Weekly round up
UK markets continued their winning streak this week with the FTSE 100 gaining 0.67% to trade at 7,346 points at the time of writing.
Investors weighed a slew of economic data and a new batch of earnings while concerns about rising prices continue to fester in the background.
On the economic data front, the UK economy expanded 1.3% in the third quarter, slowing from a 5.5% hike in the prior period and missing market forecasts of 1.5%. Meanwhile, industrial output unexpectedly dropped in September breaking a two-month period of expansion, weighed down by significant contractions in the energy sectors.
The British Pound traded below $1.34 this week, the lowest since December 2020, and is heading for the fourth consecutive weekly loss as the Dollar remains strong amid soaring inflation.
In the commodity markets, gold settled above $1,850 an ounce on Friday, after hitting five-month highs earlier this week, driven mainly by inflation hedging and surging US consumer prices. The annual inflation rate in the US accelerated to a three-decade high of 6.2% in October, as higher prices pushed more broadly through the economy and offset recent wage hikes. Brent crude futures dropped towards $82 a barrel as oil prices came under pressure amid an inflation driven Dollar rally, a downgraded demand forecast from OPEC and the threat of further US intervention in the oil markets.
US stock futures traded slightly higher on Friday after basic materials and technology stocks bounced in the regular session to lift the S&P 500 and Nasdaq Composite indices. However, all three major US indices are on track to break five consecutive weeks of gains as soaring inflation rattled the US market.
Basic materials stocks rebounded sharply, rising 2.38% as a group whilst the Dow Jones was dragged down by a 7% drop in Disney shares after the company missed on both earnings and revenues and reported a slowdown in subscriber growth.
Meanwhile, policy outlook remained uncertain after the Federal Reserve signalled caution in raising interest rates, as it prioritises achieving employment targets and continues to believe that forces driving inflation will prove to be transitionary.
The information provided in this communication is not advice or a personal recommendation, and you should not make any investment decisions on the basis of it. If you are unsure of whether an investment is right for you, please seek advice. If you choose to invest, your capital may be at risk and the value of an investment may fall as well as rise in value, so you could get back less than you originally invested.