Welcome to our Q3 2023 investment update from FPC’s Mike Lea, Investment Director, and Senior Adviser, FPC LLP.
Key points include:
- Global equity markets generally positive over the quarter as economic resilience continues.
- Markets adopt a ‘higher for longer’ view on interest rates despite the widespread fall in core inflation.
- Increased cash deposit rates attracting investors but history suggests staying invested makes sense.
- Corporate bonds outperforming UK government gilts.
Summary: Markets continue to surprise with positive performance over the quarter, led by Japanese shares with the exchange rate being stable, though the Yen has fallen -13% year to date against sterling.
The US economy remains strong, with full employment and strong consumer spending. The US government continues to run a budget deficit adding further economic demand, which lessens the chances of interest rate cuts.
Meanwhile the UK is likely in recession but still battling with relatively high inflation and public debt and therefore has limited levers to pull. UK gilts remain under pressure by association. The UK stock market has performed well thanks to the energy sector and influence of global companies in the index.
Commodity prices, in particular energy, rallied sharply following the Middle-East tensions, which will likely provide a tailwind to inflation.
Updated long-term investment performance data should provide investors with confidence to stay in the market, rather than move to cash even if relative returns over the past year seem attractive.
Please view the video below and/or click on this link to access the report.
Please note, this investment commentary review contains information and opinion, on current economic and political positions, and does not constitute advice. The information is provided in good faith and is believed to be accurate, but as some data is provided by third parties this cannot be guaranteed. Past returns should not be seen as predictors of future returns.
