Market Summary Week Ending 29/01/2023

Across the UK trading week the FTSE 100 ended 0.9% lower. This marked the first weekly loss of the year against a backdrop of growing worries about a recession and major central banks staying the course despite signs of a moderation in inflation.

In the US, stocks closed the week in a strong position and capped off a winning week fuelled by positive economic growth and continued strong earnings seasons. The personal consumption expenditures price index (excluding energy and food) showed prices rose 4.4% from a year ago, the Commerce Department said, and in line with economists’ expectations. A better-than-expected fourth-quarter gross domestic product report released on Thursday also raised hopes that the Federal Reserve may slow the pace of increasing interest rates.

Strong performers in earnings season saw Tesla, the electric car manufacturer, rise 11% on Friday, and more than 33% for the week, after reporting record revenue. This marked Tesla’s best weekly performance since 2013 and was a strong factor in the continued surge of the Nasdaq in 2023 so far. American Express also rose 13.3% across the week following strong earnings and revenue, exceeding analysts’ expectations.

As a result, all the major US indices posted a positive week and are on pace for a month of gains. The Nasdaq rose 4.32% and closed out its fourth week of gains. It is on track for its best monthly performance since July. The S&P 500 and Dow Jones also added 2.47% and 1.81% respectively this week. So far this year, markets have bucked 2022′s selloff trend. The Dow is up 2.5%, while the S&P has gained 6%. The Nasdaq has surged 11%.

Looking forward to next week, The Bank of England will hold its first Monetary Policy Committee of 2023, and although inflation concerns have been slightly alleviated through consumer prices falling to 10.5%, it is still widely expected that the bank will continue to raise interest rates.

The US Federal Reserve also have their first meeting of the year next week. There is optimism that any increase in interest rates will be lower than those seen across 2022 after further economic data released for January showed that US CPI has appeared to pass its peak. Data from the past two months has shown CPI continuing to decline with further reductions expected moving forward into 2023.

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.