USD October Market Performance

Noteworthy Developments

Equity markets (MSCI ACWI Index) declined by 3.0% in USD during October with declines driven primarily by rising interest rates, especially in the US.  

Global Equities

Global equities were down 3.0% with widespread declines across major regions.   The S&P 500 was down 2.1% as longer-term Treasury yields continued to increase following strong economic data and large volumes of Treasury bond issuance.  The US 10-year Treasury bond rose by 32bps from 4.57% to nearly 4.89% over the month.  International developed stocks (MSCI EAFE Index) were down 4.1% in USD as Eurozone macroeconomic data continued to weaken, especially in Germany.  Emerging market equities (MSCI EM Index) were down 3.9% with Chinese equities (MSCI China Index) down 4.3% and Korean equities (MSCI Korea Index) down 7.0%.  Globally, growth stocks modestly outperformed value stocks (-2.6% vs. -3.5%).  All sectors delivered negative performance on the month, with relatively comparable returns from cyclicals vs. defensive sectors.   Technology (-1.0%) was the best performing sector while consumer discretionary (-4.8%) was the worst performer.

Fixed Income

The benchmark US-Aggregate Bond index was down 1.6% on the month.  As longer-term interest rates continued to increase during the month, US Treasuries (65% of the benchmark) were down 1.2% and investment-grade corporate credit (roughly 25% of the index) was down 1.9%.  High-yield bonds were down 1.1% as lower bond prices resulting from increases in Treasury base rates offset coupon payments, while spreads also modestly widened.   Leveraged loans were flat on the month as high coupon income was offset by widening spreads.

Alternatives

The HFRX Global Hedge Fund Index was down 0.8% for the month.  Most strategies were down roughly 1.0% for the month.   Global macro / trend following strategies performed best (+0.3%) and convertible arbitrage strategies performed worst (-3.0%).

Commentary

Alphadyne: +3.0% in USD

Outperformed HFRI Global Hedge Fund Index (-0.8%) with strong performance driven by both directional and relative value interest rate bets. 

Eminence:  -7.7%: in USD

Underperformed the MSCI World (-2.9%) and S&P Midcap indexes (-5.3%) largely due to significant weakness in cannabis equity holdings (-20% to -35%) and other large positions such as Zillow (-22%).