Investment Market
15 November 2023

October 2023 Market Commentary

Another challenging month for the equity market, following a long-established seasonal pattern of market weakness in the northern hemisphere autumn. Domestic and international equities were down -3.8% and -2.6% (unhedged) respectively.

In a similar vein to September, bonds did little to protect portfolios, returning -0.8% (international) and -2% (domestic). The only refuge of note last month was Cash.

The key driver of this price action was once again the expectation of higher for longer interest rates, particularly in the US. With retail sales and core CPI remaining stubbornly high, the US Federal Reserve has signalled resolve in its rhetoric to maintain tight monetary policy.

Looking ahead, we remain slightly cautious on equities in the short-term despite the recent upswing in sentiment at the beginning of November. Employment data is softening, bankruptcy rates are rising globally, and economic bellwethers such as oil are softening because demand is weaker than expected. That said, however, we remain poised to take advantage of any softening in equities prices to add to our growth assets in portfolios, particularly if the macro data starts beating expectations

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