Market Summary Week Ending 12/03/2023

The collapse of Silicon Valley Bank hit market performance on both sides of the Atlantic this week. The technology focused lender shut down after losses in its Fixed Interest Bond portfolio, prompting the biggest bank failure since the global financial crisis in 2009. US regulators took control of the bank on Friday after they failed to secure a buyer, sending shockwaves throughout the banking sector as a whole. The UK subsidiary, Silicon Valley Bank UK Limited, has been bought by HSBC and remains operational.

In the US, turmoil among bank stocks overshadowed a February jobs report which gave some hints that inflation could be slowing. Nonfarm US payrolls rose by 311,000 for the month, the Labor Department reported on Friday. Although above analysts’ expectations, this growth represented a deceleration from an unusually strong announcement made in January.

There were also disappointing economic reports from China, showing modest growth since December (when the country ended its strict domestic Covid policy), which dampened investor expectations of increased growth for the start of 2023.

The FTSE 100 fell 2.20% for the week, the worst weekly performance since September 2022. The UK banking sector also dropped to a two-month low, with investors concerned at the news from the US.

It was also a poor week for the US equity markets as all the major averages capped off the week with losses. The Dow fell 4.44% to post its worst weekly performance since June. The S&P 500 dropped 4.55%, while the Nasdaq lost 4.71%.

Looking forward to the week ahead, UK investors will be keeping a close eye on Chancellor Jeremy Hunt’s Spring Budget, due to be announced on Wednesday (15 March).

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.