Market Overview – November 2023

Crossed trajectories of interest rates and stocks · 13 November 2023

At the beginning of October, long-term bond yields continued their rise initiated in August. Investors seem confident that central banks will be able to keep interest rates high for a long time. During the month, the 10-year rate in the United States exceeded 5%. The consequences of these new leaps are double-edged. On the one hand, investors have done the work of central banks, which should allow the latter to calm their aggressive monetary policy. This seems elementary in Europe with an economy that is slowing significantly and inflation that is falling. In the United States, if inflation also seems to be subsiding, the strength of the economy may still justify some rate increases, even if this seems unlikely. On the other hand, the effect of the increase in long-term rates is immediately felt across all asset classes which posted negative performance in October. 

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