Fed Minutes: Tightening the Belt, Loosening the Rhetoric
Bank of England Governor Bailey Flags ‘Hard Work’ Ahead
Lagarde’s Crypto Caution Hits Home
IFM Investors Pours £10bn Into UK
Kenya’s Privatisation Push
Market Recap.
Markets were flat for the week. The FTSE 100 ETF returned 0.01% whilst the Dow Jones ETF, S&P 500 ETF, Nasdaq 100 ETF fell by 0.02%, 0.47% and 0.93% respectively.
News.
Minutes of the latest Federal Open Market Committee meeting, released last Tuesday, reflected unanimity among members that monetary policy must remain restrictive “for some time” until inflation is clearly moving toward the Federal Reserve’s 2% goal. Fed officials opted again to maintain a holding pattern on interest rates to assess the lagged effects of tighter monetary policy. Officials generally noted that it was important to balance the risk of tightening policy too much against the danger of doing too little, according to the minutes.
Geopolitics.
Kenya will start its privatisation drive by offering stakes in 11 companies including the state oil pipeline, the finance ministry said on Monday. The 11 firms are among more than 35 companies that are slated for sale to partially help the government raise revenue in the face of growing debt repayments. Investors can buy stakes in one of the main convention centres in Nairobi, a text book publisher, agri-business firms and industrial companies, the ministry said.
Inflation.
Bank of England Governor Andrew Bailey said getting inflation down to the central bank’s 2% target will be “hard work” as most of its recent fall was due to the unwinding of the jump in energy costs last year. “The rest of it has to be done by policy and monetary policy,” Bailey said in an interview with website ChronicleLive published on Monday. “And policy is operating in what I call a restrictive way at the moment – it is restricting the economy”.
Central Banks.
European Central Bank President Christine Lagarde, admitted on Friday that her son lost “almost all” of his investments in crypto assets, despite copious warnings. Lagarde has long railed against cryptocurrencies, calling them speculative, worthless and a tool often used by criminals for illicit activity. “He ignored me royally, which is his privilege,” Lagarde told a town hall with students in Frankfurt. “And he lost almost all the money that he had invested.”
Commodities.
Silver rallied again, adding 5.66% whilst Gold gained 1.75%. Cotton was the other area of progress in the commodity market, gaining 3.14%.
Elsewhere, it was Cattle that fell by the most, with Feeder cattle off by 4.82% for the week.
ESG.
The Australian fund IFM Investors will sink £10bn (A$19bn) into infrastructure and energy transition projects in Britain by 2027 as part of a new memorandum of understanding with the Sunak government. The decision by IFM comes as a coalition of business and environmental groups calls on the Albanese government to supercharge tax and other financial incentives to ensure Australia can attract sufficient capital to drive the domestic transition to net zero emissions.
Week Ahead.
As ECB President Legarde speaks to guide the market on Monday, the US releases its ‘New Home Sales’ numbers (721k forecast, 759k previous) to guide on the health of the US economy as a whole. The US publishes Consumer Confidence numbers on Tuesday (101 forecast, 102 previous) with a slight contraction expected. On Wednesday, the US posts its GDP figures with 4.90% Quarter-on-Quarter growth forecast against 2.10% previous. On Thursday, Europe releases its latest inflation figures (2.80% forecast, 2.90% prior). And on Friday, all major economies release their Manufacturing PMI numbers, which are sure to drive markets.
Download
Sources:
Anthony Walters – Head of ESG at Clever Adviser Technology Ltd (Clever)
Market recap – Data sourced from FE FundInfo & Koyfin. ETFs quoted: iShares Core FTSE 100 UCITS ETF, iShares Core S&P 500 UCITS ETF, iShares Nasdaq 100 UCITS ETF (quoted in Pounds Sterling).
News – Fed Minutes Show Consensus: Rates Need to Stay High, By Megan Leonhardt, Barrons, 21/11/23
Inflation – BoE’s Bailey says getting inflation to 2% will be ‘hard work’, By William Schomberg, Reuters, 27/11/23
Central Banks – ECB chief Lagarde admits her son lost crypto cash, By Reuters, 24/11/2023
ESG – Australian super fund puts billions into backing Britain’s energy transition, by Katharine Murphy, Guardian, 26/11/23
Geopolitics – Kenya to begin privatisation drive, offers stakes in 11 companies, by Duncan Miriri, Reuters, 27/11/23
Commodities – Data sourced from Koyfin and Investing.com
Week ahead – Data sourced from Investing.com
Risk Warning:
These are Anthony’s views at the time of writing and should not be construed as investment advice. The opinions expressed are correct at time of writing and may be subject to change. Capital is at risk. The value and income from investments can go down as well as up and are not guaranteed. An investor may get back significantly less than they invest. Past performance is not a reliable indicator of current or future performance and should not be the sole factor considered when selecting funds.
Regulatory Information:
This is a general communication provided for informational purposes only. It is educational in nature and not designed to be taken as advice or a recommendation for any specific investment product, strategy, plan feature or other purpose in any jurisdiction, nor is it a commitment from Marlborough or any of its subsidiaries to participate in any of the transactions mentioned herein. Any examples used are generic, hypothetical and for illustration purposes only. This material does not contain sufficient information to support an investment decision and it should not be relied upon by you in evaluating the merits of investing in any securities or products. In addition, users should make an independent assessment of the legal, regulatory, tax, credit, and accounting implications and determine – together with their own professional advisers if appropriate – if any investment mentioned herein is believed to be suitable. Investors should ensure that they obtain all available relevant information before making any investment. Any forecasts, figures, opinions or investment techniques and strategies set out are for information purposes only, based on certain assumptions and current market conditions and are subject to change without prior notice.
All information presented herein is considered to be accurate at the time of production, but no warranty of accuracy is given and no liability in respect of any error or omission is accepted. Issued by Marlborough Investment Management Limited, authorised and regulated by the Financial Conduct Authority (reference number 115231). Registered office: PO BOX 1852 Lichfield, Staffordshire, England, WS13 8XU. Registered in England No. 01947598. The Clever Marlborough Model Portfolio Service (‘Clever MPS’) is a collaboration between Marlborough Investment Management Limited as the Discretionary Fund Manager and Clever Adviser Technology Limited, a company registered in England and Wales (company number 2910523) with registered office at Watergate House, 85 Watergate Street, Chester, Cheshire CH1 2LF (“Clever”). Clever is a technology and software provision company which developed a methodology and proprietary suite of algorithms for the monitoring, analysis, collation, and transmission of data on the performance of Investment Funds and related portfolios within the UK market which Marlborough utilises for investment purposes.
The post The Market Review: 27th November 2023 appeared first on Clever.