Thank you, David Gardner and St James’s Place Asia and Middle East, for sharing your valuable market insights with our community in the SJP 7th October Weekwatch.

Stock Take

• Chinese and US markets rose last week despite geopolitical fears in the Middle East, while European and Japanese shares struggled.

• Concerns about Israel and Iran caused oil prices to increase. Brent crude oil rose 9.2% to $78.23 a barrel, marking the largest weekly gain in almost two years, as low global oil supplies pushed prices up.

• High energy prices contributed to the high inflation affecting the global economy after the pandemic. However, despite last week's increase, oil prices remain significantly lower than their peak of nearly $90 a barrel in April and far from the over $120 levels of 2022.

• Mark Dowding, Chief Investment Officer at Bluebay Asset Management, commented on recent events: “The situation in the Middle East has made markets nervous this past week. However, the small rise in oil prices shows that a local conflict might not significantly affect the overall global economy.”

• Chinese markets showed little reaction to recent events, continuing to rise after economic support measures were announced two weeks ago. Mainland stocks increased by 8.1% (Shanghai Composite), while Hong Kong's Hang Seng became the top-performing major market this year, with gains of over 30%. It remains uncertain if company fundamentals will keep pace with investor optimism in the coming year, but current confidence is strong.

• US markets had a good week because robust jobs data came out on Friday. This is a change since investors had been nervous that good data would delay the Fed's decision to lower interest rates. Now, with the changing global situation and fears of a recession, investors are using this information to evaluate the strength of the US economy.

• Commenting on the figures, Hetal Mehta, Head of Economic Research at St. James's Place, said: “This month’s US labour market data have surprised positively and should help reset some of the overly negative sentiment that has been building regarding the US outlook. The fall in the unemployment rate and pick up in wage growth is modest but important. It shows the labour market is rebalancing from very tight levels, but we do not think this translates into a high/imminent recession risk."

• The S&P 500 rose by 0.2%, marking the fourth week in a row of increases.

• The MSCI Europe ex UK dropped 2.1% in Europe, even though inflation fell below the European Central Bank’s (ECB) 2.0% target. This is good news for those hoping for lower interest rates from the ECB. Still, it also highlights concerns about weak economic growth, which worries many investors, especially with ongoing geopolitical tensions.

• Equity markets also fell in the UK last week as investors held their collective breath for Labour’s first budget later this month. Notably, on Wednesday, the Bank of England warned: “Markets remain susceptible to a sharp correction, which could affect the cost and availability of credit to UK households and businesses, with investors sensitive to short-term developments in a challenging global risk environment. Global vulnerabilities remain material, as does uncertainty around the geopolitical environment and global outlook.”

• Japanese stocks faced significant selling, with the Nikkei 225 dropping 3.0% after Shigeru Ishiba was elected as the new Prime Minister. Ishiba is seen as an economically hawkish leader, contributing to the market sell-off.

Wealth Check

Securing a financial award due to a potentially life-changing or traumatic experience may feel like the end of a journey for a claimant. This is understandable, given the emotional, practical, and legal challenges often faced in obtaining compensation or other forms of payout.

But it’s also the start of another journey, mainly because of the significant sums involved. After securing a settlement, they must determine what to do with the money and understand its impact on their lives.

This is rarely straightforward. There will likely be many issues to consider, from tax, social support, and potential care or rehabilitation needs to putting the money to the most effective use over the long term.

This is why financial advice is essential in such situations. It’s hard to know where to start when dealing with award settlements, and several factors may make them even more complex than they first appear.

Financial advisers can collaborate with law firms and clients early on to assist claimants in reviewing their finances, locating proper support, and planning for the future. How this is set up depends on whether the law firm has its preferred advisers and the settlement structure. The law firm might handle financial decisions, or it could be managed by the claimant’s family or the claimant.

Lawyers can’t make regulated financial decisions. The challenge is ensuring you’re working with an adviser with the required skill set to meet the needs of the individual on your behalf.

Financial advice is a good investment regardless of the circumstances. However, for those receiving damages from personal injury or clinical negligence claims, the case for specialist help is particularly compelling.

In the Picture

Major life events or milestones are a key reason for seeking financial advice. According to our Real Life Advice Report, 18–34 year-olds appear to face the greatest level of financial complexity, but are more proactive in seeking financial advice to help them manage their finances than the other generations.

St. James’s Place Weekwatch 7th October 2024.

Source:  Opinium surveyed just under 12,000 UK adults nationwide in two polls between May and August 2024. Quotas and post-weighting were applied to the sample to make the dataset representative of the UK adult population. Quantitative data referenced here is sourced from the first poll, which had a total sample of 7,995 respondents. Survey included those aged 18-34 (1,940), 35-54 (2,654) and 55 and over (3,401). 

The information contained is general information only and does not consider your personal objectives, financial situation and needs. We strongly recommend that you do not act on any information provided in this document without individual advice from a trusted Financial Adviser. You should also obtain a copy of and consider the Product Disclosure Statement for all financial products before making any decision.

The Expatriate always tries to make sure all information is accurate. However, when reading our website, please always consider our Disclaimer policy. The information contained is general information only and does not consider your personal objectives, financial situation and needs. We strongly recommend that you do not act on any information provided in this document without individual advice from a trusted Financial Adviser. You should also obtain a copy of and consider the Product Disclosure Statement for all financial products before making any decision.