Accounting for October.
It has been the most feared 31 days in the past for investors, the crashes of 1929 and 1987 both happened in the month, and two years ago global financial markets also suffered a terrible collapse after Lehman Brothers failed in September 2008.
Last year it was recovery, this year October was buoyant, bubbling even.
But improved economic conditions had nothing to do with it, October was good for investors because of expectations the US Federal Reserve will pump hundreds of billions of dollars into the US (and the rest of the world) economy starting midway through this week.
Monetary policy easings in Japan have also helped, even though some economies in Asia have started slowing (China, Japan and South Korea).
Without that factor driving markets, October would have been a miserable 31 days.
But it’s now over and the tally is:
The MSCI World Index of shares in developed nations gained 3.7%; the MSCI index for Emerging Markets rose 2.8%, gold rose, cotton, wheat, corn and soybeans rose, driving the Thomson Reuters/CRB Index of commodities climbed to a two-year.
Comex December copper slid 5.5 USc, or 1.5%, on Friday to $US3.7325 a pound. That left copper up 2.2% for the month.
The boom in US treasuries turned (they lost 0.4% in the month), the US dollar sank for a sixth month and the Aussie dollar touched parity, briefly.
For the month, the Dow logged its best October since 2006, rising 3%. The S&P gained 4%, its best October since 2003; the Nasdaq jumped 6%.
The Australian market was up 1.7% and is up nearly 6% from the start of September.
Gold was up 3.7%, to end at $US1,357.60 an ounce in October, its third straight monthly gain, and touched a record $US1,388.10 on October 14.
Silver surged 13% as it became the ‘poor investor’s new gold’ with buyers trying to boost its price higher as gold got more expensive and the US dollar weakened.
Oil rose 1.8%, to end at $US81.43 a barrel in New York, adding to September’s 11% jump; cotton was up 23% and hit a record $US1.305 a pound late in the month.
Corn futures rose 17%, to $5.82 a bushel in Chicago as speculation mounted that the US Department of Agriculture may cut its output estimate for the domestic crop again.
That would be the second in six weeks.
Soybean futures jumped 12% in October as China took advantage of a weak US dollar to step up purchases. Soybeans are now up four months in a row.
December wheat fell in Chicago on Friday to settle 1% lower at $US7.1725 a bushel.
Wheat prices still advanced 6.4% last month, thanks to continuing fears about the health of the Russian crop and worries the new US crop was not doing well ahead of the onset of winter.
Raw sugar futures in New York jumped 1.4% on Friday to settle at 29.12 USc a pound, the highest since early February.
That left raw sugar prices up 8.1% for the month.
And New York coffee futures (Arabica) jumped 3.85% on Friday to end at $US2.0345 a pound.
Coffee futures jumped 11% in October and are up 50% so far in 2010.
In London Robusta coffee futures jumped 14% last month.
Yields on 10-year Treasuries rose nine basis points, or 0.09%, to 2.60% and they increased 0.30% to 3.98% for 30-year bonds (up from 3.58% at the end of September).
The dollar weakened against 14 of 16 of its most-traded peers last month, dropping 2.3% to $US1.3947 against the euro and 3.9% against the yen.
The Dow added 4.54 points, or 0.04%, on Friday to end at 11,118.49. The Standard & Poor’s 500 Index fell 0.52 point to 1,183.26 and the Nasdaq Composite Index was up a tiny 0.04 point at 2,507.41.
Global stocks edged higher, with European shares posting a second consecutive monthly gain.
The Stoxx Europe 600 Index fell 0.3% last week which left it up 2.4% for the month.
London’s Footsie fell 1.2% last week, but was still up 2.3% for the month.
The MSCI Asia Pacific Index fell 0.4% last week, the second weekly fall in a row after the 0.9% drop the week before.
But the Index still finished October up 2.4%, following September’s solid gains.
Japan’s Nikkei share average fell 1.8% on Friday to a one-month low.
And it lost 1.8% for October as it became increasingly clear the economy was slowing once again.
Hong Kong’s Hang Seng Index fell 1.8% and South Korea’s Kospi Index slipped 0.8% but China’s Shanghai Composite Index rose 0.1%.
In Australia the ASX200 Index was down 23.3 points, or 0.5%, at 4661.6 points, while the broader All Ordinaries Index fell 19.3 points, or 0.4%, to 4733.5.
For the week, the ASX200 rose just 0.3%.
The Singapore Exchange fell 7.8% to S$8.80 this week after launching a bid for the ASX, which rose 6.4% to $A37.18.
But October was another winning month – the third in the past four – with the benchmark index up 1.7%, down on the 4.1% rise in September.
