Market Review September

UK

The FTSE All-Share Index rose 2.9% in sterling terms during September. Brexit uncertainty, along with slower global economic growth, appeared to be hindering the UK economy as survey data showed UK manufacturing and services activity had declined in August. However, official data showed the UK economy had grown by more than expected in July, at 0.3% month on month. Parliament passed a law requiring Prime Minister Boris Johnson to request a three-month Brexit delay by 19 October to avoid a no-deal scenario, though there was continued speculation that Johnson could seek to bypass this in some way. Parliament was subsequently suspended but was soon recalled after the UK’s supreme court ruled that Johnson’s decision to prorogue parliament was unlawful. In terms of sectors, life insurance (9.7%) led, while industrial metals & mining (-8.4%) 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 rose 1.0% in sterling terms. The European Central Bank (ECB) cut the interest rate on its deposit facility by 10 basis points to -0.50% and pledged to restarts its asset purchase programme from the beginning of November. It also unveiled specific measures to ease lending terms for eurozone banks. Official figures suggested that eurozone inflation eased to 0.9% in September versus 1% in the prior month. Eurozone industrial activity contracted by more than forecast in July, with Germany hardest hit, as trade uncertainty and the slowing global economy hit exporters. The Ifo Institute lowered its forecast for German growth in 2019, from 0.6% to 0.5%. A new, less euro-sceptic coalition government was installed in Italy, with the involvement of the country’s centre-left Democratic Party.

FTSE World Europe ex UK TR GBP (%)*

US

The FTSE All-World North America Index rose 0.7% in sterling terms over September. The Federal Reserve (Fed) cut interest rates by 25 basis points following its September meeting, though did not forecast any further rate reductions for the remainder of 2019. In early September, the US and China agreed to schedule direct trade negotiations for October. Towards month-end, US domestic political uncertainty was on the rise, with President Trump facing impeachment proceedings over allegations that he pressured Ukraine to investigate Democrat presidential contender Joe Biden. US economic data released in the month was largely positive, with survey data suggesting US manufacturing activity had rebounded to a five-month high in September. Data also showed that US retail sales beat forecasts in August.

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

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

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