Market Monitor – 6 September 2024

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Market Monitor – 6 September 2024

Jim Griffin
Jim Griffin
Investment Content Manager

Global stock markets suffered heavy losses this week as concerns about the health of the US economy re-emerged.

There was a partial repeat of the early-August sell-off, which was likewise sparked by disappointing data from the American manufacturing sector and jobs market. While a slowdown in factory activity and hiring rates perhaps should not come as a surprise given the tight monetary policy of the past two years, the resilience of the US economy for much of the period appears to have lulled investors into a false sense of security. The question is no longer whether the Federal Reserve will cut rates later this month, but by how much: markets now believe there is a roughly even chance of a 0.5% reduction rather than the 0.25% previously forecast.

United States

On Wall Street, the Dow Jones Industrial Average ended trading on Thursday 1.9% down for the week so far, with the S&P 500 slumping 2.6%. Technology stocks were among those hit hardest by the economic gloom, and the tech-heavy Nasdaq index fell even more sharply. Declines were initially caused by a survey that showed a fresh contraction in manufacturing activity, while separate reports showed a drop in new job openings and a rise in redundancies. There was a short-lived recovery on Thursday following the publication of statistics that highlighted further growth in the services sector in August. However, Friday’s non-farm payroll data – the most authoritative indicator of employment market health – is likely to set the tone for next week.

UK

In the UK, the FTSE 100 closed on Thursday 1.6% down for the week so far following falls in the US. Further weakness in oil prices also hit London’s major energy companies. The prospect of lacklustre growth in the US, Europe and China weighed on crude, as did signs that major oil-exporting countries were considering an end to current production restrictions later in the year. There was some positive economic news, with August confirmed to be the strongest month for factory output in two years, and signs of further growth in the housing sector. Press reports suggested that the Labour government plans to scrap the British ISA, which was announced by the Conservatives in March. The ISA would have given investors an additional tax-free allowance to be used to buy shares in London-listed companies.

 

Europe

In Frankfurt, the DAX index ended Thursday’s session down 1.6% for the week, while France’s CAC 40 lost 2.6%. Data published during the week continued to paint a gloomy picture for the eurozone, with weakness in France and Germany leading to a contraction in manufacturing in August. Shares in luxury goods firms fell due to concerns about consumer spending in Asia, and one of Germany’s largest motor manufacturers unveiled plans to reduce the size of its operations and workforce. There were also worrying signs of increasing price pressures on businesses. The return of inflation could force the European Central Bank to pause its programme of interest rate cuts.

Asia

In Asia, the Hang Seng index in Hong Kong fell 3% after figures published at the start of the week highlighted the ongoing challenges faced by China’s manufacturers. There were calls for the government to provide additional stimulus measures, in the household sector in particular. Japan’s Nikkei 225 index of leading shares, meanwhile, dropped 5.2% following falls in US technology stocks and growing expectations of another Bank of Japan interest rate rise. The prospect of higher domestic rates alongside expectations of sharp cuts in the US have resulted in a stronger yen, which has weighed on share prices in Tokyo.

August 30
September 5
Change (%)
FTSE 100
8376.6
8241.7
-1.6
FTSE 250
21086.5
21086.5
-1.5
S&P 500
5648.4
5503.4
-2.6
Dow Jones
41563.1
40755.8
-1.9
DAX
18906.9
18595.5
-1.6
CAC 40
7631.0
7432.0
-2.6
ACWI
833.7
812.7
-2.5
Hong Kong Hang Seng
17989.1
17444.3
-3.0
Nikkei 225
38647.8
36657.1
-5.2

Note: all market data contained within the article is sourced from Bloomberg unless stated otherwise, data as at 5 September 2024.

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Market Monitor – 6 September 2024

Important information

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

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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