Major loss for global financial markets last October

October's performance was very negative in the global financial markets, with 13 out of 14 losses, some of which were difficult, suggesting a long-overdue correction, while a market posted a positive performance, according to the economic report. As a result of this negative performance, three markets lost their position in the positive region in terms of their performance since the beginning of the year on nine end of September, leaving only 6 profitable markets since the beginning of the year. ;year.

The biggest loser in October was the Japanese market, which lost 9.2% in one month, from 6.1% at the end of September to a loss of 7.3%. Percent by the end of October.

Second biggest loser The Chinese market, which lost 7.7% in October, managed to be at the bottom of the negative territory with losses of 21.3% since the beginning of the year, the third losers of the French market having lost 7.3%, followed by the German market down 6.5%, followed by Great Britain and the United States, down 5.1%. The largest losses concern the main partners trade in international goods and services affected by an open trade war.

Gulf markets have increased somewhat since the beginning of the year, with 11.4% in Abu Dhabi and 9% in Saudi Arabia, while other GCC markets have suffered losses since the beginning of the year. beginning of the year. The Dubai market grew 17.4%, followed by the Muscat market with 13.3%, followed by the Bahrain Stock Exchange, which went from slight gains at the end of September to 0.5% at a slight pace. 1.3% loss at the end of October. .

The global macro changes expected for the month of November will have a significant impact on market performance: first, the psychological state caused by the correction movement in October, after which the performance will fluctuate between negative and positive, but with a result Negative final, The results of the quarterly elections in the United States and their possible effects in situations such as escalation or the continuing decline of the trade war, such as escalation or weakening of the confrontation United States with Iran. On the Brent at $ 80, oil is high due to insufficient supply potential, which means that the negative performance outlook for most markets is greater than the potential for positive performance. Some Gulf markets can reverse this trend as oil prices remain high.

"It is feared that global economic growth will slow as a result of the tightening of US monetary policy, as well as fears of trade wars between the world's two largest economies," the agency said. , The United States and China. In Europe, the markets are worried about the Italian debt crisis and the European Commission's refusal to extend the Italian budget despite its perilous deficit and Britain's difficult exit scenario. 39, European Union. "

Analysts believe that the above-mentioned events are beginning to affect corporate earnings as markets begin to reconsider previous earnings expectations and their tendency to reduce them, such as reducing Stokes 600's European growth expectations. from 9.5% to 6.3%. The Donald Trump administration tax cut at the end of last year has a positive impact on the results of US companies this year, but forecasts for 2019 indicate that the impact This positive impact is decreasing and, as a result, profits are only growing by 8.5%. According to most analysts.

Another explanation for the October correction was that stock prices were higher than their fair values, particularly in the United States, using a profit maximization formula, that is, a share price divided by profits, noting that investment managers see This is justified by the growth recorded by the US economy compared to the weak growth of the European and Chinese economies. In addition, technology, Internet and information technology shares continue to drive traders' optimism, as this sector has become a major driver, not only in the United States but worldwide, because ongoing innovation and expansion in various aspects of public and private life.

According to analysts, selective purchases are now mandatory, because the rise of uncertainty makes heavy purchases risky. As a result, the priority given to certain companies with a strong competitive market position may keep them even in the worst case, and these companies are naturally part of the digital world. As well as companies producing and marketing consumer products, as well as companies in the food and health sector. Analysts believe, however, that luxury goods and services companies are among the sectors that continue to perform well despite all of the above risks.