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D-PIMS Weekly Market Update - Week of 14th to 20th November 2022

Today’s Monday update:

Over the course of last week, market moving headlines were mostly related to economic and geopolitical matters:

• On Monday, Chinese leader Xi Jinping and U.S. President Joe Biden met for long-awaited talks that come as relations between their countries are at their lowest in decades, marred by disagreements over a host of issues from Taiwan to trade. The two, holding their first in-person talks since Biden became president, met on the Indonesian island of Bali ahead of a Group of 20 (G20) summit. They were expected to discuss Taiwan, Ukraine and North Korea's nuclear ambitions.

Russian and U.S. officials were reported on Monday to be holding talks in Turkey, as Ukrainian President Volodymyr Zelenskiy visited Kherson, the biggest prize his troops have won so far, and vowed to press on recapturing all occupied lands. The Russian newspaper Kommersant cited a source as saying delegates from Washington were meeting on Monday in the Turkish capital Ankara with Russian delegates reportedly including Sergei Naryshkin, head of the SVR foreign intelligence agency.

• On Tuesday, a Western-led push to condemn Russia's invasion of Ukraine dominated the Group of 20 (G20) summit on the Indonesian island of Bali. Leaders of the major economies grappled with a dizzying array of issues from hunger to nuclear threats. Indonesia pleaded for unity and concrete action to mend the global economy despite deep rifts over Ukraine.

U.S. producer prices increased less than expected in October, further evidence that inflation was starting to subside. The producer price index for final demand rose 0.2% last month, the Labour Department said on Tuesday. In the 12 months through October, the PPI increased 8.0%. Economists polled by Reuters had forecast the PPI rising 0.4% and advancing 8.3% year-on-year.

• On Wednesday, surging household energy bills and food prices pushed British inflation to a 41-year high, data showed. Consumer prices rose 11.1% in the 12 months to October, the most since October 1981 and a big jump from 10.1% in September, the Office for National Statistics said. Economists in a Reuters poll - many of whom think inflation is probably peaking around now - had forecast inflation would rise to 10.7%.

A missile that hit Poland was probably a stray fired by Ukraine's air defences and not a Russian strike, Poland and NATO said on Wednesday, easing global concern that the war in Ukraine could spill across the border.

U.S. retail sales increased more than expected in October as households stepped up purchases of motor vehicles and a range of other goods, suggesting consumer spending picked up early in the fourth quarter, which could help to support the economy. The solid retail sales reported by the Commerce Department on Wednesday and signs of a slowdown in inflation raised cautious optimism the economy could avoid an anticipated recession next year or just experience a mild downturn.

Republicans were projected to win a majority in the U.S. House of Representatives on Wednesday, setting the stage for two years of divided government as President Joe Biden's Democratic Party held control of the Senate.

• On Thursday, the United Nations Secretary General said he welcomed an agreement by all parties to extend the Black Sea grain deal for 120 days, to facilitate Ukraine's agricultural exports from its southern Black Sea ports. The agreement, initially reached in July, created a protected sea transit corridor and was designed to alleviate global food shortages by allowing exports to resume from three ports in Ukraine, a major producer of grains and oilseeds.

Chancellor, Jeremy Hunt announced a string of tax increases and tighter public spending in a tough budget plan on Thursday that he said was needed after the blow dealt to the country's fiscal reputation by former prime minister Liz Truss. Hunt told parliament that the economy was already in recession and was forecast to shrink next year but there was no way to avoid painful fiscal medicine to ensure Britain could build on the recent restoration of calm in financial markets.

• Russia is ready for high-level meetings with the United States regarding strategic stability if Washington is ready, Moscow's deputy foreign minister Sergei Ryabkov was quoted in state media as saying on Friday. He also said Russia does not rule out new contacts with the United States after upcoming talks in Cairo on the New START nuclear arms treaty.

• On Sunday, countries closed this year's U.N. climate summit with a hard-fought deal to create a fund to help poor countries being battered by climate disasters, even as many lamented its lack of ambition in tackling the emissions causing them. The deal was widely lauded as a triumph for responding to the devastating impact that global warming is already having on vulnerable countries. But many countries said they felt pressured to give up on tougher commitments for limiting global warming to 1.5 degrees Celsius in order for the landmark deal on the loss and damage fund to go through.

• Over the week, the main global stock markets were mixed, with some up and some down. China and Hong Kong markets were up the most, with Japan and domestic UK down the most. The strengthening Pound did reduce the value of returns from overseas markets. Over the week, the lower risk D-PIMS portfolios were flat to slightly down, the higher risk portfolios were down more. Bond holdings supported the lower risk portfolios.

 

The value of investments and the income from them can fall as well as rise and you may not get back the original amount you invested.

Past Performance is no guarantee of, or guide to future returns.

The comments made above represent our interpretation of events and market views and are in no way a guarantee of future investment performance.

 

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