Is the Fed doing enough? We think so.

Is the Fed doing enough? We think so.

Markets and Investment Update
13 November 2023
This note contains an overview of our market views, what we are watching, and our portfolio strategy. These developments may not mean changes to your portfolio so please contact your Client Advisor for the latest update on your portfolio.

At a glance

How we’re positioned

Past performance is not a reliable indicator of future returns.

What we’re watching
  • A potential US government shutdown from 17 November is a key topic of discussion this week as political consensus has so far been hard to achieve. Government budget deadlines and shutdowns can typically cause short-term market volatility, but only a prolonged crisis may be more meaningful for the US economy and markets. For now, it seems the markets expect a resolution, given the lack of significant swings in equity and bond prices.
  • In the US, inflation and durable goods orders are key data points this week. Markets would welcome a fall in inflation, which is projected to decelerate more meaningfully, as it helps the case for not increasing rates again. However, core inflation, which strips out volatile components such as good and energy, is likely to have remained roughly unchanged and fairly elevated, though past the peak too. Surprises in durable goods orders may increase volatility.
  • China retail sales and industrial production are also out this week. If these reports confirm that a recovery in China is underway or that at least the worst is over, sentiment may improve towards Chinese/Asian equities as well as global manufacturing and industrial sectors connected to China.
  • Germany’s ZEW survey, which measures the sentiment of German institutional investors, is expected to turn positive this week, suggesting investors feel the worst is behind them.
  • UK inflation and retail sales may confirm the continuation of the current trend of weak growth, with the pace of increase in consumer prices moderating more visibly, though remaining fairly elevated.

Important Information

Information correct as of 13 November 2023.

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