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After October already showed some improvement, momentum in the stock market continued in November. Supported by positive market sentiment. Based on speculation that central bank interest rate hikes have come to an end (temporarily or otherwise). 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 counterpart. Because foreign investors focused on India and the recovery of China. After a miserable 2022 for the Chinese markets.
Best fund performance in November 2022:
NT Emerging Markets Custom ESG Equity Index Fund +9.11%
Developed Market equities follow the positive growth of October. Because 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 policy by 75 basis points (0.75%) to 4.0% and 3.0% respectively. In a long-awaited speech, Jerome Powell (Chairman of the Federal Reserve) announced that the central bank may slow down the pace of interest rate hikes starting in December. However, Powell cautioned, the battle against inflation is far from over.
Despite the warning, this provided a positive closing for the S&P500 (+5%) and Stoxx 600 in Europe (+6.8%).
Despite all the controversy, the World Cup began in October and COP27 concluded with a groundbreaking decision to establish a fund for vulnerable countries severely affected by the consequences of climate change.
Emerging Market equities performed better than their Developed counterpart. Covid-19 restrictions continue to pose a challenge to economic growth in China. But there seems to be light at the end of the tunnel. Investors have the idea 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 off. But it had a big impact on the performance of Asia's Emerging Market equities. India continues to grow and indices once again made 'all time highs'.
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 will 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 5.4% during the month. This resulted in lower returns, from the perspective of the euro, on Global Equities and High-Yield Bonds. Money market rates continued to rise in Europe to 1.5%.
💬 Another meeting of the FED on 14 December and ECB on the 12th about inflation and possible interest rate hikes.
📫 The US Consumer Price Index (CPI) data for November will be published on 13/12 and gives an idea of the expected interest rate hikes in 2023.
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