The Cambridge Weekly – 3rd April 2023

The Cambridge Weekly – 3rd April 2023

Markets put bank stress behind, but challenges remain

The first quarter of 2023 is now behind us, and while March ran the whole gamut of emotions for investors,we end the month (and quarter) on a fairly positive and quiet note. For the average UK investor who holds their investments in something not dissimilar to Cambridge’s globally diversified range of risk profiled portfolios, the quarter ends at levels above, or at worst, fairly close to where they started the year, so not really a ‘down’ quarter after all.

Banking scare meets inflation pressures

Capital markets were notably calmer last week, following the sudden banking crises through most of the month. This was not so much that all is well again in the financial world – many are still scrambling to deal with the fallout from Credit Suisse’s forced sale and Additional Tier 1 (AT1) bond write-off – but rather a case of no news being good news. As a result, the US stock market had a pretty pleasant week, while even the S&P banking index was healthily up over last week.

Is the microchip market heating up again?     

The semiconductor industry has bounced between extremes over the last few years. The realities of lockdown indoor living and working created unprecedented demand for computer chips from businesses and consumers – the rush to upgrade equipment meant supplies were drained in 2020. The sudden tightening in the chip market had a powerful effect, pushing manufacturers’ stock prices to dizzying heights.