A Brief Market Overview That Can Be Read In 5 Minutes

Equity markets delivered a mixed performance for the week. UK and Japanese stocks delivered slight gains. US stocks were down over 1%. A decline in Apple, the largest stock in the S&P 500 Index, drove part of the declines after news that Chinese government employees would no longer be able to use iPhones. Bond markets were generally weaker on renewed inflation concerns due to rising oil prices.

Economic data has highlighted a better economy than most people expected; as a result, fewer corporate executives are talking about the prospect of a recession. The research firm FactSet searched conference call transcripts from the recently concluded quarterly earnings season and found that just 62 of the companies in the S&P 500 mentioned the term "recession,” down from 238 one year earlier.

Rishi Sunak has told Chinese premier Li Qiang he has "significant concerns about Chinese interference in the UK's parliamentary democracy" after a British parliamentary researcher was arrested on suspicion of spying for Beijing. The Metropolitan Police has confirmed that two men were arrested under the Official Secrets Act over allegations of espionage offences.

A key measure of inflation in the US, called the Consumer Price Index Report, scheduled to be released on Wednesday, will show whether the recent moderation in US inflation extended into the month of August. The most recent CPI report for July showed that the annual inflation rate rose slightly to 3.2% from 3.0% the previous month.

Bank of England (BoE) Governor Andrew Bailey cast doubt on a possible hike in UK interest rates at the upcoming September 21 policy meeting. He told a parliamentary committee, "I think we are much nearer now to the top of the [interest rate] cycle." Referring to the decision, he said, "The judgments now are much finer [than before].”

Oil rebounded to trade around $87.4/barrel on Friday, the highest since early November, and booking a near 2% gain for the week due to expectations of tight supplies. Saudi Arabia announced it would extend its voluntary output cut of 1 million barrels per day through the end of December. Also, Russia decided to reduce its oil exports by 300,000 bpd for the rest of 2023.

Microsoft announced that it has signed a multi-year deal for the removal of up to 315,000 metric tons of CO2 with Direct Air Capture (DAC) technology company Heirloom, marking one of the largest carbon removal agreements to date. Heirloom is currently developing the Louisiana-based Project Cypress, a DAC hub expected to be capable of capturing more than 1 million metric tons of CO2 annually.

This week, important indicators in the UK will offer insights into the country's economic health, namely the unemployment rate, wage growth, and GDP growth for August. It will be a busy week in the United States, with the inflation rate and retail sales data taking centre stage. Investors are also awaiting the European Central Bank's interest rate decision.

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Source: Multi Asset Investment Team, Financial Times, BBC News, John Hancock, Morningstar, Trading Economics, ESG Today