negative despite consistent new issue volume.

International markets were mostly lower as the MSCI EAFE Index declined 2.0 percent. Among the largest European markets, the U.K. fell 5.2 percent, while Germany and France fell by 1.5 percent and 0.6 percent, respectively. Within the Pacific region, Japan rose 1.3 percent, while Australia fell 2.1 percent. In the emerging markets, the MSCI EM Index ended 0.3 percent higher and remained resilient against the declining commodity index.

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