The week in review

The week of 14 November saw markets cool slightly following the previous week’s rally, as investors searched for signs of a potential economic slowdown and that inflation may have peaked.
Published 22 November
4 mins

What’s happened in markets?

FTSE All Share0.577.22-1.98-0.471.083.483.64
Euro Stoxx 501.4813.424.17-5.73-7.484.875.29
S&P 500-0.616.78-7.03-15.61-14.3810.0610.90
Japan Topix-0.543.45-0.091.22-0.797.514.65
MSCI Asia Pac.1.749.03-6.56-21.93-24.64-0.40-0.73
MSCI Emerg. Mkts.0.807.35-6.19-21.27-23.57-0.97-0.98
Jo’burg All Shares-0.569.504.093.117.4713.107.76
UK Gov’t Bonds1.058.03-7.21-20.50-20.80-6.70-2.32
US Gov’t Bonds0.131.08-4.66-13.03-12.73-2.90-0.22
Global Corp. Bonds1.103.29-4.38-14.71-14.54-2.650.55
Emerg. Mkt. Local-0.184.97-2.81-13.90-13.93-5.26-1.66
Figures in the respective local currencies as at the end of trading on 18/11/2022.

In the US, the labour market remained resilient, despite the recent round of layoffs in the technology sector. Weekly initial jobless claims fell to 222,000, below the 228,000 expected. US retail sales for October grew by 1.3%, more than the 1.0% economists were expecting. However, US product price index (PPI) growth slowed to 0.2%, month on month for October, hinting at an improving inflation outlook.

On the political front, the Republicans narrowly regained control of the House of Representatives in the midterm elections. With the Democrats having earlier retained the Senate, this now ushers in a new era of divided government in the US.

In terms of politics, there has been a lot going on both sides of the pond. The UK autumn statement saw chancellor Jeremy Hunt announce tax rises and spending cuts aimed at mending the hole in the nation’s finances, following September’s mini-budget. The £55 billion of fiscal tightening, included raising the energy cap from £2,500 per year to £3,000 from next April. Although many of the cuts to public spending were deferred until after the next general election in 2024. Meanwhile, UK inflation surged to a 41-year high, as the consumer price index (CPI) rose by 11.1% in the 12 months to October 2022, up from 10.1% in September 2022. A report from the Office for Budget Responsibility (OBR) that accompanied the chancellor’s autumn statement suggested that the UK is already in recession.

European Central Bank president Christine Lagarde said the risk of recession in the eurozone had increased, as interest rates will have to be raised further to control inflation, which at 10.6% is more than five times the official target.

On the corporate front, US retailer Target disappointed the market with its earnings outlook. However, Walmart raised its full-year outlook, expecting an earnings per share fall of just 6-7% as opposed to the previously stated 9-11%.

In other news, a missile that exploded in Poland and killed two people triggered debate among western allies at the G20 summit in Bali. It was thought to have been accidental and not an intentional Russian attack. In the US, Donald Trump confirmed he is running in the next presidential election.

We saw a slight cooling in markets last week, as investors digested the previous week’s US inflation news and the hawkish comments from Federal Reserve (Fed) speakers. Although it has been a period of strength across risk assets over the last 30 days.

Market performance over the last 30 days has been particularly broad-based with little to differentiate developed market equities (+7.6%) and emerging markets (+7.3%). In terms of style, value (+8.7%) outperformed growth (+6.5%), while small and large capitalisation stocks were both up, +7.2% and +7.6% respectively. Materials (+11.6%) was the best performing sector over the week, while communication services (+2.2%) continued to be the weakest. Energy (+11.2%) and technology stocks (+10.0%) both performed well but were down slightly on the previous week.

In fixed income, yields were down over the last month, particularly on the long end, on the suggestion of a slight softening in US inflation and despite one Fed president saying rates could get at high as 7%. The longer end of the curve has been the place to be over the near term.

The US dollar is still being held at bay after its recent fall against other major currencies.




UK GDP (QoQ)-0.2
UK PMI48.247.5
UK CPI (YoY)11.1
EU GDP (QoQ)0.2
EU PMI47.347.0
EU CPI (YoY)10.6
US GDP (QoQ)2.62.8
US PMI54.4
US CPI (YoY)7.7

What’s happened in portfolios?

There were no major changes across the portfolios over the last week.

In equities, while volatility remains elevated, both our quality and value holdings have performed well over the month. On the quality side, Fundsmith Equity Fund was well supported by the strong performance within IT, while our value holding, Dodge & Cox Global Stock Fund, benefited from its exposure to energy and materials.

In terms of fixed income, our longer duration government bonds, the more interest rate sensitive part of the market, continue to be well supported on the back of falling yields. We’ve seen strong performance particularly in the the 7 to 10-year part of the market.

It has been an interesting week for real assets with strong performance. Renewables have continued to bounce back after the September mini-budget and despite the windfall tax announcement in the UK autumn statement. The price threshold for the windfall tax is likely to result in the funds suffering only a limited negative impact on net asset value (NAV).


In terms of alternative strategies, the team had a positive meeting with Brett Miller, a director of SLF Realisation Fund, on the winding down process of KKV. To date, 97.5% of the June 2020 NAV has been returned to shareholders, with more expected. Six loans remain as part of the orderly wind-up of the investment with the expectation that the total realised value will exceed the June 2020 NAV.

What's happening this week?

22 November • EU Consumer Confidence (Nov) | 23 November • UK S&P Global Flash PMIs | 23 November • US FOMC Minutes

Clients of Nedbank Private Wealth can get in touch with their private banker directly to understand how their portfolios are responding to market events, or call +44 (0)1624 645000 to speak to our client services team.


If you would like to find out more about how we manage clients’ investments, please contact us on the same number as above. Or you can get in touch using the links to the forms towards the end of this page.

Sources: Nedbank Private Wealth and (1) Bloomberg, (2) Reuters, (3) Bureau of Labor Statistics, (4) Office for National Statistics, (5) Office for Budget Responsibility and (6) Financial Times

The value of investments can fall, as well as rise, and you might not get back the original amount invested. Exchange rate changes affect the value of investments. Past performance is not necessarily a guide to future returns. Any individual investment or security mentioned may be included in clients’ portfolios and is referenced for illustrative purposes only, not as a recommendation, not least as it may not be suitable. You should always seek professional advice before making any investment decisions.

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