Equity markets were positive across the world last week, except for China where the concerns about the strength of its property sector and rising Covid-19 cases weighed on markets. In the UK, the central bank keeps interest rates unchanged, and, in the US, the long-awaited infrastructure bill is approved.

US: Supportive Fed, healthy economic data and strong corporate earnings

Stocks posted impressive weekly gains due some positive comments coming out of the country’s central bank, healthy economic data, and another strong week of companies reporting earnings. The week ended with the House of Representatives approving Joe Biden’s $1.2tn infrastructure bill late on Friday night.

Japan: Liberal democratic party win boosts investor sentiment

Japanese equities were buoyed over the week by the convincing election victory of Prime Minister Fumio Kishida’s ruling Liberal Democratic Party. Investors were encouraged by the prospects of stable government and policy continuity. Japan’s household spending fell in September amid consumers’ continued caution due to the coronavirus pandemic. However, news that Japan was set to ease its strict coronavirus-related entry rules was welcomed by investors.

China: Property sector concerns continue as Covid-19 cases rise

Chinese markets recorded a weekly loss as headlines about the property sector and a growing COVID-19 outbreak across the country dampened investor sentiment. Restrictions in many places raised worries about supply chain constraints dampening the country’s growth outlook. Data showed that factory activity continued to fall and is the latest sign that the economy was losing steam after a strong recovery. In addition to slowing industrial growth, the troubled property sector, and lukewarm consumption, China is also grappling with a worsening power crunch.

Europe: Interest rates to remain lower for longer

Shares in Europe rose on strong earnings results from companies and signals from the European Central Bank that interest rates would stay low for some time, saying that an interest rate hike is “very unlikely” next year. On the covid-front, cases are on the rise and the European region is now the “epicentre” of the global coronavirus pandemic, and on the economic front, data for September shows industrial production falling due to supply chain issues.

UK: Interest rates remain unchanged; Pound weakens and business activity rises

Following the Bank of England’s decision to keep interest rates unchanged, the Pound weakened which led to gains in equity markets. UK stocks tend to gain when the pound falls because many companies that are part of the FTSE 100 are multinationals with overseas revenues. On the economic front, business activity in the UK hit a three-month high in October, indicating that the economy continues its recovery from the pandemic. Data suggests the current Covid-19 wave has peaked.

The Omnis Managed funds, Openwork Graphene Model Portfolios and Omnis Managed Portfolio Service provide you with a diversified asset allocation in line with your Attitude to Risk, investing in Developed Market Equities, such as UK, US, Europe and Asia Pacific as well as Emerging Market equities.  Cautious and Balanced investors will also have significant holdings in UK and Global Bonds, as well as Alternative Strategies.  We believe this multi-asset approach aims to minimise global equity market falls in volatile periods.  Past performance is not a guide to future performance.  The value of an investment and any income from it can fall as well as rise as a result of market and currency fluctuations.  You may not get back the amount you originally invested.

At Money & Mortgages, our team are happy to arrange video meetings and phone appointments.  For more information please contact us on 0161 505 0601 or via email info@moneymortgages.co.uk

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