Equities posted negative returns in October as fears of a slowdown in the recovery materialized with onerous restrictions being re-imposed amid a resurgence in COVID-19 cases. Global equity markets fell back into negative territory year-to-date after giving up part of their third quarter gains. A particularly bad month for Europe and the UK pushed global equities over the edge, while US equities still retained a low single digit gain for the year.
Global economic data for the third quarter is showing a massive rebound from a similar sized economic collapse in the previous quarter, but forward looking data is already indicating another slowdown ahead, especially across Europe and the UK as restrictions there were further tightened towards the end of the month and have started to take an economic toll. China stood out for having returned to solid growth and is expected to be the only major economy this year to see positive year-on-year GDP growth.
COVID-19 cases have continued to soar with the UK and Europe once again turning into the new epicenter while cases in the US have also returned to record highs. Lockdown measures of varying degrees were implemented across the Eurozone and UK that could lead to Q4 GDP growth turning negative again, albeit to a much lesser degree than during Q2.
Mercer's Monthly Market Monitor provides an overview of global financial markets.
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