Market Summary Week Ending 20/08/2023

Global equity markets continued their struggle in August with the majority of the major indices continuing recent slides as investor optimism seen in July appears to be wavering, alongside continued concerns over the state of the Chinese economy, following disappointing economic data that forced the Chinese Central Bank to cut interest rates in a bid to boost growth.

In the UK, positive news came through the most recent CPI data release on Wednesday (16 August) showing that CPI for the 12 months to July had fallen further to 6.8% in a further drop to the rise in prices seen over the previous months.

However, this was marred by a sharp decline seen in retail sales as poor weather and persistent inflation saw cost-conscious shoppers spend more cautiously. Retail sales volumes plunged 1.20% last month, double the 0.6% drop forecasted by economists, sparking further pessimism in investors about the potential for a recession.

As a result, across the trading week, both the FTSE 100 and 250 both suffered weekly losses of 3.20% and 3.50% respectively.

In the US, a tumultuous few weeks has continued with further losses by all of the major indices. Initial enthusiasm around a resilient economy and moderating inflation seeming to have tempered over the past few weeks with further concerns over the amount of time that interest rates will remain inflated as well as the fresh concerns of the Chinese economy, in particular the highly-leveraged property sector.

Over the trading week, the Dow Jones ended the week lower by 2.2%, its worst since March. Meanwhile, the S&P 500 and the Nasdaq both fell 2.1% and 2.6% respectively, with both indices suffering a third straight week of losses.

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.