Monthly Market Overview – November 2015

10 Nov 2015

EQUITIES PERFORMED STRONGLY during October, clawing back some of the losses witnessed earlier in the three-month period under review, as policy makers in Europe and Japan hinted at renewed quantitative easing to counter the global slowdown in economic activity and the Chinese authorities cut interest rates once again.

The UK stock market generated a negative return of 3.6% (FTSE All-Share Index) during the three month period to the end of October, underperforming the FTSE World ex UK (£) Index which produced a negative return of 1.8%. In Sterling terms, the S&P500 Index (+0.4%) was the best performing regional equity market. Emerging Market equities performed poorly with commodity prices falling sharply as more evidence surfaced suggesting the Chinese economy is slowing. The MSCI EM (£) Index fell 4.5%.

Gilts produced a marginally positive return (FTSE Gilts All Stocks Index, +0.4%) during the period. At the end of October, the 10-year Gilt yield was 1.9%. More speculative levels of debt (high yield) marginally underperformed Gilts (BoAML £ High Yield Index, +0.0%).

The UK commercial property sector continued to produce positive returns, with the IPD UK All-Property Index returning 2.3% during the period under review.

Following the sharp oil price fall last year, indications that US crude inventory levels had stopped rising supported the Brent crude price earlier in the year, however signs of production growth and higher inventories drove the oil price down to $49.6 by the end of October, such that the three-month move in the oil price was a negative 5%.

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