Global markets rallied in October on the back of positive political news.  US markets were strong after President Trump announced that China and the US had reached a tentative agreement on a trade deal.  The US agreed to suspend tariffs scheduled for 15 October, while China agreed to buy up to US$50bn in US farm products and accept more American financial services (it should be noted Chinese officials did not actually confirm such a deal).  The Fed Reserve also cut the Fed funds rate by 25 bps to 1.50% and while it provided no forward guidance, it remains focused on the economic outlook.

In the UK, Prime Minister Boris Johnson’s request for an early election was granted and this will take place on 12 December 2019.  The ongoing Brexit saga resulted in the FTSE declining by 2.2% while other European markets were stronger in local currency terms with the DAX leading the way, up 3.5%, the Euro Stoxx up 1.0% and the CAC up 0.9%.  Asian markets were the best performing from a Global perspective with the Nikkei up 5.4% and the Hang Seng up 3.1%.  China still lagged, the region up only 0.8%.

Commodities markets were very mixed against the back drop of the trade negotiations with some of the bulk commodities underperforming, Iron ore was down 8.9% while Thermal Coal was up 5.2%.  US Gas prices had a rally and were up 13.0% while Brent Crude prices were down 0.9%.  Gold and Silver were also stronger with Gold up 2.8% and Silver up 6.5%.The major world markets as represented by the MSCI World Index and the S&P 500 rebounded in September with these indices up by 1.9% and 2.5% respectively.  As mentioned, European and Asian markets were also stronger, the UK market was mixed with the FTSE down by 2.2% in local currency terms and the Small Cap Index down by 1.7%. The AIM All Share Index was the best performing of the UK indices after a poor performance in September, increasing by 1.9% while the Fledgling Index increased by 1.3%.  Our portfolio of investments performed much better than the market, increasing by 2.8% during the month which, after allowing for expenses resulted in a 2.4% improvement in the NAV. As the positioning of the portfolio has, to a large extent been completed, we made no changes to the portfolio during the month. Cash held is slightly higher than normal given the current political climate and will be invested in due course.