Market Updates

Equity markets continued their November strong run this week. The rally was supported by inflation for the US and UK both falling more than expected

The strong rise in equity prices since the start of November was briefly brought back down to earth last week following a Thursday speech by US Federal Reserve (Fed) Chairman Jerome Powell.

Last week was one of two halves. October closed with gold prices rising as investors fled to safe-haven assets amid geopolitical uncertainty and expectations of further rate increases, while equities continued the downward trend that started in the summer.

Equity prices continued to fall across the board last week due, in part, to mixed company earnings reports and ongoing geopolitical concerns.

So far, the latest bout of geopolitical uncertainty, triggered by the Israel-Hamas conflict, has had a moderate and short-lived impact on markets.

Growth concerns weighed on markets during the first part of last week as data revealed a slowing in economic activity.

After interest rates rose from near 0% to around 5% in developed countries, major central banks have now signalled rates will plateau soon, in line with our core view.

Risk assets continued their progression last week and generally outperformed defensive assets like bonds or gold.

Last week was relatively quiet regarding economic releases and the same can be said for equity and bond markets, which ended the week only slightly negative, while the US dollar rose.

Equities and developed market government bonds both came under pressure at the start of August, before recovering slightly towards the end of the month.

It hasn’t been a strong week for China. Retail sales, industrial output, and investments slowed more than expected last week; Hong Kong’s Hang Seng index also entered bear market territory.

Last week, the main headline was the downgrade of the US long-term rating to AA+ from AAA by Fitch Ratings, sending 10-year US Treasury yields temporarily to their highest levels in 2023, at some point reaching close to 4.2%.