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Market Update: Nov 4, 2012

John Gorlow | Nov 04, 2012

October Review

Hurricane Sandy forced Wall Street to close on October 29, the anniversary of the 1929 stock market crash. It was the exchanges' first weather related closing in 27 years. The hurricane and its after effects led to a two day shutdown. Yet despite the destruction wrought by the storm, when US Stock markets re-opened, a relatively normal day unfolded. The Dow Jones Industrial Average and the Nasdaq composite index both fell less than 1%. Meanwhile, the S&P 500 ended on the final trading day of the month, fractionally higher.  

Global equity markets declined overall in October. The MSCI World Index fell 0.65%. In the US, the S&P 500 lost 1.85%, an indication that the economy could be losing some steam. US Large cap stocks outperformed small cap stocks and US value stocks outperformed US growth stocks.  In foreign markets, international developed (MSCI EAFE) equities gained 0.83% and Emerging Market (MSCI EM Index) equities declined 0.61%.  

As with most other assets, monthly commodity returns came under pressure. The Dow Jones AIG Commodity Index dropped 3.85% and the Goldman Sachs GSCI fell 4.07%.  Precious metals, as measured by the Dow Jones UBS Gold Index, were also weak, falling 3.09%.

Overall, global stock markets finished October with strong year-to-date performance. The MSCI World Index returned 12.82%. The S&P 500 returned 14.29%. The MSCI EAFE Index returned 11% and the MSCI Emerging Market Index returned 11.30%.

Core fixed income markets were relatively flat for the month. The Barclays Aggregate Intermediate Term Index gained 0.05%, the Merrill Lynch US Treasuries Inflation linked index gained 0.91%, and Municipal bonds as represented by the Barclays Municipal Bond Index advanced 0.3%.

By the time you read this comment, the 2012 presidential election will almost be decided. Regardless of who wins, let’s hope that our representatives will break through the partisan dysfunction and make Washington work towards progress on jobs, the housing crisis, budget deficits, free-trade and regulatory reform.


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