The move into Autumn from Summer did nothing to cool the temperature of UK politics.
Boris Johnson’s request to suspend Parliament for five weeks was deemed unlawful by the Supreme Court. The PM is down but not out. It’s looking likely that he’ll try again to prorogue Parliament ahead of the Queen’s Speech on October 14th.
Looking elsewhere, in our last market update we saw a glimmer of hope in the China–U.S. trade tiff, when China didn’t retaliate in kind to an increase to U.S. trade tariffs. The situation is offering further optimism, after the U.S. President announced he would consider doing an ‘interim deal’ with China which should hopefully have a positive effect on the global economy and financial markets.
In Europe, the European Central Bank cut interest rates into negative territory and warned governments that they needed to act quickly to revive flagging eurozone growth. It is being recommended that governments increase spending on local infrastructure projects like building roads, and bridges to help encourage economic growth in the troubled region.
Markets
September was a positive month for all global stock markets mainly due to the prospect of a truce between China and the U.S.
The FTSE 100, representing the UK’s largest public companies finished +2.92% higher than the previous month. Company shares that drove the market higher in September are the same that led the UK stock market lower in August, as pessimism shifted to optimism. This seesaw movement of markets month on month, demonstrates why investors should ignore the short-term white noise and focus on long-term investing.
U.S. shares also performed well in September, closing +3.71% higher. Apple led the surge upwards (+7.30%) benefitting from the well-received unveiling of the new iPhone 11 and its new TV streaming service. Subscription TV is a new string to Apple’s bow, priced to undercut the dominant player in the industry, Netflix, whose shares finished the month down -8.88%.
Of all regions, Japan’s stock market rose the most by +5.74%. The weakening of the Japanese Yen meant shares of Japanese exporters, that make up a large part of Japan’s stock market, increased as the goods they produce become more attractive to buyers overseas when the local currency weakens.
Other regions also performed well; Emerging Markets (+1.90%) and Asia Pacific (+2.66%).
In corporate news, Thomas Cook a UK household name went into liquidation with shares of the company no longer available to buy or sell on the UK stock market. To find out more, read our blog on Thomas Cook here.
Currency
The Pound’s performance was strong against most major currencies, recovering from a steep decline since Boris Johnson became Prime Minister. In September, the Pound rose against the Euro +1.83%, the US Dollar +1.08%, and +2.73% against the Japanese Yen.
Investment type performance breakdown
Performance among the investment types in your Plan this month was broadly positive, with shares up +2.29%, commodities +1.42%, and global property finishing higher up +1.28%. The only investment type to have a poor month was bonds -0.12%. This is typical when there’s optimism around the future of both local and global economies.
Summary with Plan details
With renewed optimism around global economic growth, largely assisted by the suggested truce between the US and China. Plans that contain more high-risk investments like shares and commodities delivered solid returns for the month. Although not as high, our lower risk Investment Plans also produced positive returns.
As always, our investment team will continue to monitor the markets to make sure your Plan remains on track. If we do need to make any changes to take advantage of the markets, we’ll let you know.
The figures shown are based on a medium-risk (Confident) investment Plan.
Please remember the value of your investments can go down as well as up, and you could get back less than invested. Past performance is not a reliable indicator of future returns.
