Market Summary Week Ending 07/05/2023

On Wednesday, the Federal Reserve announced that it would be increasing the interest rate within the US by 0.25%, from 5% to 5.25% which has seen its tenth consecutive rate increase over the past 12 months in a further move to reduce inflation down from its current level of 5%.

Whilst this move was anticipated by financial markets, comments made by Federal Reserve Chair Jerome Powell stating “We on the committee have a view that inflation is going to come down not so quickly and it will take some time, if that forecast is broadly right, it would not be appropriate to cut rates this year’’ have dampened investors’ optimism that rates would begin to come down in Q3 or Q4 of this year and further heightened fears of a recession and loss of confidence within the banking sector, following the recent bailouts of both Silicon Valley and First Republic Bank.

As a result, across the trading week, The Dow Jones and the S&P 500 logged their worst weekly performance since March, with respective losses of 1.24% and 0.8%, whilst the Nasdaq managed to eke out a small weekly gain of 0.07%.

In the UK, The FTSE 100 went into the coronation weekend with a boost seen in Friday’s trading, with gains made in both the Energy and Financial Sectors, in a positive end to what has been a tumultuous week, through further interest rate rises seen in the US and renewed concerns about the long-term stability of the global banking system. Despite the positive day seen Friday, across the trading week, the FTSE 100 ended trading down by -1.04%

Looking forward to the week ahead, The Bank of England will announce its latest interest rate decision, with analysts’ expectations for a further rise of 0.25%, bringing the overall interest rate up to 4.5%, in line with other major central banks.

 

Please note for this weekly summary, we focus on the major indices within the financial markets such as the FTSE 100 (UK) and the Dow Jones and NASDAQ (US) to provide a factual account of what has happened within a certain index. Performance figures quoted are factual from the previous week’s trading and this summary is for commentary purposes only. 

The performance of these indices is not a representation of an individual fund or portfolio. Past performance is no guarantee of future returns. The value of your investment can go down as well as up. You could get back less than you originally invested