Market Monitor – 19 May 2023
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Market Monitor – 19 May 2023

Global stock markets recovered some of their recent losses after US politicians reassured investors that a deal to raise the government debt ceiling was close to being settled

If lawmakers in Washington DC cannot find a way to allow the country to increase its borrowing levels the US risks defaulting on its own debt – with potentially disastrous consequences for the global economy. President Biden and his Republican counterpart in Congress, House of Representatives speaker Kevin McCarthy, have been at loggerheads since the start of the month. Republicans have been unwilling to authorise additional borrowing unless Democrats agree to reverse some of their recent tax policies. However, after a jittery start to the week, both Biden and McCarthy told reporters on Thursday that talks between the two were progressing well, leading to major gains on global markets.

United States

On Wall Street, the Dow Jones Industrial Average ended trading on Thursday 0.7% up for the week so far, with the S&P 500 adding 1.8%. While the breakthrough on debt ceiling negotiations was the biggest story in the US, investors remained mindful of economic data. Retail sales for April were weaker than expected, although there was a surprise increase in factory output. Meanwhile, the latest unemployment figures showed an unexpected fall in jobless claims, suggesting the US labour market remains tight – a sign that the Federal Reserve may need to raise rates again to bring inflation under control.

UK

In the UK, the FTSE 100 closed on Thursday 0.2% down for the week so far, with the latest falls in oil and commodities prices dragging London’s energy and mining stocks lower. Bank of England governor, Andrew Bailey, warned that Britain could be entering a “wage-price spiral” where rising salaries feed through into renewed increases in inflation, while UK-based car manufacturers said they could be forced to leave the country if the government refuses to water down Brexit-related import rules on electric vehicle parts.

Europe

In Frankfurt, the DAX index ended Thursday’s session up 1.6% for the week, while France’s CAC 40 gained 0.4%. European shares were buoyed by signs that the US debt ceiling saga could soon be at an end, while the European Union revised up its forecasts for the bloc’s growth in 2023. Officials said that member states had managed the fallout of Russia’s invasion of Ukraine – and the conflict’s impact on energy markets in particular – better than expected.

Asia

In Asia, the Hang Seng index in Hong Kong rose 0.5%, with gains limited by fresh concerns about the pace of China’s economic recovery. New data showed the country’s industrial activity in April came in below expectations, with retail sales also weak. Meanwhile, Japan’s Nikkei 225 index of leading shares continued its 2023 surge with a 4% gain, taking the market close to 30-year highs. Japan’s own growth figures were surprisingly strong, while investors also welcomed news that a major Tokyo-listed electronics company was planning a demerger that could potentially unlock additional value for shareholders.

12 May
18 May
Change (%)
FTSE 100
7754.6
7742.3
-0.2
FTSE 250
19188.4
19298.3
0.6
S&P 500
4124.1
4198.1
1.8
Dow Jones
33300.6
33535.9
0.7
DAX
15913.8
16163.4
1.6
CAC 40
7414.9
7446.9
0.4
ACWI
649.2
655.9
1.0
Hong Kong Hang Seng
19627.2
19727.3
0.5
Nikkei 225
29388.3
30573.9
4.0

Note: all market data contained within the article is sourced from Bloomberg unless stated otherwise, data as at 18 May 2023.

19 May 2023
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Market Monitor – 19 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.

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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.

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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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