S&P 500 slips into correction + US stocks are looking at their worst October since 2018

Fears of further rate hikes, geopolitical tension push US stocks into correction: The escalations in Gaza, soaring bond yields, and disappointing 3Q earnings have triggered a “slow-motion selloff” in US stocks that has pushed the benchmark S&P 500 into correction after losing more than 10% from its peak in July, the Financial Times wrote. This comes only days after the tech-dominated Nasdaq Composite slipped into correction following a series of less-than-optimistic earnings from tech giants. This is putting US stocks on course or their worst October in five years, according to Bloomberg.

Benefiting from the volatility are safe haven assets, like gold which is on track for its biggest monthly gain since 2020, breaking the USD 2k / oz threshold over the weekend, according to Bloomberg. Investors have also been looking at the USD — which saw a 0.4% increase against basket currencies over the past week — and government bonds — which last week saw yields jump to a 16-year high.

Don’t lose all hope: “Sentiment is generally negative . . . but stress metrics haven’t moved that much, it’s been relatively orderly,” Citigroup’s Stuart Kaiser said. “It’s easy to get distracted by some of the moving parts … but the bottom line is that the underlying macro picture is still strong.”

THE CLOSING BELL-

The EGX30 rose 0.6% at Thursday’s close on turnover of EGP 5.1 bn (122.5% above the 90-day average). Foreign investors were net buyers. The index is up 59.4% YTD.

In the green: TMG Holding (+9.3%), Heliopolis Housing (+6.1%) and Palm Hills Development (+5.6%).

In the red: Mopco (-6.0%), Abu Qir Fertilizers (-4.4%) and Oriental Weavers (-4.1%).