Despite decent performance of the overall Finance sector in the third quarter, Citigroup C disappointed investors as reflected by its price performance. Shares of the company depreciated 15.6% in the July-September period compared with the industry’s 2.1% decline. The stock also lagged the S&P 500’s rally of 8.5% in the same time frame.

Like many other companies, performance of Citigroup has been affected by the pandemic. However, recent developments regarding faults in the company’s risk management systems, CFO’s comments on disappointing revenue performance in third-quarter 2020 and other legal issues pulled the stock even lower.

Price Performance

Factors in Detail

Citigroup witnessed a major setback when in mid-September The Wall Street Journal reported that the bank may have to face a public rebuke from The Office of the Comptroller of the Currency and the Federal Reserve. This was due to its failure to improve its risk management systems and procedures.

Notably, Citigroup was expected to face a consent order that would make it necessary for the company to take some immediate action and improve its faulty controlling systems.

Further, the stock met with investors’ pessimism when CFO Mark Mason said that he expects additional reserves to be created in the third quarter. Also, overall revenues are expected to decline in the high single-digit range on a year-over-year basis due to the impact of lower rates and reduced levels of business activities due to COVID-19.

The company’s legal encounters during the quarter were another key reason for the stock ending in red. In August, Citigroup had accidently transferred about $900 million to the creditors of renowned cosmetic company, Revlon. The lender was able to recover some of the amount and stated that it was a clerical error.

Further, at the end of September, Citigroup agreed to pay $4.5 million in fine

Wall Street’s five-month-long rally has halted in September, the historically worst-performing month in Wall Street. But this year it was more than that as all the three major stock indexes —  the Dow, the S&P 500 and the Nasdaq Composite — tumbled 2.3%, 3.9% and 5.2%, respectively, to record their worst September since 2011.

At present, economists and financial experts are busy assessing how October will behave — will it see the continuation of a downturn and almost day-to-day fluctuations or will the month turn the wheel and put the market back in a northbound trajectory? Although no clear-cut inference can be drawn at this stage, several important factors, both negative and positive, for October are clearly visible. Let’s discuss these in detail.

Sources of September’s Volatility Persist

The factors that led to severe volatility last month are present in October too. A spike in new coronavirus cases, lack of a vaccine for COVID-19, uncertainty about the second round of fiscal stimulus despite repeated warning from the Fed and several economists, and intensifying geo-political conflict between the United States and China are all present in October.

Moreover, this is the month before the U.S. presidential election scheduled on Nov 3. Historically, stock markets have remained volatile in the month before the election. Market participants generally choose to hold cash instead of investing in risky assets like equities while assessing the economic and financial consequences of the election result.

This is evident from the COBE VIX reading  — popularly known as the best fear-gauge of Wall Street. The VIX indicates market’s expectation of a 30-day forward-looking volatility based on the near-term S&P 500 Index options (both puts and calls).

Notably, VIX is currently hovering in the range of 25 to 30 while it was in the range of 21 to 23

(RTTNews) – Treasuries moved to the downside during trading on Wednesday, more than offsetting the modest strength seen in the previous session.

Bond prices climbed off their worst levels in afternoon trading but remained in negative territory. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 3.2 basis points to 0.677 percent.

The weakness among treasuries came following the release of some upbeat U.S. economic data, including a report from payroll processor ADP showing private sector employment surged up by more than expected in the month of September.

ADP said private sector employment spiked by 749,000 jobs in September after jumping by an upwardly revised 481,000 jobs in August.

Economists had expected employment to increase by 650,000 jobs compared to the addition of 428,000 jobs originally reported for the previous month.

The National Association of Realtors also released a report showing pending home sales jumped to a record high in the month of August.

NAR said its pending home sales index spiked by 8.8 percent to 132.8 in August after surging up by 5.9 percent to 122.1 in July. Economists had expected pending home sales to increase by 3.2 percent.

A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.

Traders were also reacting to comments from Treasury Secretary Steven Mnuchin, who said he is “hopeful” about reaching an agreement with House Speaker Nancy Pelosi on a new coronavirus stimulus bill.

“I say we’re going to give it one more serious try to get this done and I think we’re hopeful that we can get something done,” Mnuchin said during the Delivering Alpha conference presented by CNBC and Institutional Investor. “I think there

SSEC -0.2%, CSI300 -0.1%

HK->Shanghai Connect daily quota used -0.9%

FTSE China A50 +0.1%,

BEIJING/SHANGHAI, Sept 30 (Reuters)China shares closed lower on Wednesday as losses in real estate and materials stocks outweighed optimism from upbeat factory activity surveys, with the markets recording their worst monthly loss since May 2019.

** The Shanghai Composite index .SSEC ended down 0.2% at 3,218.05 and the blue-chip CSI300 index .CSI300 0.1%. For the month, the Shanghai Composite index lost 5.23% and the CSI300 index 4.75%.

** Markets fell in September mainly due to worries over ongoing Sino-U.S. tensions and fluctuations in overseas markets on concerns about a second wave of coronavirus outbreak.

** Shanghai shares of Semiconductor Manufacturing International Corp 688981.SS, China’s largest chipmaker, slid by 25% during the month amid the newly imposed export restrictions by the United States, citing a risk of military use.

** China’s factory activity extended solid growth in September, surveys showed, as the nation’s crucial exports engine revved up on improving overseas demand and underlined a steady economic recovery from the coronavirus shock.

** China’s consumer stocks climbed ahead of Golden Week holiday, as investors expect robust consumption during the break, with the CSI300 consumer staples index .CSI000912 gained 0.59%.

** China’s markets will be closed for the national holiday from Oct. 1 to Oct. 8.

** The start-up board ChiNext Composite index .CNT was higher by 0.44% and Shanghai’s tech-focused STAR50 index .STAR50 was up 2.07%​.

** Investors may actively fish opportunities amid thin trade and external market uncertainties ahead of the week-long holiday, according to China Fortune Securities Co.

** Around the region, MSCI’s Asia ex-Japan stock index .MIAPJ0000PUS was firmer by 0.05%, while Japan’s Nikkei index .N225 closed down 1.5%.

** At 0707 GMT, the yuan CNY=CFXS was quoted at 6.8085 per