Market Monitor – 24 March 2023
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Market Monitor – 24 March 2023

Calm has returned to global stock markets in recent days as concerns about the fallout from the failure of two major banks receded

Heavy losses were endured at the end of last week as investors feared possible contagion following the collapse of Credit Suisse.

However, news over the weekend that the bank had been taken over by domestic rival UBS helped to ease nerves, with regulators in numerous jurisdictions around the world emphasising that their financial systems were largely resilient.

A potential silver lining to the recent crisis could be that banks in general may become more reluctant to offer loans, thus aiding central bank’s efforts to bring inflation under control without the need for several more interest rate rises. While the Federal Reserve and the Bank of England hiked rates again this week, both did so by just 25 basis points. There is increasing speculation that the period of monetary policy tightening could be near its end – in the United States and United Kingdom at least.

United States

On Wall Street, the Dow Jones Industrial Average ended trading on Thursday 0.8% up for the week so far, with the S&P 500 matching its performance. Investors in the US have struggled to decide whether the potential benefits of lower interest rates outweigh the higher level of risk currently associated with the financial sector. Appearing in Congress this week, Treasury Secretary Janet Yellen did her best to calm nerves by indicating that the Biden administration is likely to offer additional protection for bank deposits in the event of further turmoil – although it is not yet clear what form this might take.

UK

In the UK, the FTSE 100 closed on Thursday 2.2% up for the week so far with relief over the resolution of the Swiss banking crisis driving gains on Monday and Tuesday in particular. As optimism about global growth returned, London-listed commodity businesses performed well, helped by a fall in the value of the dollar as interest rate expectations in the US fell back. Latest figures showed a surprise uptick in the rate of inflation in the UK in February, driven in part by rises in fresh produce costs following a shortage of imports from southern Europe. However, in announcing the latest interest rate increase, Bank of England officials said they expected the rate of price rises to ease in the coming months.

Europe

In Frankfurt, the DAX index ended Thursday’s session up 3% for the week, while France’s CAC 40 gained 3.1%. Both indexes recouped some of the losses experienced since the banking crisis began at the start of the month. Share prices were particularly volatile on Monday as investors tried to assess the UBS takeover of Credit Suisse, but a lack of further bad news helped to bolster sentiment as the week progressed. However, figures published on Thursday showed a surprise fall in consumer confidence in February.

Asia

In Asia, the Hang Seng index in Hong Kong gained 2.7% as investors welcomed a less turbulent few days on global markets. Technology stocks were especially strong as hopes of a slower pace of monetary policy tightening grew. Japan’s Nikkei 225 index of leading shares advanced 0.3%. This slight rise comes despite the index having slumped to a two-month low on Monday on banking sector concerns, although these dissipated in the days that followed. Strength in the motor manufacturing sector and among semiconductor firms also helped support market gains.

17 March
23 March
Change (%)
FTSE 100
7335.4
7499.6
2.2
FTSE 250
18470.8
18730.0
1.4
S&P 500
3916.6
3948.7
0.8
Dow Jones
31862.0
32105.3
0.8
DAX
14768.2
15210.4
3.0
CAC 40
6925.4
7139.3
3.1
ACWI
616.6
626.4
1.7
Hong Kong Hang Seng
19518.6
20049.64
2.7
Nikkei 225
27333.8
27419.6
0.3

Note: all market data contained within the article is sourced from Bloomberg unless stated otherwise, data as at 23 March 2023.

24 March 2023
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Market Monitor – 24 March 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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