European equities maintained their recent rally last week, reflective of growing optimism that the European Central Bank (ECB) may cut interest rates in the not-too-distant future. The pace of the slowdown in inflation over the past few months has fueled those hopes with headline CPI now only modestly ahead of the ECB’s 2.0% target level. Last week saw several senior ECB policymakers signal that future rate increases are unlikely given the disinflationary backdrop[1] and that helped to lift the MSCI Europe ex UK Index by +1.6% by the close of play on Friday. The ECB hosts its final policy meeting of the year this week and whilst no changes are expected to interest rates on this occasion, any hint of a near term change in direction will be welcomed by the Market.
In the US, the S&P 500 inched +0.2% higher with growth stocks outperforming their value counterparts thanks to the likes of Alphabet and Apple, the latter of which returned to a $3.0tn market capitalization. Elsewhere, mid-caps outperformed their large cap peers in the UK with the FTSE 250 returning +1.6% against the FTSE 100’s +0.3%. Lower gilt yields were supportive with the ten-year security briefly declining below the 4.0% mark, a level not seen for seven months. Losses were seen in several of the key Asian indices with the Nikkei 225 in Japan and Shanghai Composite in China declining by -3.4% and -2.1% respectively. Weak revised economic growth data in Japan was a notable headwind whilst in China, a credit downgrade for the country’s sovereign debt by rating agency Moody’s was not well received by investors.
A late jump on Friday wasn’t enough to stave off another weekly decline for oil, its seventh consecutive retreat. Brent crude declined by -4.0% to $75.84 a barrel on oversupply concerns heading into the New Year. Copper prices also fell, the metal falling by -2.0% to $8,366 a tonne whilst gold finished the week -2.5% lower at $2,004 an ounce. An uptick in the US Dollar did put some pressure on the precious metal which pulled back from its recent record high just above the $2,100 mark.
Week Ahead
Day | Country | Measure | Period | Forecast | Previous |
Monday | N/A | - | - | - | - |
Tuesday | UK | Unemployment Rate | October | 4.20% | 4.20% |
US | CP Inflation YoY | November | 3.10% | 3.20% | |
Wednesday | Europe | Industrial Production MoM | October | -0.30% | -1.10% |
UK | GDP MoM | October | -0.10% | 0.20% | |
UK | Industrial Production MoM | October | -0.10% | 0.00% | |
US | PPI Inflation YoY | November | 1.00% | 1.30% | |
Thursday | Europe | European Central Bank Policy Meeting | December | - | - |
UK | Bank of England MPC Policy Meeting | December | - | - | |
US | Retail Sales MoM | December | -0.10% | -0.10% | |
Friday | China | Industrial Production YoY | November | 5.70% | 4.60% |
China | Retail Sales YoY | November | 12.50% | 7.60% | |
Europe | Flash Composite PMI | December | 48.00 | 47.60 | |
UK | Flash Composite PMI | December | 50.90 | 50.70 | |
US | Industrial Production MoM | November | 0.30% | -0.60% |
Source: Refinitiv Workspace, 11/12/23
[1] T. Rowe Price – Global Markets Weekly Update 11/12/23
Past performance is not indicative of future performance.
The value of an investment may fall as well as rise. You may get back less than the amount invested.
The value of investments may fall as well as rise purely on account of exchange rate fluctuations.
Source: London Stock Exchange Group plc and its group undertakings (collectively, the “LSE Group”). © LSE Group 2023. FTSE Russell is a trading name of certain of the LSE Group companies. “FTSE Russell®” is a trade mark of the relevant LSE Group companies and is used by any other LSE Group company under license. All rights in the FTSE Russell indexes or data vest in the relevant LSE Group company which owns the index or the data. Neither LSE Group nor its licensors accept any liability for any errors or omissions in the indexes or data and no party may rely on any indexes or data contained in this communication. No further distribution of data from the LSE Group is permitted without the relevant LSE Group company's express written consent. The LSE Group
does not promote, sponsor or endorse the content of this communication.
© S&P Dow Jones LLC 2023. All rights reserved
Source: MSCI. MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indices or any securities or financial products. This report is not approved, endorsed, reviewed or produced by MSCI. None of the MSCI data is intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such.
The information contained does not constitute investment advice. It is not intended to state, indicate or imply that current or past results are indicative of future results or expectations.
Full advice should be taken to evaluate the risks, consequences and suitability of any prospective investment. Opinions provided are subject to change in the future as they may be influenced by changes in regulation or market conditions. Where the opinions of third parties are offered, these may not necessarily reflect those of Rowan Dartington.
Rowan Dartington is part of the St. James’s Place Wealth Management Group. Rowan Dartington & Co. Limited is a member firm of the London Stock Exchange and is authorised and regulated by the Financial Conduct Authority. Registered in England & Wales No. 02752304 at St. James’s Place House, 1 Tetbury Road, Cirencester, England, GL7 1FP, United Kingdom.
SJP Approved 11/12/2023