Market Summary Week Ending 24/09/2023

There were struggles across global markets this week, with all the major central banks signaling to the markets that interest rates would remain higher for longer, in the long running battle to tackle inflation.

This follows the Bank of England’s decision to hold the central rate at its current level of 5.25% following a surprise decrease in UK CPI for the 12 months to August, dropping to 6.70%. Looking forward, both Goldman Sachs and J.P. Morgan expect the Bank of England to keep rates at 5.25% in November after the central bank held interest rates steady this week; but signaled elevated interest rates for longer.

As a result, across the trading week, both of the major indices struggled with weekly losses of -0.36% and 0.88% for the FTSE 100 & 250 respectively.

In the US, the Federal Reserve followed suit by holding interest rates at the same level in a move that was priced in the by the markets. However, documents released on Wednesday (20th) appeared to show that the Federal Reserve’s bias is for a more restrictive, higher for longer approach to ensure inflation is controlled. Further projections from analysts have one more increase for this year, with cuts to then follow in 2024 and onwards.

As a result of the expectation of prolonged higher rates, the S&P 500 and the technology-heavy Nasdaq Composite dropped 2.9% and 3.6% respectively. That marked the third straight negative week and the worst weekly performance since March for each of the indices. The Dow Jones also slid 1.90% for the week.

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.