Weekly Update – week ending 22/01/2023

UK Consumer Price Index (CPI) inflation figures were released on Wednesday and confirmed the anticipated fall in the rate of inflation. As you may have noticed at the pumps, fuel prices have fallen. This has been a large contributor to CPI inflation for December 2022 being 10.5%, down from 10.7% in November. So, prices are still increasing, just at a slightly slower rate.

How have the markets responded? Well, the UK’s main stock indexes rose on Friday, but not enough to prevent their first weekly losses of the year. Losses recorded during the week are thought to be because of weak US data and major central banks sticking with their rate hike narrative despite a slight fall in inflation. The result was the FTSE 100 losing 0.9% over the week, and the FTSE 250 down 1.3%.

In the US the major indexes ended the week with a mixed picture. The positive signs of reducing inflation were offset by ongoing recession fears. The S&P 500 ended the week 0.7% down and the Dow finished the week 2.7% down. The Nasdaq however ended up 0.6%.

The Bank of Japan met and left interest rates unchanged, continuing to buck the global trend of increasing interest rates to control inflation. Japanese markets rose over the week supported by optimism over China reopening after their latest Covid lockdown.

Next week sees a big week for earnings data in the US, including updates from some of the biggest companies in the world including Microsoft, Tesla and Visa.

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 intended as commentary 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 invested.