Market update: November 2022

Following some improvement already seen in October, the momentum in the stock market continued in November. Supported by positive market sentiment. Based on speculation that there has been an end (temporary or otherwise) to interest rate hikes by central banks. Bond yields fell and the US Dollar also dropped in value against other currencies.

The World Cup, COP27, and G20 dominated the news in November. While the markets quietly continued to rise. Emerging markets performed better than their Developed counterparts. Due to foreign investors focusing on India and the recovery of China. Following a poor 2022 for the Chinese markets.

Best fund performance in November 2022:‍

NT Emerging Markets Custom ESG Equity Index Fund +9.11%

Investors focused their attention on fewer interest rate hikes by central banks and the Chinese market in 2023

Developed Market equities followed October's positive growth. As inflation in the United States showed signs of decline (7.7% YoY) and investor sentiment improved.

The Federal Reserve (FED) and Bank of England (BoE) raised their interest rate policies by 75 basis points (0.75%) to 4.0% and 3.0% respectively. In a highly anticipated speech, Jerome Powell (Chairman of the Federal Reserve) announced that the central bank might slow the pace of interest rate hikes starting in December. However, Powell cautioned, the fight against inflation is far from over.

Despite the warning, this provided a positive close for the S&P500 (+5%) and the Stoxx 600 in Europe (+6.8%).

Despite all the controversy, the World Cup started in October and COP27 concluded with a groundbreaking decision to establish a fund for vulnerable countries severely impacted by the consequences of climate change.

Emerging Market equities outperformed their Developed counterpart. Covid-19 restrictions continue to challenge economic growth in China. But there appears to be light at the end of the tunnel. Investors feel that the worst is over. The CSI300 Index rose in November (9.8%). The announcement that China's extreme zero-Covid policy is coming to an end still seems far away. But it had a big impact on the performance of Asia's Emerging Market equities. India continues to grow and indices reached 'all-time highs' once again.

US and European 10-year yields fell, by 38 basis points in the US and 21 basis points in Germany. Due to the expectation that the pace of interest rate hikes would slow down.

High-Yield Bonds (+0.34%) and Corporate Bonds (+0.25%) showed a slightly positive result. And a decrease in the risk premium during the month as market sentiment improved.

The value of the euro against the dollar (EURUSD) revalued by 5.4% during the month. This led to poorer results, from the euro's perspective, on Global Equities and High-Yield Bonds. Money market rates continued to rise in Europe to 1.5%.

What does December have in store?

💬 Another meeting of the FED on 14 December and ECB on the 12th regarding inflation and possible interest rate hikes.

📫 The US Consumer Price Index (CPI) data for November will be published on 13/12 and provides an indication of the expected interest rate hikes in 2023

What does this mean for my plans?

Do not let the market disrupt your long-term goals. Vive's investment strategies take into account the up and down movements of the market. Ultimately, a good plan and diversified portfolios are the key to long-term success. Consistent and periodic investing in periods like these is crucial to profit in the long term.

Good to know‍

Vive's statements are compiled to inform and entertain. The content should not be considered financial advice. Investing involves risks.

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