October 2023 Market Update

Overview

It’s been a bit of a wild ride in markets over the last few weeks, with both bonds and equities falling in October but then bouncing back very strongly over the first few days of November led by small caps, last month’s weakest performer.

Saturday 7 October saw the brutal massacre of more than 1,400 people inside Israel by Hamas, with retaliatory action by Israelis leading to the reported deaths of more than 9,000 Palestinians so far. This had an impact on financial markets as uncertainty rose, bringing about volatility as well as a temporary rise in oil prices around concerns the conflict could widen to larger oil exporting nations (something we discuss in further detail below).

Elsewhere, in a similar fashion to September, broadly stronger economic news in the US translated into weaker financial market performance globally. The strong growth and employment data releases reinforced market participants’ view of interest rates being higher for longer. This caused bond yields to rise slightly (and hence bond prices to fall) as well as depressing equity markets.

Full update below…