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These Were The Best And Worst Performing Assets In September, Q3 And YTD

Courtesy of ZeroHedge View original post here.

As we enter the final quarter of an eventful 2019 so far, the month of September was a partial reversal of the fairly extreme price action that we saw in August, according to Deutsche Bank's Craig Nicol. The big winners last month were equity markets while the bottom of the table was dominated by fixed income and precious metals. When it was all said and done, excluding currencies 23 out of the 38 assets in Deutsche Bank's sample ended with a positive total return in local currency terms while 22 did so in dollar adjusted terms.

Looking across the main winners in equity markets last month, topping the table were European Banks which returned +9.0% in local currency terms and +8.1% in dollar adjusted terms. That was the best performance for the sector since March 2017. The small sell-off in rates clearly helped, however the reality is that last month’s performance  only really recouped the prior two months’ worth of losses before that. That being said the sector did have to contend with some disappointment around the ECB meeting outcome. Meanwhile, the general trend across equities was Europe outperforming the US. Indeed the STOXX 600 (+3.7%), DAX (+4.1%), IBEX (+4.9%), and FTSE MIB (+4.0%) all outperformed the S&P 500 (+1.9%) and more notably the NASDAQ (+0.5%) where a combination of sector rotation and trade war and impeachment tensions appear to have weighed more, according to DB. In Asia the Nikkei (+5.7%) outperformed the Hang Seng (+1.9%) and  Shanghai Comp (+0.8%) while EM equities returned +1.9%.

As for the laggards last month, Gold (-3.2%) and more notably Silver (-7.5%) dipped following a few months of strong performance, although Q3 returns were still strong. As for sovereign bond markets, Bunds and Treasuries returned -1.1% and -0.9% respectively however we did see positive returns for BTPs (+1.3%) and EM bonds (+0.7%). As for what that meant for credit, returns were slightly negative with the exception of US HY which returned +0.3%. EUR HY was down -0.1% while the higher duration impact saw US non-fin IG and EUR non-fin IG return -0.7% and -0.9% respectively.

In terms of what that meant for Q3, despite the turmoil of August, there were still 29 of 38 assets in the constituent universe that finished with a positive total return although only 14 did so in dollar adjusted terms owing to the stronger greenback. In local currency terms, the top 3 spots went to Silver (+11.0%), BTPs (+8.3%) and Gilts (+6.5%). Equity markets were fairly mixed with decent gains for the FTSE MIB (+4.8%) and Nikkei (+3.0%), a more muted gain for the S&P 500 (+1.7%), little change for European Banks (-0.5%) and a notable underperformance for the Hang Seng (-7.5%) following the protests in Hong Kong. In terms of sovereign bonds, the big rally in  August meant Treasuries and Bunds finished with returns of +2.5% and +2.1% respectively while in credit returns were also positive, with US outperforming EUR and IG outperforming HY.

August meant Treasuries and Bunds finished with returns of +2.5% and +2.1% respectively while in credit returns were also positive, with US outperforming EUR and IG outperforming HY. Finally, the picture YTD remains very strong with 37 out of the 38 assets still delivering a positive total return in local currency terms and 36 in dollar adjusted terms. Copper (-2.0%) still occupies last spot with the Greek Athex (+44.2%), FTSE MIB (+25.6%) and Russia’s MICEX (+22.8%) holding the top 3 spots. DM equities broadly are up 10-20% while sovereign bond markets are led by BTPs (+14.1%) with Treasuries and Bunds returning +8.0% and +6.4% respectively. Finally credit markets are up between 10-15% in the US and 5-10% in EUR.

 


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