Global markets are rapidly changing month-to-month due to various interconnected factors influencing supply and demand, investor sentiment, economic conditions, and ongoing geopolitical events.
Our monthly market update aims to provide a clear and easy-to-understand overview of the global market landscape, highlighting a few significant changes in key global markets that might affect your portfolio.
If you would like to find out more about this topic, you can read our dedicated Global Stock Markets guide.
Global Market Update: September 2023
The global markets have exhibited a mixed picture in September 2023. Although some developed economies, particularly in North America and parts of Europe, have shown resilience, supported by robust consumer spending, technological innovation, and accommodative fiscal policies, there was a downward trend across all global markets last month, with the world index sitting at -4.56% (see graph below).
A global index of stocks bounced back after a nine-day losing streak on Thursday, 28th September, as oil prices fell and U.S. Treasury yields pulled back from their highest levels in 16 years.
Developed market equities fell by -3.4% over Q3, taking year-to-date returns down to a still strong 11.6%.
Why are the markets down?
Emerging markets have faced greater volatility due to various factors, including fluctuating commodity prices, currency concerns, and geopolitical tensions. While some nations have experienced rapid growth, others grapple with economic challenges, so it’s essential to know this when seeking opportunities in these regions.
USA Markets – September 2023 Overview
September was one of the worst months for Wall Street, closing the month with more losses. The S&P 500 slipped 0.3% on Friday, 29th September, resulting in most stocks within the index sinking. The Dow fell 0.5%, and the Nasdaq composite increased by 0.1%.
However, thanks to infrastructure spending and green energy initiatives, there has been a rise in significant investments in renewable energy, electric vehicles, and sustainable infrastructure, further propelling economic growth. You can see the overview of how the markets are faring against 2023 so far:
- The S&P 500 is up 448.55 points, or 11.7%
- The Dow is up 360.25 points, or 1.1%
- The Nasdaq is up 2,752.84 points, or 26.3%
UK Markets – September 2023 Overview
In the UK, the FTSE 100 closed on Thursday, 28th September, 1.1% down. Mining stocks were impacted by continuing fears for China’s growth outlook, and the demand for precious metals and other commodities is likely to be lower than expected for the remainder of the year.
Although we can see a drop to -0.9%, the UK stock market was still one of the best performing worldwide, thanks to the energy sector, leading to 1.9% gains over the past 3 months.
The outlook for Q4 2023 and 2024
Some analysts have warned that economic growth in the UK will likely underperform in 2023 and 2024, while data published on Monday showed a drop in retail sales for August following a similar fall in July.
Despite this, there is optimism for energy companies thanks to the strength in oil prices and the British government giving the green light to a North Sea gas extraction project.
UK interest rates
To help sustain growth and employment, The Bank of England’s Monetary Policy Committee (MPC) sets monetary policy to meet the 2% inflation target. They met on 20 September 2023 and voted by a majority of 5–4 to maintain Bank Rate at 5.25%.
Europe Markets – September 2023 Overview
Although European stocks showed a more robust finish at the end of September, it was a weak month overall and the worst quarter for a year. The pan-European Stoxx 600 closed up 0.5%, with most sectors, such as tech and household goods, finishing positively.
As shown in the graph above, Europe reached -3.63% in September, following a 2.8% fall in August. Although gains were made in July, that still takes the benchmark Stoxx to a 2.9% loss for the quarter, its worst performance for a year.
Asia Markets – September 2023 Overview
Asia-Pacific markets, including China, Japan, and emerging economies in Southeast Asia, have displayed resilience amidst global uncertainties. This is evident from their rise in the final trading day of the week, with Hong Kong’s Hang Seng index leading gains in the region and rising 2.67% in its final hour of trade.
How are Chinese markets performing?
According to the monthly China Beige Book survey released on Friday, 29th September, the country’s slight economic rebound has stalled. However, China has seen steady economic growth supported by domestic consumption and exports. Technological innovation and investments in artificial intelligence (AI) and green technologies have continued to drive the Chinese market forward.
Ready to find out more?
As usual, our recommendation persists: Investors should maintain a well-diversified portfolio emphasising high-quality assets and consider the long-term outlook.
Please contact Brite if you have any questions about this market update or want to learn more about Brite and how we can maximise your pension and investment assets. Our experienced advisory team is here to help you make more informed decisions.