Financial Markets Showed Mixed Results in Q3 Amid Trade Tensions and EM Crisis
The global trade tensions, emerging market (EM) crises and central banks’ policy tightening showed significant impact on the financial markets in the third quarter of 2018. US stock market and oil were the big financial market winners. Brent crude oil gained 3% in the July-September period and hit 4-year highs above $82 a barrel. The Wall Street's S&P 500 index rose by more than 10% since January and gained 7.7% in Q3.
Shanghai "A" shares (SSEA) lost 20% on the year and 5.5% in the third quarter. MSCI's emerging stocks fell by 1.7% this quarter, down 14.7% this year. Shares in European banks are also sharply lower this year.
Meanwhile, the US dollar failed to make much headway following its 5% second quarter surge but it held on to those gains, keeping up the pressure on emerging markets. Turkish lira lost 23.5% this quarter, and was down 37% year-to-date. Still, Argentina's peso led the falls, having lost 50% over the year and 27% in Q3.
Gold was down 5.6% on the quarter and 9% on the year. Copper lost 6.7% in Q3 and 14% this year.