November 2023 Update
F&A Monthly Update | NOVEMBER 2023
We hope you're in good spirits. As part of our ongoing commitment to keeping you informed, it's time for another monthly update!
These updates offer a brief look into the market insights from PortfolioMetrix, providing you with an overview of where your investments are headed.
Here's your November 2023 update!
Sending love
Richard and the F&A team
November 2023 Update
This month's piece is compiled by Brendan de Jongh, SA Head of Research - PortfolioMetrix.
GLOBAL UPDATE
November saw a big rally in markets due to positive news around falling inflation and interest rate expectations. Three of the major developed economic areas (UK, US and euro area) all saw their inflation fall more than expected, effectively closing off the chance of further rate rises and potentially paving the way for those central banks to cut rates towards the middle of next year. Needless to say, lower rates also mean less chance of a recession. Markets are now pricing in rate cuts of 1-1.5% in the next 12 months in the UK, US and euro area. This provided a boost to asset prices with bond yields falling, and thus bond prices rising, in anticipation of lower interest rates; and equities buoyed by an uplift in sentiment.
LOCAL UPDATE
South African (SA) markets rallied along with global markets; however local asset classes underperformed their global counterparts. The best performing asset classes came from global property and global equity followed by local property. Although local bond yields rallied strongly in the month, it was not sufficient to beat the unhedged global bond market. This was due to the rand broadly weakening against developed market currencies except for the US dollar where it remained flat. As the environment favored riskier assets, local cash was the worst performing asset class.