Introduction
Following a volatile start to the period, global equity markets rose in the first half of August, with notable gains in particular in the US. Data indicating a slowdown in global demand initially weighed on sentiment, but more positive data helped markets rebound, particularly the slowdown in US consumer and producer price inflation, which also reduced expectations of an aggressive US interest rate increase in September. UK markets rose, despite the Bank of England increasing interest rates by 0.5% to 1.75%, whilst warning of a drawn-out recession.
Introduction
Following a volatile start to the period, global equity markets rose in the first half of August, with notable gains in particular in the US. Data indicating a slowdown in global demand initially weighed on sentiment, but more positive data helped markets rebound, particularly the slowdown in US consumer and producer price inflation, which also reduced expectations of an aggressive US interest rate increase in September. UK markets rose, despite the Bank of England increasing interest rates by 0.5% to 1.75%, whilst warning of a drawn-out recession.
Market Update
UK indices rose in the period 1 to 15 August, with the FTSE 100 and FTSE 250 producing similar gains. Weakness in sterling following the Bank of England’s warning of a long UK recession helped the FTSE 100, whilst investor sentiment was boosted by the signs of an easing in US inflation. Other developed markets also finished the first half of August higher, with US markets in particular benefiting from the easing in fears over US inflation. The broad Asian and Global Emerging Markets indices also rose, despite a fall in China. In fixed income, corporate bonds outperformed gilts, although both finished with small losses.
We generally recommend that you hold investments for the medium to long-term, which we would view as being for five years or more. This market commentary provides an insight into the current factors that are affecting short-term global returns, but should not be viewed as a basis for making long-term investment decisions. You should consider your own investment goals and timeframes before making any such investment decisions. If you do have any concerns about where your money is invested, please contact your Origen adviser.
CA8467 Exp 08/2023
