Market Review October

UK

The FTSE All-Share Index fell 1.4% in sterling terms during October, a month characterised by strength in the pound. A possible no-deal Brexit on 31 October was averted after the UK was granted a further three-month extension to its EU membership. The UK scheduled a general election for 12 December in a bid to break the parliamentary deadlock on Brexit. Survey data suggested overall UK economic activity slowed during September, with a contraction in both services and manufacturing. This was despite some temporary support for the manufacturing sector from Brexit-related stockpiling. Data from the British Retail Consortium showed retail spending contracted 1.3% in September year on year. In terms of sectors, fixed line telecommunications (13.6%) and software & computer services (5.2%) led, while industrial metal & mining (-21.5%) and health care equipment & services (-9.7%) underperformed.

FTSE All-Share Total Return (TR) GBP (%)*

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Past performance is not a guide to future performance. The value of all stock market investments can go down as well as up and you may not get back the full amount originally invested. If you feel you need specific investment advice that takes your individual circumstances fully into account, please talk to a financial adviser. The value of directly held property will reflect the valuations determined by professional independent valuers. Such valuations are the opinion of valuers at a particular time and are likely to be revised. Property and property-related assets can sometimes be illiquid. 

Europe

The FTSE World Europe ex-UK Index lost 1.6% in sterling terms. Eurozone economic data released during October was generally lacklustre, with weakness in Germany. Monthly survey data indicated European manufacturing activity shrank in September, with German factory activity contracting sharply in the month. The country’s manufacturing gauge fell to its lowest level since 2009. Survey data for October pointed to a further contraction in German manufacturing activity in contrast to a modest monthly expansion in France. Germany’s
central bank warned that the domestic economy may have slipped into a recession, while the government lowered its estimate for growth in 2020 from 1.5% to 1%, at the same time as maintaining its forecast of 0.5% growth in 2019. Early official estimates suggested the eurozone economy grew by 0.2% in the third quarter, unchanged from the prior quarter.

FTSE World Europe ex UK TR GBP (%)*

US

The FTSE All-World North America Index fell 2.8% in sterling terms over October. Returns for UK-based investors were hit by a significant rise in the pound versus the dollar. The Federal Reserve (Fed) cut interest rates by 25 basis points amid further signs of slowing momentum. Survey data on US September manufacturing activity significantly disappointed expectations, while the services activity gauge fell to its lowest level in around three years. Data released later during October showed US industrial output and retail sales fell sharply in September versus the prior month. The US economy grew by 1.9% in the third quarter, down from the second quarter’s 2% pace. The US suspended tariff rises on Chinese imports scheduled for mid-October as the two sides agreed in principle to a limited, “phase-one” trade deal.

FTSE All-World North America TR GBP (%)*

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*Source: Lipper to 31 October 2019, total return. Indices rebased to zero at 30 September 2019.

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