Market Summary Week Ending 16/10/2022

This week closed with the announcement that Kwasi Kwarteng had been relieved of his duties as Chancellor of the Exchequer following the tumultuous response by financial markets to the recent mini budget and the subsequent rhetoric from the Chancellor and Prime Minister.

Liz Truss also announced a U-turn on Corporation Tax, with a rise in the tax rate from 19% to 25% from April 2023 now going ahead. The Prime Minister stated that this will raise £18 billion per year moving forward and it was seen as move address market concern about the government’s ability to fund the other tax cuts included in the mini budget.

Markets were buoyed by the news of Kwarteng leaving his post, climbing up to 6975 points after news was announced, but fell sharply as a result of the Prime Minister’s news conference, falling to 6859 points at the close, but did finish the week’s trading session 0.12% higher from 6851 points.

Meanwhile in the US, equities within all the major indices slumped on Friday following a turbulent week of trading as investors reacted to the news of rising inflation rates and expected increases in interest rates by the Federal Reserve.

The Dow Jones fell 403.89 points, or 1.34%, to end the day at 29,634.83 points however the index was up 1.15% on the week. Both the S&P 500 and the Nasdaq ended the week lower, falling 1.55% and 3.11%, respectively.

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 intended as commentary 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 invested.