Market Monitor – 13 January 2023
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Market Monitor – 13 January 2023

Global stock markets extended their new year gains this week thanks to a fresh fall in inflation in the United States.

The latest evidence that price rises are returning to more normal levels has raised hopes that central banks may be able to cut interest rates sooner than expected, providing a potential boost to economic growth.

Investors around the world are already braced for a slowdown caused by tighter monetary policy and soaring costs, but a prolonged and deep downturn may be avoided if policymakers feel able to reduce rates later in 2023. Markets have also been boosted by hopes that China’s reopening will provide a shot in the arm for a flagging global economy, as well as by resilient company earnings reports from the final three months of 2022.

US markets

On Wall Street, the Dow Jones Industrial Average ended trading on Thursday 12 January  1.7% up for the week so far, with the S&P 500 advancing 2.3%. While this week’s inflation figure was in line with analysts’ expectations, at least one Federal Reserve member has signalled plans to vote for a smaller rate rise at its next meeting. However, the optimism could be stymied by developments in the US jobs market: new unemployment claims have fallen faster than expected, indicating a shortage of workers. As such, wage inflation could soon start to creep up, putting renewed pressure on company bottom lines as well as prices across the wider economy.

Europe

In the UK, the FTSE 100 closed on Thursday 0.8% up for the week, having touched a four-year high during Thursday’s session. The expectation that industrial production will increase in China this year has helped drive commodities prices higher, to the benefit of the numerous energy and natural resources stocks listed in London. There were also gains for the retail and construction sectors, both of which have struggled in recent months. Upbeat Christmas trading statements from a number of supermarkets and high-street stores were welcomed by investors. Meanwhile, the prospect of interest rates falling faster than previously expected provided a boost to housebuilders, which should benefit from lower mortgage costs among their customers.

In Frankfurt, the DAX index ended Thursday’s session up 2.6% for the week, while France’s CAC 40 gained 1.4%. European shares also gained from optimism around falling US inflation and the relaxation of international travel restrictions in China. Latest figures showed the eurozone unemployment rate remained at a record low despite the difficulties faced by many businesses in the region over the past 12 months.

Asia

In Asia, the Hang Seng index in Hong Kong rose 2.5% as its recent reopening-driven recovery continued. Inflation in China was reported as rising to 2%: while this is in line with central bank targets, policymakers are likely to make additional efforts this year to stimulate demand. Japan’s Nikkei 225 index of leading shares, meanwhile, advanced on the back of a possible relaxation of monetary policy in the US. Travel stocks declined after the Japanese government announced restrictions on visitors from China due to an increase in Covid-19 infections there.

6 January
12 January
Change (%)
FTSE 100
7699.5
7758.6
0.8
FTSE All-Share
4210.6
4264.8
1.3
S&P 500
3895.1
3983.2
2.3
Dow Jones
33630.6
34190.0
1.7
DAX
14610.0
14986.9
2.6
CAC 40
6861.0
6958.2
1.4
ACWI
617.4
634.9
2.8
Hong Kong Hang Seng
20991.6
21514.1
2.5
Nikkei 225
25973.9
26449.8
1.8

Note: all market data contained within the article is sourced from Bloomberg unless stated otherwise, data as at 12 January 2023.

16 January 2023
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Market Monitor – 13 January 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.

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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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