Just How Bad Was October 2008 ?

Not too shabby a week — plus 11% across the major indices, with some areas even stronger. Of course, that comes from deeply oversold levels, with stocks peak trough down 27% within October. The key question going forward is whether or not this past week’s snapback rally has legs. But rather than guess about that, let’s look at some of the more intriguing data points from October 2008.

Gee, I picked a bad month to stop sniffing glue:

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EQUITIES:

• October was the worst month for the Standard & Poor’s index of 500 stocks in 21 years — since the 1987 stock market crash. (NYT)

• The Dow dropped 14% drop over the past four weeks — the biggest October decline since 1987, when the crash sent markets down 23% for the month. The S&P 500 was down 17%, and Nasdaq fell 18%. This ranked as the 15th worst monthly decline for the Dow Industrials since 1900.

• Global equities in October shed $9.5 trillion. (Barron’s)

• October 2008 was the most volatile in the 80-year history of the S.& P. 500. (see NYT chart, at right)

• We had the most down days in a single month since August 1973. (Marketwatch)

• Compare 3 recent SPX Bear Markets: -46% from October 2007; Compare that with 1973-74 down 48% over 23 months. The 2000-03 bear was 49 percent over nearly 3 years.

• The S&P 500 had the most volatile month since November 1929 (1% moves higher or lower).

• October had two days where the indices were up more than 9% — the 10th time this has occurred over the past 80 years. (NYT)

• During an eight-day losing streak at the beginning of the month, the Dow lost 2,396 points.

• Consider days with 4% moves up or down: None from 2003 through 2007; Three throughout the 1950s and two in the 1960s. October 2008? 9 days with four percent plus or minus. That edges out September 1932’s record of 8. (NYT)

• The Dow had its second-biggest point drop on record, of 733 points.  The Dow posted two of it biggest point gains, climbing by 936 points (October 13th) and 889  (October 28th)

CURRENCY:

• US dollar gained 14.3% against the euro, 22.3% against the Canadian dollar, and 31.8% against the Australian dollar.  This is the fourth best month on record (using data going back to 1967).  March ’91, November ’78, and October ’82 are the only three months where the US Dollar saw bigger gains. (Marketwatch)

BONDS:

• Perhaps the credit crisis is finally easing: Overnight Libor dropped to its lowest levels in 6 years, falling to 0.73125%, down from 5.09% on October 9th. (Bespoke)

COMMODITIES:

• Copper and Crude oil had their worst one-month losses ever (Barron’s)

• Crude-oil futures lost one third of their value, falling 33% during the month. This was their biggest monthly percentage drop since trading began in 1983. Average retail price for gasoline fell 31%, ($2.504 a gallon), down 14% from a year ago.

• Gold lost 18% for the month — its worst monthly drop since 1980.

• Wheat had its largest monthly decline in 22 years; Copper and Aluminum had their largest drop in more than 20 years; Sugar for its biggest monthly fall in a decade. (WSJ)

GLOBAL BOURSES:

• Emerging-market bonds popped 8% over Treasurys — a six-year high.

• Market cap losses: Standard & Poor’s global indexes lost $6.79 trillion (September’s 2008 lost $3.4 trillion)

• European stocks rose 12% (Dow Jones Stoxx 600 Index) — their biggest weekly gain since 2001. (Bloomberg)

• MSCI Emerging Markets Index fell nearly 30% — the worst month since August 1998. Thats a loss of about ~ $900 billion. (Marketwatch)

• Japan’s Nikkei 225 hit a 26-year low.

• Iceland’s exchange crashed 81% for the month. (Marketwatch)

• Russia had the world’s most volatile index, with 17 days with of more than four percent moves in the Micex index. For the month, the Micex lost 28.8%, but had a weekly gain of 42.5%. (NYT)

• Argentina’s Merval and Brazil’s Bovespa indexes were set to make their biggest one-month percentage losses since August 1998, with the Merval falling 37% and the Bovespa losing 25%.

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Source:
So how bad was October? One for the history books
Laura Mandaro & Nick Godt
MarketWatch, Oct. 31, 2008
http://tinyurl.com/5p7mdl

OVERNIGHT LIBOR AT LOWEST LEVEL IN YEARS
Bespoke Investments, October 30, 2008
http://bespokeinvest.typepad.com/bespoke/2008/10/overnight-libor-at-lowest-level-in-years.html

A Monthlong Walk on the Wildest Side of the Stock Market
FLOYD NORRIS
NYT, October 31, 2008
http://www.nytimes.com/2008/11/01/business/01chart.html

European Stocks Post Biggest Weekly Rally Since 2001
Michael Patterson
Bloomberg, November 1 2008
http://www.bloomberg.com/apps/news?pid=20601087&sid=a.QaMNs7UGxk&

Commodities Take Hit in Month
TOM SELLEN
WSJ, NOVEMBER 1, 2008
http://online.wsj.com/article/SB122544101179287615.html

MONTHLY PERFORMANCE FOR OIL, DOLLAR, DOW
Bespoke Investments, October 31, 2008
http://bespokeinvest.typepad.com/bespoke/2008/10/monthly-performance-for-oil-dollar-dow.html

Deflated Expectations
DEBBIE CARLSON
Barron’s COMMODITIES CORNER NOVEMBER 3, 2008
http://online.barrons.com/article/SB122549287954389335.html

Stocks Gain as Brutal Month Ends
Michael S. Derby and Howard Packowitz
WSJ, OCTOBER 31, 2008, 10:36 P.M.
http://online.wsj.com/article/SB122544813555487665.html