Market Monitor – 10 February 2023
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Market Monitor – 10 February 2023

Global stock markets have ended a volatile week on the back foot

Investors ponder whether new signs of economic weakness will be sufficient to slow the pace of central bank interest rate rises.

Strong January jobs data published last week in the United States was received badly by markets: it was seen as giving the Federal Reserve licence to continue tightening monetary policy without having to worry excessively about the wider economic consequences. Figures published on Wednesday, however, showed an uptick in weekly unemployment claims, suggesting that rising rates may finally be having an impact on the buoyant US labour market. Nevertheless, Fed chair Jerome Powell re-emphasised his commitment to the ongoing interest rate-rising programme, comments which were echoed by his counterparts in the eurozone and the UK. Investors remain concerned that further rate hikes could not only harm company valuations, but also plunge the US and other major economies into prolonged recessions.

US markets

On Wall Street, the Dow Jones Industrial Average ended trading on Thursday 0.7% down for the week so far, with the S&P 500 falling 1.3% and giving up a large chunk of last week’s gains. The current round of layoffs among American corporations is the latest sign of economic weakness, although company earnings reports for the final quarter of 2022 have mostly better than expected. Much of the week’s losses came late on Thursday in response to a rise in yields on US Treasuries, a reflection of the market’s expectation of further interest rate increases in the months ahead.

Europe

In the UK, the FTSE 100 closed on Thursday 0.1% up for the week so far. Gains were limited by a rebound in the value of sterling in response to the latest hawkish Bank of England comments. Britain’s property market continues to falter, with house price falls in January reported to be more widespread than at any point since the 2009 recession. However, the FTSE 100 was once again buoyed by the record profits reported by one of its leading energy-sector constituents.

In Frankfurt, the DAX index ended Thursday’s session up 0.3% for the week – reaching its highest level in almost 12 months – while France’s CAC 40 fell 0.6%. The German market welcomed inflation figures which indicated a slowing of price rises, thanks in no small part to falling energy costs over the winter so far. A number of major German industrials companies reported strong earnings, further underpinning this week’s gains.

Asia

In Asia, the Hang Seng index in Hong Kong dipped 0.2%, recovering some of its losses towards the end of the week. The news that the US had shot down a suspected Chinese spy balloon off the coast of South Carolina last weekend threatened to sour diplomatic ties between the two nations, leading to sharp falls on Chinese stock exchanges on Monday. However, President Biden was reported on Thursday to have said that relations would not necessarily be harmed by the incident. Japan’s Nikkei 225 index of leading shares, meanwhile, advanced 0.3% as Tokyo-listed technology firms posted another set of positive trading updates.

3 February
9 February
Change (%)
FTSE 100
7901.8
7911.2
0.1
FTSE All-Share
4339.7
4334.1
-0.1
S&P 500
4136.5
4081.5
-1.3
Dow Jones
33926.0
33699.9
-0.7
DAX
15476.4
15523.4
0.3
CAC 40
7233.9
7188.4
-0.6
ACWI
656.3
649.0
-1.1
Hong Kong Hang Seng
21660.5
21624.36
-0.2
Nikkei 225
27509.5
27584.4
0.3

Note: all market data contained within the article is sourced from Bloomberg unless stated otherwise, data as at 9 February 2023.

13 February 2023
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Market Monitor – 10 February 2023

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 2001 (Cth) and relies on Class Order 03/1102 in respect of the financial services it provides to wholesale clients in Australia. This document should only be distributed in Australia to “wholesale clients” as defined in Section 761G of the Corporations Act. 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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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 2001 (Cth) and relies on Class Order 03/1102 in respect of the financial services it provides to wholesale clients in Australia. This document should only be distributed in Australia to “wholesale clients” as defined in Section 761G of the Corporations Act. 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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