Market & Portfolio Update - October 2021

Global share markets rebounded and had their best month of the year – up 5.5% on average. A mix of positive economic data and company announcements continued to give investors confidence in the current cycle. Demand from consumers continues to be strong and supply chains are struggling to keep up, while also facing the challenges of Covid-disruptions.

Bonds prices fell slightly over the month as developed economies saw short term interest rates rise as inflation continues to surpass expectations. In New Zealand, the RBNZ raised the OCR by 0.25%, and market expectations are for a further increase in November. Similarly, central banks in England, Canada, and Australia are reducing their stimulus programmes and are hinting at raising interest rates to combat rising inflation.

The New Zealand share market ended the month down 1.3%, despite economic indicators remaining extremely strong. New Zealand unemployment rate fell to just 3.4% - equalling the reading in December 2007 and the lowest level since the early 1980s.