Global financial markets have already been struggling this year thanks to the higher interest rate environment and inflationary pressures on both sides of the Atlantic. Now, with inflation previously having begun to ease, the unexpected Israel-Hamas war is weighing on markets, injecting geopolitical uncertainty and pushing up oil prices.

Investment commentators fear that a prolonged conflict could spark further inflation, especially as the Ukraine war also continues. "The wider risk is that a sustained increase in oil prices would act as a renewed inflationary pressure and further underpin the higher rates for longer message which investors in the equity and bond markets seem to be belatedly coming to terms with,” said Russ Mould, investment director at broker AJ Bell, in a note to investors."

On the bright side, in August the UK economy grew marginally by 0.2% instead of contracting as it did in July. So what could be the best cheap stocks to buy in November this year given this uncertain global backdrop?

Associated British Foods – a solid buy in the cost of living crisis

Associated British Foods, the company behind discount fashion retailer Primark and British Sugar recently unveiled an upbeat trading statement, despite the pressures of inflation and the cost of living crisis. AB Foods says that sales in its retail business are now expected to come in at around £9 billion for the full year – 15% up on figures seen the previous year. Sales in the fourth quarter were strong – up 15% - while like-for-like growth was 8% due to price increases and well-performing ranges. Its new flagship stores are also performing well and the roll out of its new click and collect service has been positive so far.

Meanwhile, ABF’s sugar division and ingredients has also seen good growth, thanks to a strong sugar beet harvest. Inflationary cost hikes are beginning to ease and the weaker dollar has also been a boon. What’s more, profitability in its sugar business is expected to improve dramatically next year.

At 1941.5p, the shares have risen by 51% this year but, with the cost of living crisis continuing, there is still room for growth. Primark remains a go-to brand for consumers trying to save money in the current straitened financial times.

Analysts at broker Royal Bank of Canada currently have a price target of 2,250p on the shares. Associated British Foods posts its full year results on 7 November.

Qinetiq – share price dip could be a buying opportunity

Shares in hi-tech security provider Qinetiq have dipped by 9% this year to 308p and this could present a buying opportunity. The company’s stock previously had a good run following the outbreak of the Ukraine war and, with the war continuing and security concerns elsewhere in the world, including the Israel-Hamas conflict and tensions in the Taiwan straits, the shares could be worth picking up. Qinetiq is a technological defence firm, offering protection against cyberattacks, virtual training for military personnel and technology for unmanned planes, among other activities.

Based in Farnborough, it has contracts in place with the Royal Navy worth £260 million to produce critical systems for its submarines, the UK’s Ministry of Defence and with the US military to produce night vision technology. It is also likely to benefit from the US, UK and Australian Aukus pact, announced earlier this year.

The company currently has an order backlog worth £3.1 billion. At the full year results in May, orders were up 41% to a record high of £1.7 billion. Meanwhile, revenues rose 20% to £1.6 billion (from £1.3 billion in 2022), while operating profits increased by 40% to £172.8 million (£123.7 million in 2022) and by 12% on an organic basis. Qinetiq recently bought Avantus in the US and Air Affairs in Australia.

The company is targeting £3 billion in revenue by 2027, fuelled partly by acquisitions, while management believe it has an addressable market of £30 billion. Shares in the company look relatively affordable on a price earnings ratio of just 11 times earnings.

Analysts at broker Citigroup recently upgraded their price target on the shares to 457p from 454p, while those at Numis think the shares could reach 460p.

Cisco Systems – a lowly rated tech stock

Cisco Systems’ shares trade on a price earnings ratio of around 17.5 – much lower than many other US technology firms, such as Alphabet and Apple, which tend to trade on PEs of around 30. The shares have risen by 32% this year to $54 but could be set to benefit further from the buzz around artificial intelligence.

The networking and cloud computing specialist’s chief executive Chuck Robbins told investors on a recent conference call that AI will “create new growth drivers” for the company, which also provides IT security services. Cisco is currently launching new AI technologies across its collaboration and security portfolios, which Robbins claims will “boost productivity, enhance policy management, and simplify tasks.”

Full year revenues rose 11% year-on-year to $57 billion and the company returned $2.8 billion of the $6 billion cash it generated during the period to shareholders. Earnings are forecast, however, to be flat for 2024 with full-year revenues expected to be around $57-$58 billion. Nevertheless, the shares also yield 3% and analysts at broker Tigress recently upgraded their price target on the stock to $76 from $73.

Past performance is not a guide to future performance.