Global Market Insights: November 2023

World Markets Summary:

November’s rally provided some much needed relief across developed market equities on the back of better-than-expected inflation data, firstly in the US and then the UK. Western markets led, fuelled by a steep fall in 10-year bond yields, along with a more muted fall in short-dated debt. The star of the show was the US with the S&P 500 having the seventh best month of returns in the last 100 years. The rally was also supported by weakening data (which reduces the need for further increases in interest rates) in the US and signs of a stabilisation in manufacturing in both the UK and Europe. There was a welcome rally in UK small and mid-capitalisation companies, which had lagged thus far this year, as well as in European equity markets.

Corporate bonds, Emerging Market bonds and High Yield bonds all rallied too as markets re-assessed the “higher-for-longer” narrative, particularly in the US. This had a knock-on effect on the dollar, which was considerably weaker after being one of the stronger performing currencies  during the risk-off months of the past summer.

Japan and China both underperformed but for different reasons. In China, investors seem to be waiting for unambiguous proof the economy is recovering with consumer confidence, industrial production, retail sales and property all contributing to investors’ optimism. In Japan, sticky inflation, an unwillingness to consider an end to yield curve control (YCC), and some slowing domestic growth have taken the edge off one of the markets that investors had indulged earlier in the year.

Gross domestic product (GDP) growth in the US was very strong in Quarter 3 2023 but that is now history. Existing home sales, manufacturing Purchasing Managers’ Index (PMI) and durable goods orders are all leading indicators which support the slowdown narrative.

Chinese credit growth and retail sales were in line or better than expectations, but investors seem to keep focusing on bad news, which is still emanating from the property sector and by extension the fixed asset investment sector. Consumer confidence is also being affected by property woes. Policy support has been steadily gathering steam and GDP forecasts have started improving again but it is obvious investors require unambiguous evidence that the policy support is working before re-engaging.

Our in-depth views on:

Our weightings are based on sterling as a base currency.

United Kingdom (UK)

November marked a strong month for UK equities with the domestically focused FTSE 250 rebounding sharply from October’s sell-off and delivering a 7.12% return. The FTSE 100 was a little more subdued in comparison, rising 2.29% as major oil companies weakened and the strengthening pound dented the performance of some of the larger dollar earners. Fears over a wider-middle eastern conflict receded, sending the oil price lower and alleviating the previous October concerns that energy will again stoke the inflation flames.

Another positive was the October inflation data, which came in below expectations at 4.6%, falling from the 6.7% recorded in September. The fall was largely driven by a substantial year-on-year reduction in energy prices. Encouragingly, core inflation also reduced from 6.1% to 5.7% in November.  Aside from this, data later in the month showed grocery inflation falling for the sixth month in a row hitting the lowest level since June 2022 and food inflation easing from 8.8% to 7.8% in October 2023. This raft of inflation data has led to analysts speculating that interest rates may be cut earlier than forecasted in 2024 despite the ”higher-for-longer” Bank of England rhetoric.

There was also slightly more upbeat data on the UK economy presented in November. Despite recessionary fears, the private sector made a return to growth with the October 2023 PMI1 data in expansion at 50.1 defying the 48.4 contraction forecast of economists. Manufacturing PMI also rose to its highest level since April 2023 but remained in contraction. Stability appears to be returning to the housing market with mortgage approvals surpassing expectations to hit a three-month high. House prices also rose 0.2% in November, defying expectation of a 0.4% fall as a result of the improved outlook for interest rates next year.

United States (US)

November saw the seventh best month for the S&P 500 in 100 years, and 10-year bond yields fell the most since 2008. This came on the back of the better-than-expected inflation data (headline inflation now sits at 3.2% while core inflation is 4%). This, combined with markets being spurred on by the weakening economic data in the month, has enhanced the belief that the US is now at peak interest rates and the risk of further rate hikes is now no longer factored into the price of Government Bonds.

Based on the weakening economic data, neworders for manufactured durable goods in the US plummeted by 5.4% in November. Consumer sentiment came in weaker-than-expected and retail sales were also down in the month. Late in November, manufacturing PMI fell into contraction, although services did come in stronger-than-expected to the highest level in four months.

Once again on the housing front, the number of new houses under construction came in higher-than-expected, while existing home sales dropped for a fifth consecutive month. Therefore, we are continuing to see this trend playing out as discussed in prior commentaries.

The small rise in unemployment suggested a weakening of the labour market, however two other factors, new and continuing claims of unemployment, showed the labour market remained strong.

This strength in the labour market remains an exception to the overarching slowdown in the US economy.

The perception that US interest rates have now peaked alongside slowing of economic data, as well as concerns around the fiscal deficit next year, caused the dollar to fall sharply in November by around 4% against a number of major currencies.


In a positive turn for Europe this month, Germany rebounded and contributed to the region’s strongest month since January 2023, propelled by easing inflation. Eurozone inflation fell to 2.4% in November from October’s 2.9%, significantly below forecasts. Core inflation also came in better-than-expected, fuelling expectations of European Central Bank (ECB) rate cuts sooner than previously anticipated.

The German stock market index (DAX) reached its highest level since early August this year, boasting a 9.5% gain for November. Retail sales in Germany also contributed to the upward trajectory, rebounding by 1.1% month-over-month in October and coming in much stronger than expected. Further bolstering confidence, the GfK Consumer Climate Indicator for Germany rose marginally, and the Ifo Business Climate indicator rose for the second consecutive month.

After being in a recession for well over a year, there was an encouraging stabilisation in European manufacturing, as reflected in the HCOB Eurozone Manufacturing PMI reaching 43.8 in November, marking a six-month high.

However, Europe is not without challenge, as unemployment remains at a record low and money supply, the total amount of money circulating in the economy, continues to contract. Although notwithstanding a shock to energy prices, inflation is now coming under control and confidence is improving.

Asia and Emerging Markets

The Argentinian market led performance in November, up a massive 40% after the election of radical libertarian, Javier Milei, raised hopes of much needed economic reforms. However, with inflation at 140% and growth at -5%, this will be no easy task. More broadly, Emerging Markets (EM) rose close to 8% over the month, displaying their best month of performance since January 2023, as the rally in treasuries and weaker dollar outlook provided a strong tailwind. Further, the monetary policy environment turned positive in the EM space, as rate cuts exceeded rate hikes for the first time in 33 months. Year-to-date returns consequently transitioned from negative to positive, but at 5% they are still lagging the near 18% returns provided by overall global markets.

China, which makes up 30% of the Emerging Markets Index continued to provide a drag on performance of the wider market, falling 2% over the month. Data in China continued to be weak in the property sector and the economy moved into deflation, but positivity could be drawn from retail sales and industrial production coming in higher than expected.

Japan has been one of the strongest performers amongst major markets so far this year, but by its 2023 standards, November was a lacklustre month relative to other markets, registering half the gains of emerging markets. The data was also weaker-than-expected in retail sales, GDP growth and private sector activity. As rates come down globally, the currently extremely weak yen will likely strengthen, which could put pressure on corporate profits and may work to end the very strong market performance.

Fixed Income

We once again saw bond market volatility more elevated than equity markets in November. Fixed income markets rallied strongly this month across both Developed Markets (DM) and EM. As mentioned above, it was the biggest move in yield in the US 10-year bond in a single month since 2008. This rally provided some long-awaited reprieve for Government Bond holders, who have experienced poor performance in the face of rising rates this year. The rally was mainly driven by the long end of the yield curve, however there was also decline in short-term yields as investors gain more comfort around peak rates. The resulting effect has been a heightened inversion of the yield curve, which we would expect to reverse at some stage over the next year.

Credit spreads continued to tighten in November across a range of DM and EM markets. Given the likely prospect of a recession next year and the slowing of the US market, they continue to look tight versus historic standards. As such, we used the rally to trim some of our high-yield exposure and moved it into short-term Government Bonds.


The previous $2000 barrier for Gold present at the start of the Israeli-Palestine conflict has now been convincingly surpassed. The six-month price high comes as a result of a weaker US dollar as well as a slight easing of tensions within the Middle east (albeit temporarily) which had catalysed Gold’s decline earlier in November. The last two weeks of the month have seen an increase of over 4.5% as central bank purchasing once again ensued. Given that 2022 marked a record year for Gold purchases by central banks, it is especially noteworthy that Gold purchases are already 14% ahead of where they were at the same time last year. Further political instability from current levels would likely push the Gold price higher into year-end.

Oil prices dropped to a four-month low during November following the Organisation of the Petroleum Exporting Countries (OPEC+) decision to delay their latest meeting. Prices rebounded 9% from these depressed levels by month-end and the price will likely be further supported by additional cuts at OPEC’s meeting on the 1 December 2023.


This month, the Nationwide House Price Index in the UK experienced a 2% decrease year-on-year, marking a tenth consecutive decline. This figure was lower than the anticipated 2.3% drop and represents the smallest decrease in house prices since February. The decline in interest rate expectations contributed to a reduction in longer-term interest rates, impacting the pricing of fixed-rate mortgages. Robert Gardner, Chief Economist at Nationwide, mentioned that if this trend persists, it could alleviate the affordability pressures that have been limiting housing market activity in recent quarters which could bring attention back to the sector.

1Figures below 50 indicates a contraction in activity whereas figures above 50 indicates expansion.

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Important Information

All Index data figures are sourced by Morningstar and correct as at 30 November 2023 unless otherwise stated.

The value of investments or any income arising from them may fluctuate and are not guaranteed. Past performance is not necessarily a guide to future performance.