During October, the equity markets performed positively, with the Mexican Stock Exchange, the Dow Jones and the S&P 500 being the main winners; these indices posted gains of 11.87%, 13.95% and 7.99%, respectively. On the other hand, the performance of companies in the technology sector was positive, although to a lesser extent, increasing only 3.90%. This sector was affected by lower than expected quarterly reports and continued increases in interest rates.

The Chinese market, on the other hand, dragged the rest of the emerging countries into negative performance in the period due to the real estate crisis in that economy, zero tolerance policies against COVID 19 and concerns about the concentration of power following the Chinese Communist Party Congress.

In economic news, more than 260,000 jobs were created in the U.S. economy during the month, bringing the year-to-date total to ~3.8 million. This report, despite coming out higher than expected, raised the unemployment rate from 3.5% to 3.7%, which was a catalyst for the market by reducing pressures on the labor market and consequently inflation expectations. At its October meeting, the FED decided to increase its benchmark rate by 75bp to a range of 3.75-4.00%, which was in line with estimates. Although the speech continued to be restrictive, the effect was not enough to interrupt the bullish inertia of the month. In Mexico, meanwhile, GDP surprised on the upside in its third quarter reading, bringing growth estimates for 2022 to around 2.5%. Additionally, the peso continued to maintain its strength against the dollar in an environment where major currencies have weakened to levels not seen in decades. Attractive sovereign debt rates, healthy public finances, record levels of remittances, as well as nearshoring, continue to be the main drivers.

In Grupo Inversión we have maintained our long-term strategic vision unchanged, as well as our exposure to Equities, only making tactical buy/sell and mainly exchange rate movements. As for Fixed Income, we remain positioned in short duration instruments, waiting for positive inflation readings, which will generate greater clarity and a better entry point in terms of taking longer term positions.