The US Federal Reserve kept interest rates on hold last week for the second meeting in a row. Good news, even though the federal funds rate remains at a 22-year high. Comments from Fed Chairman Powell indicating that the market expectation of one more hike may no longer be accurate gave a boost to stocks which rallied sharply. However he did add that the committee had not yet discussed rate cuts and remains focused on whether further hikes will be needed.
The US jobs data released on Friday showed that about half as many jobs were created in October (150,000) compared to September and way below the 12-month average. The yield of the 10 year US Treasury, which had fallen after the Fed meeting, fell further on the data. With the additional boost of earnings announcements which have generally been better-than-expected, stocks rallied strongly to finish the week close to their October high.
In the UK, the Bank of England also kept interest rates on hold for a second time but Governor Andrew Bailey cautioned that even if further hikes were not needed “it is much too early to be thinking about rate cuts.”
UK Market Chart 3rd November 2023
US Market Chart 3rd November 2023
US Risk Barometer 3rd November 2023
Europe Risk Barometer 3rd November 2023
Disclaimer: ‘Where the business has expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals and are subject to change without notice. The information contained within this communication is believed to be reliable but Realm Investment Management Limited does not warrant its completeness or accuracy.
This communication is not intended as a recommendation to invest in any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication. The information provided is for illustrative purposes only, it should not be relied upon as recommendations to buy or sell investments.’
