Market Outlook Autumn 2022
- philmather5
- Oct 10, 2022
- 2 min read
The news has been as turbulent as ever in these past few weeks, and the markets have reflected as much, especially the movement of the pound's value lately.
Here you'll find a review of the past quarter as well as a downloadable version of the details. Should you wish to discuss any point in more detail or how the news may impact your own financial planning, don't hesitate to get in touch with your adviser.
The end of the quarter saw chancellor Kwasi Kwarteng’s mini-Budget cause sterling to fluctuate wildly and UK government bonds to plummet. Investors were rattled by plans to pay for sweeping tax cuts through additional government borrowing. This raised the spectre of more inflation and caused investors to speculate about more aggressive interest rate rises as the Bank of England is forced to clamp down harder on rising prices and shore up confidence in sterling.
For most of this quarter markets have been caught between fear that higher inflation will drive interest rates ever higher and fear of recession. Markets have remained highly volatile as each inflation reading or central bank announcement has reshaped expectations. After a brief rally, government and corporate bonds have fallen steeply as markets adjust to expectations that interest rates will remain higher for longer.
Equities recovered some of the losses from the first half of the year, with growth companies doing well. Disappointing inflation numbers in the US and the fallout from the UK’s tax cut plans triggered another decline, although US and Japanese equities held on to some gains.
The Chinese government has stepped up efforts to boost the economy and restore confidence to its property market but its commitment to zero-Covid has been a considerable drag on economic activity. China’s slowdown helped oil prices ease and industrial metals have also fallen.
This message is the opinion of Velarium Wealth and contains a document produced by FE Investments that we feel is relevant at the current time. This document has been prepared for general information only and is not guaranteed to be complete or accurate. It does not contain all of the information which an investor may require in order to make an investment decision.
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