Market Monitor – 2 February 2024
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Market Monitor – 2 February 2024

Global stock markets had a mixed week as central banks continue to dampen hopes of early interest rate cuts in 2024.

The US Federal Reserve and Bank of England both followed the European Central Bank’s lead and kept rates unchanged, despite signs that inflation has been brought under control. However, policymakers stressed that with economic data showing continued resilience, moves to loosen monetary policy were not necessarily imminent. Investors on both sides of the Atlantic now largely expect cuts to come in May, at the earliest.

There was further evidence of disruption in international supply chains because of the ongoing conflict in the Middle East and attacks on commercial shipping in the Red Sea, while recent figures published in China showed continued weakness in the factory sector.

United States

On Wall Street, the Dow Jones Industrial Average ended trading on Thursday 1.1% up for the week so far, with the S&P 500 edging 0.3% ahead. Markets fell sharply on Wednesday after the Fed announced another freeze on interest rates and officials said a cut at its next meeting in March was unlikely. However, both the Dow and the S&P recovered much of these losses during Thursday’s session. The main reason for the Fed’s caution is the strength of the American economy, with data this week showing a rise in consumer confidence and a smaller-than-expected fall in manufacturing output. Among major technology companies, fourth-quarter earnings statements were positive but did not quite match up to investors’ high expectations.

UK

In the UK, the FTSE 100 closed on Thursday 0.2% down for the week so far. The Bank of England’s decision to keep interest rates on hold was widely expected, but governor Andrew Bailey confirmed for the first time that the next move was likely to be downward. Bailey stated that inflation was set to fall to below the 2% target in the coming months before rising again by the end of 2024. The cooling jobs market is helping to reduce upward pressure on prices, with new vacancies falling at the fastest rate since 2020. Meanwhile, the International Monetary Fund downgraded its growth forecasts for the British economy and warned the government against making pre-election tax cuts.

Europe

In Frankfurt, the DAX index ended Thursday’s session down 0.6% for the week, while France’s CAC 40 fell by the same amount. Economic weakness in the eurozone has made the region the current favourite to see early rate cuts this year. Latest figures showed euro area growth had stagnated in the final three months of 2023 and an ECB official said policymakers should start relaxing monetary policy soon. Inflation in the bloc fell to 2.8% in January, while the European Union announced a delay in the introduction of environmental regulations that had sparked recent protests by farmers in France and Germany.

Asia

In Asia, the Hang Seng index in Hong Kong dipped 2.4% with sentiment hit by weak manufacturing sector figures in China. This followed news that a court had ordered the liquidation of one of the country’s largest property developers following its recent financial difficulties. Losses were particularly steep among real estate firms as a result. Japan’s Nikkei 225 index of leading shares advanced 0.7% as the market recorded its strongest January performance in more than a quarter of a century. There are signs, however, that the Japanese economy is starting to slow, with a dip in both construction output and manufacturing growth.

January 26
February 1
Change (%)
FTSE 100
7635.1
7622.2
-0.2
FTSE 250
19338.0
19131.2
-1.1
S&P 500
4891.0
4906.2
0.3
Dow Jones
38109.4
38519.8
1.1
DAX
16961.4
16859.0
-0.6
CAC 40
7634.1
7588.8
-0.6
ACWI
733.8
735.7
0.3
Hong Kong Hang Seng
15952.2
15566.2
-2.4
Nikkei 225
35751.1
36011.5
0.7

Note: all market data contained within the article is sourced from Bloomberg unless stated otherwise, data as at 1 February 2024.

 

 

2 February 2024
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Market Monitor – 2 February 2024

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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