Market Analysis Nov 2023

November saw shares and bonds thrive, fueled by slowing inflation in the US and elsewhere, fostering optimism about peak interest rates. Growth stocks outshone value stocks, while commodities, particularly energy, weakened.

US equities surged, supported by lower-than-expected October inflation data, hinting at a possible halt in interest rate hikes. Despite the Federal Reserve's ongoing inflation concerns, market sectors sensitive to rates, like real estate and tech, rallied.

Eurozone shares also rose with significant inflation drops, boosting sectors like real estate and tech. The European Central Bank remained cautious despite market optimism for rate cuts.

UK stocks gained but trailed other regions. Smaller companies outperformed, buoyed by hopes of peaked interest rates. Key sectors like tech and real estate excelled, while energy lagged.

Japanese equities rebounded, driven by growth stocks and foreign investment, despite domestic economic sluggishness. The yen's strength against the dollar impacted the market.

Asia ex-Japan equities flourished, encouraged by prospects of stabilized US interest rates. South Korea, Taiwan, and the Philippines led gains, while China's growth concerns limited its performance.

Emerging markets also prospered, slightly trailing developed markets, with Egypt and Korea leading the way. China lagged due to mixed economic signals.

Fixed income markets enjoyed a strong November. Government and credit bonds rallied amid speculation of an end to rate hikes. The US Fed held rates steady with a dovish outlook, while the UK and Europe showed softer economic data and declining inflation.

Global credit markets saw upbeat performance, especially in US investment grade and emerging market high yield sectors. Convertible bonds also gained, benefiting from the positive equity market.

The S&P GSCI Index fell, with energy and livestock underperforming, while precious and industrial metals, along with agriculture, saw modest gains.

Digital assets had a robust month. Altcoins outperformed, and Bitcoin and Ethereum saw substantial growth. Regulatory developments involving Binance marked a significant event in the cryptocurrency sector.