Global markets continued their upward trend in November, with the MSCI World index gaining a further +3.15%. This brings the year-to-date return of the index to +24.5%, putting it on track for its best year since 2013. However there has already been some volatility this week, particularly in the US, as Donald Trump threatened to impose import taxes on $2.4 billion worth of French goods. Investors will certainly be hoping to avoid a repeat of last December, when markets tumbled amidst fears of the trade war escalating.
Meanwhile all eyes are on the UK general election, which takes place next Thursday. At the time of writing, polls and betting exchanges indicate that the Conservative party are in with a good chance of achieving a parliamentary majority, but plenty can happen in the days leading up to the vote. We’ll be in early on Friday 13th to cover the result, and we look forward to seeing many of you at next week’s annual client seminars.
A full round-up of November market performance
In the UK, the FTSE 100 index rose +1.81%, while medium and smaller companies, measured by the FTSE 250 ex IT index and the FTSE Small Cap ex IT index, picked up +4.38% and +3.48% respectively. In the US, the S&P 500 index gained +3.63%, while in Europe the Eurostoxx 50 index climbed +2.81%. Japanese stocks measured by the Topix index lifted +1.94%.
Emerging market returns were also positive, as the MSCI Emerging Markets index put on +0.59%. Chinese equities measured by the MSCI China index rose +1.69% while Latin American equities, measured by the MSCI Latin America index, increased +0.20%. Indian stocks measured by the IISL Nifty 50 PR index were up +1.50%.
In the fixed income market, UK government bonds, measured by the FTSE Gilts All Stocks index, slipped -0.79% and long dated (over 15 years to maturity) gilts lost -1.29%. European corporate bonds, measured by the Markit iBoxx Euro Corporates index, dropped -0.26% while sterling denominated corporate bonds, measured by the Markit iBoxx Sterling Corporates index, conceded -0.11%. In the high yield market, the Bank of America Merrill Lynch Euro High Yield index and the Bank of America Merrill Lynch Sterling High Yield index captured +0.90% and +1.22% respectively.
Commodities had a mixed month. The S&P GSCI index, which consists of a basket of commodities including oil, metals and agricultural items, returned -0.01%. The price of a crude oil futures contract rose +3.65%. In the agricultural markets corn fell -4.39% while wheat surged +5.25%. The precious metals saw negative returns as the S&P GSCI Gold and Silver indices shed -3.12% and -6.01% respectively.
In the currency markets, the pound slipped -0.13% versus the US dollar but appreciated +1.15% against the euro and +1.21% against the yen.
James Timpson CFA, BSc (Hons), IMC
(All the above returns are reflected on a local currency basis i.e. they do not factor in any relevant currency movements. Unless accompanied by PR (Price Return), they do include income).
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