Quick Market Review – November 2019

October seems to have been a month of mixed messages. After four interest rate rises in 2018, the US Federal Reserve announced an interest rate cut to 1.50% (the third cut this year) citing a slowdown in the US economy, and concerns over trade wars and a global recession.

However, markets have generally been positive last month with risk assets generally outperforming perceived safe havens. The S&P 500 posted another all time high last month, and emerging market equities posted a return of 4.20% during October. Much of this was due to market confidence that trade war concerns were receding with the announcement of a Phase One trade deal between the US and China.

Political uncertainty in the UK has reduced as well with the prospect of a non deal Brexit now looking unlikely, and sterling has rallied against the dollar and euro, but as 70% of revenue from FTSE 100 companies is earned overseas, the improvement in the value of sterling has coincided with a fall in the FTSE 100 last month.

Boris Johnson finally got his wish of another General Election, and the prospect in 2020 of maybe a stable government and perhaps an orderly Brexit would go a long way to establish market confidence after years of political turmoil.

"The value of investments and the income from them may fall as well as rise. You may get back less than you originally invested"