Last week
- Global equities returned 0.9% last week.
- The US S&P 500 closed at a record high on Friday. In Sterling terms the weekly gain was 1.3%.
- UK equities fell -0.6% over the week.
- The Chinese stock market had its best week in over a year with a gain of 6.02% in Sterling terms for the CSI China Securities 300 index. This in turn drove an increase in the broad emerging markets index of 0.9%.
- It was a good week for Japan as well with returns of 1.4% for the broad market index. Excellent valuations relative to other developed stock markets and corporate reforms have encouraged investment in Japan and the Nikkei index is riding a 33-year high.
- Oil prices surged, with the US WTI benchmark up 6.3%, as conflict in the Middle East continued and with risks of escalation remaining.
This week
- US inflation data will be published on Tuesday; market participants will use this as a guide on the likelihood of an interest rate cut in the spring or early summer.
- UK inflation data will follow on Wednesday; together with GDP which will indicate whether the UK is slipping towards recession or remains strong.
- Other major economic data that could impact equity markets in the week ahead are US retail sales and consumption, UK employment data, Japan’s GDP and industrial production numbers, Eurozone Employment, GDP, industrial production and trade balance data.
Equity returns are in GBP, Oil is in USD. Gold is shown in GBP. Bond returns are all shown in GBP. Source Bloomberg.
More detail
- The big story last week was the recovery in Chinese stock markets. Chinese shares rose on Wednesday, adding to their largest single-day gains in two years on Tuesday. Authorities have ramped up efforts to restore confidence in markets via measures to combat short selling and the appointment of a new head of the securities regulatory body. The CSI China Securities 300 index gained 6.02% over the week in Sterling terms.
- The other major development was a surge in oil prices due to worries of prolonged conflict and spreading unrest in the Middle East. Israel rejected ceasefire overtures from Hamas and US strikes on Iranian backed militias continued.
- Fixed interest markets paused for breath last week, for instance, US treasury and UK gilt yields increased and prices fell. US and UK inflation data will set the tone for the week ahead.
- The US S&P 500 index closed above 5,000 for the first time on Friday, reaching 5,026.61. Decent gains from technology stocks such as Nvidia, Alphabet, Intel, Amazon, Microsoft and Apple provided a significant lift. We continue to monitor the narrow range of stocks driving returns in US markets and are running broader diversification within our portfolios as discussed in our monthly update last week.
- UK equities fell -0.6% last week, in part due to comments from Bank of England policymaker Jonathan Haskel that he needed to see more evidence inflation was declining before he would vote to cut rates. Major company news included Tesco’s sale of its retail banking operations to Barclays, removing £6.7 billion in liabilities from its balance sheet. Additionally, Compass, AstraZeneca and Anglo American reported decent results and BP accelerated its share buyback programme.
- European markets were fairly flat over the week with a modest gain of 0.4% in the broad equity index. This was despite welcome news that inflation fell 2.9% in January in Germany, the region’s largest economy.
The value of investments and the income from them can go down as well as up and you could get back less than you invested. Past performance is not a reliable indicator of future performance.
The content of this article should not be relied upon when making investment decisions, and at no point should the information be treated as specific advice. The article has no regard for the specific investment objectives, financial situation or needs of any specific client, person, or entity.
