Events in the Middle East grip markets
Market Snapshot
In October, the tragic events unfolding in the Middle East gripped markets, and sparked fears of escalation across the wider region. Oil prices spiked in response, putting upward pressure on inflation, and while prices have moderated somewhat, the World Bank warned that we could see $150 a barrel in a worst-case scenario. This risks a repeat of the 1970s oil price shock and a negative blow to a beleaguered commodities market following Russia’s invasion of Ukraine.
Speaker finally appointed for the US House of Representatives
In the US, after a tumultuous selection process, relatively unknown Republican Mike Johnson became the Speaker of the US House of Representatives, setting the scene for tough negotiations over the levels of aid provided to Ukraine. A date to keep an eye on is the 17 November, which is the funding deadline for regular government operations. The last time there was such a deadline (30 September), Congress narrowly avoided a shutdown, but the compromised legislation led to the removal of former Speaker Kevin McCarthy.
Speaker finally appointed for the US House of Representatives
In the US, after a tumultuous selection process, relatively unknown Republican Mike Johnson became the Speaker of the US House of Representatives, setting the scene for tough negotiations over the levels of aid provided to Ukraine. A date to keep an eye on is the 17 November, which is the funding deadline for regular government operations. The last time there was such a deadline (30 September), Congress narrowly avoided a shutdown, but the compromised legislation led to the removal of former Speaker Kevin McCarthy.
Interest rates left unchanged by the ECB
In Europe, the European Central Bank left interest rates unchanged at 4%, marking the end to ten consecutive increases stating that this level will ‘make a substantial contribution’ to its 2% inflation target.
Magnificent 7 Stock News
Turning to stocks, this month we were in the midst of the US quarterly earnings season, with mixed results for some of the so-called ‘Magnificent 7’. Microsoft shares moved higher, while fellow tech giant Alphabet dropped lower, reflecting the varying success with which the two businesses have adopted generative artificial intelligence tools. Facebook and Instagram parent, Meta, posted decent results but was affected by warning on advertising demand, while Tesla profits fell after price cuts and plant shutdowns.
Written and prepared for Crowe Financial Planning UK Limited by John Moore (Senior Investment Manager at RBC Brewin Dolphin)
