A tricky month, with volatility spiking and equities under pressure. With signs of a second wave of Covid-19 infections, there were growing concerns that the imposition of new lockdowns might hinder the economic recovery. Equity, bond and commodity markets were all impacted by these concerns.
For equity markets, it was a case of what had gone up the most falling the most. The Nasdaq, which had been defying gravity over the summer months, fell 5.7 per cent. At one stage it was down more than 10 per cent from its early September high. In stock market parlance a 10 per cent drop is classed as a correction. On an intraday basis the S&P 500 also "corrected", but recovered to end the month off just 3.9 per cent. Far East markets were also off, with China down 6.4 per cent and Hong Kong 6.8 per cent. European markets fared relatively well, with the CAC 40 down 2.9 per cent, the MIB -2.4 per cent, the DAX -1.4 per cent and the FTSE All-Share -1.7 per cent. Japan was the one bright spot, with the Nikkei up 0.2 per cent. The FTSE All-World USD Index was down 3.4 per cent, but due to sterling weakness, the same index in sterling terms was off just 0.4 per cent.
In commodity markets, oil dropped back, with Brent crude off 7.5 per cent to $42 a barrel. Industrial metals were weak, with nickel down 5.6 per cent and zinc 4.7 per cent. Copper, or 'doctor copper' due to its supposed ability to predict turning points in global economic growth, was off just 1.0 per cent.