Market Monitor – 28 October 2022
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Market Monitor – 28 October 2022

Stock markets around the world maintained their recent momentum and made steady gains this week, despite a number of headwinds. A resolution to the UK’s political turmoil has managed to calm bond markets and help the pound recover from recent lows, while solid third-quarter company earnings reports have provided some encouragement to investors.

But central banks remain committed to raising interest rates even further as they strive to bring inflation under control. On Thursday, the European Central Bank (ECB) hiked its benchmark rate by 75 basis points following increases in July and September, while the US Federal Reserve is expected to follow suit next week. This is despite signs that the eurozone and US economies are starting to falter.

US markets

On Wall Street, the Dow Jones Industrial Average ended trading on Thursday 3.1% up for the week so far, with the S&P 500 gaining 1.5%. The latest set of company earnings statements painted a picture of a two-speed economy, where traditional defensive businesses such as banks and consumer goods manufacturers continue to perform well but technology companies are struggling in the face of declining advertising and subscription revenues. However, news that mortgage rates in the US are now at their highest level in more than two decades could be a sign that household budgets may come under even greater pressure in the months ahead.

Europe

In the UK, the FTSE 100 closed on Thursday 1.5% up for the week, with gains limited by a resurgent pound – rises in the value of sterling typically have a dampening effect on the overseas revenues generated by London-listed multinationals. A swift end to the latest Conservative Party leadership contest saw Rishi Sunak chosen as prime minister effectively unopposed. Following Liz Truss’s disastrous foray into fiscal policy, Sunak is seen as a safe pair of hands and, like the pound, government bond prices reacted favourably to his appointment.

In Frankfurt, the DAX index ended Thursday’s session up 3.8% for the week, while France’s CAC 40 gained 3.5%. The ECB’s rate increase came as no surprise, while news that eurozone business activity had fallen at its fastest rate since 2020 also did little to darken investors’ mood. Signs that gas prices may not be as high as previously feared over the coming winter were a particular source of optimism in European markets.

Asia

In Asia, the Hang Seng index in Hong Kong slumped again, losing 4.8% by Thursday’s close. During the recent Communist Party congress it was made clear that the Chinese government would maintain its current zero-Covid policy despite its impact on economic activity. Meanwhile, the country’s growth targets for 2022 have been downgraded by officials.

 

Japan’s Nikkei 225 index of leading shares, meanwhile, gained 1.7% following advances on US markets and the Bank of Japan’s reaffirmed commitment to looser monetary policy.

21 October
27 October
Change (%)
FTSE 100
6969.7
7073.7
1.5
FTSE All-share
3796.9
3873.3
2.0
S&P 500
3752.8
3807.3
1.5
Dow Jones
31082.6
32033.3
3.1
DAX
12730.9
13211.2
3.8
CAC 40
6035.4
6244.0
3.5
ACWI
569.9
580.5
1.8
Hong Kong Hang Seng
16211.1
15427.9
-4.8
Nikkei 225
26890.6
27345.2
1.7

Note: all market data contained within the article is sourced from Bloomberg unless stated otherwise, data as at 27 October 2022.

28 October 2022
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Market Monitor – 28 October 2022

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.

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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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