US interest rates are likely to remain higher for a longer period owing to stronger than predicted US GDP and employment growth. US GDP grew by an annualised 4.9% in the third quarter, and there was an increase of 336,000 jobs. The US Core CPI remained steady in September at 3.7% compared to the previous month. Additionally, the Federal Reserve indicated that there may be one more interest rate hike before the end of the year. As a result, the S&P 500 in the US declined by 2.1%, but still it performed better than international markets.

In October, both the New Zealand and Australian central banks decided to keep interest rates unchanged. The Reserve Bank of New Zealand stated that rates will remain restrictive for the foreseeable future. The S&P/NZX 50 index in New Zealand decreased by 4.8%, and the S&P/ASX 200 index in Australia decreased by 3.8%.

Technology stocks performed better than other sectors, which supported growth stocks which outperformed value stocks. Fixed income investments struggled due to expectations of higher interest rates. With global tensions rising due to conflicts in the Middle East and Ukraine, investors turned to gold as a safe-haven asset. Gold prices increased by 7.5% during the month.

Some significant events in October include:

• On October 7th, Hamas launched an attack on Israel, leading to a full-blown war with a high death toll on both sides.
• The Labour-led government in New Zealand suffered a loss in the general election, but the right-leaning government failed to secure a majority on the night. This resulted in Winston Peters returning as kingmaker, [JR1] and the Green Party and Te Pāti Māori had their best results.
• Microsoft completed its acquisition of Activision Blizzard for $68.7 billion, despite facing opposition from global competition regulators. The deal closed, but the US Federal Trade Commission intends to sue.