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Worries on multiple fronts weigh on the markets

November 9, 2023
clock 6 MIN READ

Global equity markets lost ground in October. Investors were concerned about rising long-term U.S. Treasury yields, stronger-than-expected economic data— which reignited worries that the U.S. Federal Reserve (Fed) would resume its rate-hiking cycle—as well as growing geopolitical tensions in the Middle East. Developed markets outperformed their emerging-market counterparts for the month.

North America experienced comparatively smaller losses and was the strongest performer among developed markets in October, led by the U.S. The Pacific region was the most notable market laggard due mainly to weakness in New Zealand and Japan. Eastern Europe posted a double-digit gain and was the top-performing region within the emerging markets during the month due primarily to strength in Poland. In contrast, the Gulf Cooperation Council (GCC) countries—Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates—and Latin America recorded the largest losses among the emerging markets during the month.

Most global fixed-income asset classes lost ground in October. U.S. Treasury securities saw relatively smaller losses and were the top performers within the U.S. market for the month. U.S. mortgage-backed securities (MBS) and corporate bonds were the most notable market laggards. Treasury yields moved higher for all maturities greater than one year, particularly in the intermediate and long segments of the curve. Yields on 2-, 3-, 5- and 10-year Treasury notes rose 0.04%, 0.10%, and 0.29%, respectively, over the month. The spread between 10- and 2-year notes moved from –0.44% to –0.19% during the month, and the yield curve remained inverted.


This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. This information should not be relied upon by the reader as research or investment advice regarding SEI’s portfolios or any stock in particular, nor should it be construed as a recommendation to purchase or sell a security, including futures contracts.

There are risks involved with investing, including loss of principal. International investments may involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles or from economic or political instability in other nations. Emerging markets involve heightened risks related to the same factors as well as increased volatility and lower trading volume. Narrowly focused investments and smaller companies typically exhibit higher volatility. Bonds and bond funds will decrease in value as interest rates rise. High-yield bonds involve greater risks of default or downgrade and are more volatile than investment-grade securities, due to the speculative nature of their investments.

Diversification may not protect against market risk. Past performance does not guarantee future results. Index returns are for illustrative purposes only and do not represent actual portfolio performance. Index returns do not reflect any management fees, transaction costs or expenses. One cannot invest directly in an index.

Information provided by SEI Investments Management Corporation, a wholly owned subsidiary of SEI Investments Company (SEI).


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