Market Monitor - 12 November 2021
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Market Monitor – 12 November 2021

Stock markets around the world have had a mixed week, with renewed inflation fears denting investor confidence on both sides of the Atlantic as well as in Asia. New data from the United States, the eurozone and China has indicated that the strong upward pressure on prices seen in recent months shows no sign of abating.
The annual rate of inflation in China jumped to 1.5% in October, its highest level in more than a year, while factory gate prices in the country were up by over 13% on the back of soaring energy costs. Germany’s inflation rate last month rose to 4.5% from 4.1% in September, while the US consumer price index was up 6.2% in October – its highest level since 1990.
For investors, persistently high inflation is a problem because it raises the likelihood of central banks tightening monetary policy: by hiking interest rates, policymakers can try to restrict spending and bring prices under control. But higher rates are bad news for many businesses, particularly those that need to borrow to fund growth.

The US

On Wall Street, the Dow Jones Industrial Average ended trading on Thursday 1.1% down for the week so far, with the S&P 500 losing 1%. While investors in the US had initially welcomed President Biden’s success in passing a $1trn infrastructure bill, concerns are growing over the impact that extra government spending will have on inflation in the years ahead.
Shares in carmaker Tesla have fallen sharply this week after founder and CEO Elon Musk revealed plans to sell off a significant chunk of his stock – apparently in order to settle a large tax bill.

The UK & Europe

In the UK, the FTSE 100 closed on Thursday 1.1% up for the week, with its strong performance underpinned by gains for energy and mining companies. Oil prices have continued to rise after data from the US showed that crude stocks had fallen faster than expected. Meanwhile the price of copper and other metals has risen on the back of increased global demand.
Shares in Marks & Spencer soared after the retailer raised its 2021 profit forecast, while broadcaster ITV also did well after announcing a surge in advertising revenues. Figures showing that the UK economy grew more slowly than expected in the last quarter led to declines in sterling – another factor behind the FTSE’s rise this week.
In Frankfurt, the DAX index ended Thursday’s session up 0.2% for the week, while France’s CAC 40 gained 0.3%. New data from Germany showed that fears over a bottleneck in the country’s manufacturing sector are starting to recede.

Asia

In Asia, the Hang Seng index in Hong Kong rose 1.5%: the news that real estate giant Evergrande had reached another restructuring deal with creditors helped to ease concerns over a potential property sector crash.
Japan’s Nikkei 225 index of leading shares, meanwhile, finished down 1.1%, giving up some of last week’s gains. Investors are concerned that next week’s official Q3 data will show that growth has slowed faster than expected.
November 5
November 11
Change (%)
FTSE 100
7304.0
7384.2
1.1
FTSE All-share
4176.0
4212.4
0.9
S&P 500
4697.5
4649.3
-1.0
Dow Jones
36328.0
35921.2
-1.1
DAX
16054.4
16083.1
0.2
CAC 40
7040.8
7059.6
0.3
ACWI
757.1
752.0
-0.7
Hong Kong Hang Seng
24870.5
25248.0
1.5
Nikkei 225
29611.6
29277.9
-1.1

Note: all market data contained within the article is sourced from Bloomberg unless stated otherwise, data as at 11/11/2021.

12 November 2021
Mark King
Mark King
Head of Investment Content
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Market Monitor – 12 November 2021

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Important information

For marketing purposes.

 

This document is intended for informational purposes only and should not be considered representative of any particular investment. This should not be considered an offer or solicitation to buy or sell any securities or other financial instruments, or to provide investment advice or services. Investing involves risk including the risk of loss of principal. Your capital is at risk.  Market risk may affect a single issuer, sector of the economy, industry or the market as a whole. The value of investments is not guaranteed, and therefore an investor may not get back the amount invested. International investing involves certain risks and volatility due to potential political, economic or currency fluctuations and different financial and accounting standards. The securities included herein are for illustrative purposes only, subject to change and should not be construed as a recommendation to buy or sell. Securities discussed may or may not prove profitable. The views expressed are as of the date given, may change as market or other conditions change and may differ from views expressed by other Columbia Threadneedle Investments (Columbia Threadneedle) associates or affiliates. Actual investments or investment decisions made by Columbia Threadneedle and its affiliates, whether for its own account or on behalf of clients, may not necessarily reflect the views expressed. This information is not intended to provide investment advice and does not take into consideration individual investor circumstances. Investment decisions should always be made based on an investor’s specific financial needs, objectives, goals, time horizon and risk tolerance. Asset classes described may not be suitable for all investors. Past performance does not guarantee future results, and no forecast should be considered a guarantee either. Information and opinions provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed. This document and its contents have not been reviewed by any regulatory authority.

 

In the UK: issued by Threadneedle Asset Management Limited, registered in England and Wales, No. 573204. Registered Office: Cannon Place, 78 Cannon Street, London EC4N 6AG. Authorised and regulated in the UK by the Financial Conduct Authority.

 

In Australia: Issued by Threadneedle Investments Singapore (Pte.) Limited [“TIS”], ARBN 600 027 414. TIS is exempt from the requirement to hold an Australian financial services licence under the Corporations Act and relies on Class Order 03/1102 in marketing and providing financial services to Australian wholesale clients as defined in Section 761G of the Corporations Act 2001. TIS is regulated in Singapore (Registration number: 201101559W) by the Monetary Authority of Singapore under the Securities and Futures Act (Chapter 289), which differ from Australian laws.

 

In Singapore: Issued by Threadneedle Investments Singapore (Pte.) Limited, 3 Killiney Road, #07-07, Winsland House 1, Singapore 239519, which is regulated in Singapore by the Monetary Authority of Singapore under the Securities and Futures Act (Chapter 289). Registration number: 201101559W. This advertisement has not been reviewed by the Monetary Authority of Singapore.

 

In Hong Kong: Issued by Threadneedle Portfolio Services Hong Kong Limited 天利投資管理香港有限公司. Unit 3004, Two Exchange Square, 8 Connaught Place, Hong Kong, which is licensed by the Securities and Futures Commission (“SFC”) to conduct Type 1 regulated activities (CE:AQA779). Registered in Hong Kong under the Companies Ordinance (Chapter 622), No. 1173058.

 

Columbia Threadneedle Investments is the global brand name of the Columbia and Threadneedle group of companies.

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