Monthly Market Commentaries

Global shares and bonds fell in October amid worries that US interest rates may remain higher for longer, given still strong inflation and robust economic data. The geopolitical situation was another concern for investors amid the conflict in the Middle East, the continuing war in Ukraine, and tensions between the US & China. The price of gold rose, as investors sought safe haven assets.

After strong gains in the first half of the year, global equities posted negative returns in Q3 2023. With the exception of the UK, global government bond prices declined as yields rose. Commodities rallied as oil production cuts were announced by Saudi Arabia and Russia.

The deteriorating economic data from China and renewed concerns over the weakness of its real estate sector weighed on global equities, which subsequently fell over the month. Emerging markets notably under performed developed markets due to negative investor sentiment towards China. Government bond yields continued to rise meaning their prices fell. However, the yield rises were less than in previous months, and in actual fact, global bonds (government and corporate) overall, produced a positive return.

July was a positive month for global equities. In contrast to the year to date, emerging markets outperformed developed market equities, as Chinese authorities pledged measures to boost and support the economy. Domestic based (smaller) companies also tended to perform well in their respective indices. Equity gains were further supported by the surprisingly lower inflation readings in several developed markets, including the US and the UK.

Global equities gained in Q2 2023, with the advances led by developed markets, notably the US, where investor enthusiasm for Artificial Intelligence (AI) boosted the technology sector. However, emerging markets lagged behind.

Major central banks raised interest rates during Q2 2023, although the US Federal Reserve elected to “pause” their rises in June. Government bond yields therefore rose, and consequently prices fell.

There was a mixture of returns within equity markets as positive investor sentiment for Artificial Intelligence (AI) stocks and robust survey data from the service sector boosted US, Japanese and some Asian indices. However, disappointing manufacturing survey data and falling commodity prices saw indices fall in the UK, Europe, China and Emerging Markets. Market volatility caused by the US debt ceiling negotiations subsided after it was clear a deal would be struck. Government bond yields continue to rise, which meant prices fell.