Performance Update – October 2023

16 October 2023

How has the recent situation in Gaza and Israel affected markets, and despite the UK economy growing in August the likelihood of a recession grows…


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Dear *|FNAME|*

The attacks in Israel over the last weekend had caused initial stock market declines at the start of the week, driven by a surge in oil prices and investor concerns over the potential fallout from another geopolitical crisis. However, as the week progressed, those worries gradually subsided.

On Tuesday, there was encouraging news when US Federal Reserve officials indicated that recent increases in bond yields and their subsequent impact on economic activity might have reduced the need for policymakers to raise interest rates in the coming months. Nevertheless, on Thursday, renewed unease emerged as it was reported that US inflation had remained unchanged in September, holding steady at an annualized rate of 3.7%.

In the UK, the FTSE 100 concluded Thursday with a 2% increase for the week, driven by a surge in oil prices benefiting major energy companies. Additionally, mining stocks saw gains amidst speculation that the Chinese government might be considering additional stimulus measures. Official data revealed a marginal expansion of the British economy in August, although many analysts still anticipate a recession in the country in the near future. The latest projections from the International Monetary Fund indicated that the UK is expected to be the least robust among the G7 economies in 2024.

This data is net of fund charges but does not include potential platform costs or advisor charges which are likely to alter the overall returns set out above.

As we find ourselves confronted with another geopolitical issue, investors appear to be showing reduced apprehension about the current situation in Israel and Gaza. While there was an initial surge in oil prices, they have since stabilised. The question remains, is there a potential for an escalation? Certainly, there is a risk. The situation with Iran is something we cannot ignore, as any clearer signs of support for Hamas could trigger global tensions and possibly involve major world powers. While it may be unlikely, it’s a factor that should be taken into consideration.

We don’t foresee any immediate alterations to the portfolios based on this news, but as usual, we will stay vigilant and monitor the situation.

Have a great few weeks everyone!

Louis Greening
Investment Specialist
Clear Financial Advice

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