Market Summary Week Ending 22/10/2023

There were further disruptions to global markets this week as conflict continued in the Middle East between Israel and Hamas. There were also concerns coming from the US in relation to the selloff seen within the Bond markets, and the continued deadlock in the search for a new Speaker of the House.

Following the Federal Reserve Chair, Jerome Powell, indicating that the central rate will need to remain higher for longer, the yield on a 10-year US treasury rose to above 5%, a mark not seen since 2007.

A higher yield means bond investors are owed larger interest payments but may also be a sign of greater risk. This is a concern for many investors, given the usual reliability and safety of the US long-term treasuries market.

As a result, across the trading week, the Dow Jones finished about 1.60% off on the week, while the S&P 500 shed 2.40%. The Nasdaq was the worst performer this week, dropping 3.20%.

In the UK, investor sentiment was very much similar to that of the US with concerns over the escalation in the Middle East, as well as nerves over the sentiment of central banks in both the UK & US for a higher-for-longer mandate regarding central interest rates.

Furthermore, inflation figures released on Wednesday (18th October) showed that annual CPI figures for the year up to September remained firm at 6.7%, placing further pressure on the Bank of England in its mission to bring inflation down to its longer-term target of 2%.

As a result, across the trading week, both of the major UK indices suffered large losses with the FTSE 100 & 250 losing 2.97% and 2.72% 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 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.