Markets are relatively flat thus far in December, as we come to the end of a year characterised by rising inflation, outsized interest rate hikes, and geopolitical uncertainty.
As expected, the US Federal Reserve raised rates by 50 basis points at their final meeting of the year, marking their seventh consecutive rate hike. Turning to Wall Street, all three major indexes have eased off with the S&P 500, Nasdaq Composite, and Dow Jones Industrial Average down at 2.1%, 2.6%, and 1.8%, respectively.Chinese equities have continued to advance due to welcomed news that they would relax their stringent Covid-19 restrictions.
Despite the clear slowdown, with inflation still above 10%, the Bank of England is set to raise rates by another 50 basis points at their meeting in December. As monetary policy works with a lag, the full effects on the economy will likely only be felt in 2023. UK stocks have followed global peers lower, with the FTSE 100 index down 1% MTD.