Market Monitor – 12 May 2023
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Market Monitor – 12 May 2023

Global stock markets have extended their recent losses this week due to renewed concerns about financial sector stability and a fresh round of lacklustre economic data

The news that another American regional bank had seen a surge in customers withdrawing deposits over fears the institution was on the verge of collapse threatened to become a self-fulfilling prophecy on Wednesday and Thursday, and sparked a new wave of contagion fears.

Meanwhile, a slight fall in the rate of price rises in the US only served to highlight how stubbornly inflation has remained above the Federal Reserve’s 2% target since peaking in June last year.

United States

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 shedding 0.1%. News of a decline in US inflation was welcomed by technology businesses, which will benefit to a greater degree from any future loosening of monetary policy. However, investors’ focus has switched from the Fed’s rate-raising programme to the state of the US economy and ongoing fragility in the financial sector. The latest jobs data showed a rise in vacancies and unemployment claims – signs that the labour market may also be starting to buckle under the strain of high interest rates.

UK

In the UK, the FTSE 100 closed on Thursday 0.6% down for the week so far with further falls in the price of oil and another Bank of England rate hike limiting gains. Investors in Britain are growing increasingly worried about the state of the UK economy, as house prices continue to fall and retail spending drops. The Bank has, however, revised its growth forecasts and no longer expects the UK to enter a recession in 2023, while it predicts inflation will halve to around 5% by the end of the year.

Europe

In Frankfurt, the DAX index ended Thursday’s session down 0.8% for the week, while France’s CAC 40 lost 0.7%. There were gains among the eurozone’s media and travel companies but these were more than offset by weaknesses in miners, car makers and a few large industrial firms. A potential slowdown in the US economy is expected to have a knock-on effect on major European economies.

Asia

In Asia, the Hang Seng index in Hong Kong dipped 1.5%, with the latest economic data suggesting that China’s road to post-pandemic recovery remains challenging. Latest government figures showed that imports had fallen in April, while last month’s rate of inflation also came in below expectations. Meanwhile, Japan’s Nikkei 225 index of leading shares closed just 0.1% lower for the week, as its recent run of comparatively strong performance continued. Although news of weakening demand in the semiconductor sector led to some losses, investors welcomed the news that a major Japanese technology investor was looking to expand its involvement in artificial intelligence.

5 May
11 May
Change (%)
FTSE 100
7778.4
7730.6
-0.6
FTSE 250
19452.5
19266.3
-1.0
S&P 500
4136.3
4130.6
-0.1
Dow Jones
33674.4
33309.5
-1.1
DAX
15961.0
15834.9
-0.8
CAC 40
7432.9
7381.8
-0.7
ACWI
652.5
650.7
-0.3
Hong Kong Hang Seng
20049.3
19743.8
-1.5
Nikkei 225
29158.0
29126.7
-0.1

Note: all market data contained within the article is sourced from Bloomberg unless stated otherwise, data as at 11 May 2023.

12 May 2023
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Market Monitor – 12 May 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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