Please find below our Investment Market Update as at 18th August 2023.
What a shocker of a week for the markets! Equities and the much-coveted bonds have both regressed quite steeply due to a mixture of inflation news, economic weakness and fears over deflation in China. In both the West and East, we have worries about global growth but for different reasons – in the West because of rising interest rates, whereas in China they have falling interest rates in an effort to stimulate the economy.
I had written the bare bones of this Commentary earlier in the week, but I have swerved much of that content in a quest to explain what is happening now.
In this week’s Commentary:
- Contagion spreads
- Is a market bounce around the corner?
- Is Chinese deflation a real concern?
- Inflation and interest rates in the Western World
- Strong earnings don’t stimulate the market
- Bonds sell off
- Weakness in the job market
- Good news for mortgages
We appreciate that sudden lurches are disconcerting but I’m afraid markets do this from time to time, particularly during periods of uncertainty. As a couple of investment houses have reminded us, this is not untypical of a late economic cycle.
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Please Note: This communication should not be read as giving specific advice regarding your personal circumstances. This would only be given following detailed assessment of your individual needs. The value of investments may fall as well as rise; you may get back less than invested. Past performance is not necessarily a guide to future returns.