Market update: November 2022

After October already showed some improvement, momentum in the stock market continued in November. Supported by positive market sentiment. Based on speculation that interest rate hikes by central banks have (temporarily or not) come to an end. Bond yields declined and the US Dollar also depreciated against other currencies.

The World Cup, COP27 and G20 dominated the news in November. While markets continued to rise quietly. Emerging markets outperformed their Developed counterparts. As foreign investors focused on India AND China's recovery. After a lousy 2022 for Chinese markets.

Best fund performance in November 2022.

NT Emerging Markets Custom ESG Equity Index Fund +9.11%

Investors turned their attention to fewer central bank interest rate hikes and the Chinese market in 2023

Equities Developed Markets followed October's positive growth. As inflation in the United States showed signs of receding (7.7% YoY) and investor sentiment improved.

The Federal Reserve (Fed) and Bank of England (BoE) raised their interest rate policies by 75 basis points (0.75%) to 4.0% and 3.0%, respectively. In a long-awaited speech, Jerome Powell (Federal Reserve chairman) shared that the central bank may scale back the pace of interest rate hikes somewhat from December. But, Powell cautioned, the fight against inflation is far from over.

Despite the warning, this made for a positive close for the S&P500 (+5%) and Stoxx 600 in Europe (+6.8%).

Despite all the controversy, the World Cup began in October and COP27 concluded with a landmark decision to create a fund for vulnerable countries hit hard by the effects of climate change.

Emerging Markets equities outperformed the Developed counterpart. Covid-19 restrictions continue to challenge economic growth in China. But there seems to be light at the end of the tunnel. Investors feel the worst is over. The CSI300 Index rose 9.8% in November. The announcement that China's extreme zero-covid policy is coming to an end seems a long way off. But had a big impact on performance for Asia its Emerging Markets stocks. India continues to grow and indices once again made 'all time highs'

U.S. and European 10-year yields fell, by 38 basis points in the U.S. and 21 basis points in Germany. Because of expectations that the pace of interest rate hikes is receding.

High Yield Bonds (+0.34%) and Corporate Bonds (+0.25%) showed slightly positive results. And a decrease in the risk premium during the month as market sentiment improved.

The value of the euro against the dollar (EURUSD) revalued 5.4% during the month. That caused weaker results, from the euro, on Global Equities and High Yield Bonds. Money market rates continued to rise in Europe to 1.5%.

What does December have in store?

💬 Another meeting of the Fed on December 14 and ECB on the 12th about inflation and possible interest rate hikes.

📫 U.S. Consumer Price Index (CPI) data for November will be released on 13/12, giving a sense of the likely interest rate hikes in 2023

What does this mean for my plans?

Don't let the market disrupt your long-term goals. Vive's investment strategies take into account market ups and downs. Ultimately, a good plan and diversified portfolios are the key to long-term success. Consistent and periodic investing during periods such as these is crucial to profit in the long run.

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Expressions of Vive are compiled to inform and entertain. The content should not be considered financial advice. Investing involves risks.