Market Summary Week Ending 28/10/2022

After weeks of unrest and political chaos in Westminster, the start of the week began with hopes of stability moving forward, with through Rishi Sunak winning the Conservative Party leadership campaign and becoming the new UK Prime Minister.

The appointment of the former Chancellor was seen as a stabilising economic force after the turmoil created by the previous Prime Minister Liz Truss’s 44-day tenure.

UK markets responded positively to Mr Sunak taking over with gains being made at the start of the week – the FTSE 100 ended Monday 0.6% up and continued to trade well over the course of the week with an overall gain of 78 points, closing at 7047, a 1.12% rise. The FTSE is now looking likely to close out October with an overall gain, after two successive months of declines.

Over in the US, markets continued to rally over the course of the week after economic data pointed to slowing inflation and increasing consumer optimism.

This led to further investor confidence that the Federal Reserve could break from its trend of 75 basis point interest rate hikes after their next meeting, taking place next week on the 1st/2nd of November.

The major indexes made notable gains. It was the fourth positive week in a row for the Dow Jones. The 30-stock index was up 5.7% this week in its best performance since May. The S&P 500 and the Nasdaq were also up 3.9% and 2.2% respectively for the week.

Looking forward to the week ahead, eyes will be on the Bank of England’s decision on increasing interest rates at their November meeting next Wednesday (3rd). It is widely speculated that interest rates will rise further as part of the banks’ mission to reduce inflation rates.