Market Monitor - 1 October 2021
Insights

Market Monitor – 1 October 2021

Stock markets around the world have ended September with a whimper, and many bourses have recorded steep losses this week. The past few days have seen the intensification of a number of negative issues for investors, with global supply chain problems, rising inflation and the prospect of central banks withdrawing stimulus measures – while increasing interest rates – all to the fore.
While much of Europe has been affected by recent hikes in the price of gas, soaring oil prices this week have increased the inflation threat for the world economy as a whole. There are signs that OPEC member states could soon commit to increasing output, but whether – and when – they will take decisive action to ease supply problems remains to be seen.
At a conference held by the European Central Bank, policymakers from the United States and the UK warned of the damaging impact that supply-chain bottlenecks were having on their respective economies. Federal Reserve chair Jerome Powell said he expected inflation in the US to run well above target for several months, increasing the likelihood of an interest-rate hike.

The US

On Wall Street, the Dow Jones Industrial Average ended trading on Thursday 2.7% down for the week so far, with the S&P 500 slumping 3.3%. The S&P has suffered its worst month since the pandemic hit in March 2020, losing almost 5% over the course of September as technology stocks have given up large chunks of their recent gains over interest rate fears.
However, disappointing unemployment figures in the US on Thursday – as well as other indicators showing a weak post-pandemic recovery – may give the Fed pause for thought when it comes to tightening monetary policy.
Another concern for investors in America this week has been the political difficulties facing the Joe Biden administration: the government could face a shutdown later this month if lawmakers in Congress cannot agree to lift the national debt ceiling, while Democrats are currently struggling to pass a trillion-dollar infrastructure bill.

The UK & Europe

In the UK, the FTSE 100 closed on Thursday 0.5% up for the week, an outlier among its peers on either side of the Atlantic. The FTSE’s gains can, however, be attributed at least in part to a weaking of sterling, which has slumped as a result of Britain’s ongoing supply crisis: a drop in the pound is typically good news for the international companies that dominate the index, as their overseas revenues become more valuable in sterling terms.
The supply chain problems that have affected the UK economy in recent months have come to a head following warnings last week that deliveries to petrol stations could be disrupted. Motorists have responded by panic-buying fuel, leading to widespread shortages that are likely to hamper the economic recovery further.
In Frankfurt, the DAX index ended Thursday’s session down 1.7% for the week, while France’s CAC 40 lost 1.8%. Inflation in Germany hit 4.1% in September, up from 3.4% the previous month, while ECB president Christine Lagarde warned of accelerating supply chain bottlenecks across the eurozone.

Asia

In Asia, the Hang Seng index in Hong Kong rose 1.6%, clawing back some of its recent losses. An announcement by the Chinese government that it would support its property market following the recent Evergrande crisis provided a welcome boost for investors.
Japan’s Nikkei 225 index of leading shares, however, was unable to escape the global feelings of pessimism, closing Thursday down 2.6%.
September 24
September 30
Change (%)
FTSE 100
7051.5
7086.4
0.5
FTSE All-share
4063.2
4059.0
-0.1
S&P 500
4455.5
4307.5
-3.3
Dow Jones
34798.0
33843.0
-2.7
DAX
15531.8
15260.7
-1.7
CAC 40
6638.5
6520.0
-1.8
ACWI
730.5
709.5
-2.9
Hong Kong Hang Seng
24192.2
24575.6
1.6
Nikkei 225
30248.8
29452.7
-2.6

Note: all market data contained within the article is sourced from Bloomberg unless stated otherwise, data as at 30/9/2021.

1 October 2021
Mark King
Mark King
Head of Investment Content
Share article
Share on twitter
Share on linkedin
Share on email
Key topics
Related topics
Share article
Share on twitter
Share on linkedin
Share on email
Key topics
Related topics

PDF

Market Monitor – 1 October 2021

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.

 

Related Insights

11 October 2021

UK real estate embraces carbon neutrality

Huge cuts in emissions from real estate assets will be essential to reach net zero carbon by 2050.
Read time - 6 min
24 September 2021

Mark King

Head of Investment Content

Market Monitor - 24 September 2021

In a rollercoaster week, global stock markets have managed to claw back sharp losses as fears of a major debt crisis in China eased.
Read time - 2 min
17 September 2021

Mark King

Head of Investment Content

Market Monitor - 17 September 2021

Stock markets around the world have had another volatile week, with concerns about the difficult post-Covid recovery to the fore once again. Most major indices have, however, managed to avoid serious losses.
Read time - 2 min

You may also like

Investment approach

Teamwork defines us and is fundamental to our investment approach, which is structured to facilitate the generation, assessment and implementation of good, strong investment ideas for our portfolios.

Investing with us

Learn how and why you should invest with us at Columbia Threadneedle Investments.

Contact

For more information about Columbia Threadneedle Investments or our products please contact your adviser or our Client Service Desk here.