Market Monitor – 14 April 2023
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Market Monitor – 14 April 2023

Global stock markets have extended their recent gains, thanks to new evidence that inflation is regressing

Recent data from the United States has added weight to the view that higher interest rates are finally managing to curb price rises in the world’s largest economy, and raised hopes that the Federal Reserve – and other central banks – may soon stop tightening monetary policy.

Although the monthly headline US inflation figure for March showed a welcome fall, markets reacted nervously at first because core inflation – which ignores more volatile elements such as fuel and food costs – had increased. However, figures published on Thursday showing a drop in prices paid by businesses helped to calm nerves and drove share prices higher. Despite this optimism, increased headwinds remain. The latest forecasts from the International Monetary Fund (IMF) underlined the high level of uncertainty surrounding global growth predictions in 2023, although the organisation suggested that interest rates would soon start to recede. Geopolitical concerns also weighed on markets, with a series of Chinese military exercises off the coast of Taiwan adding to existing tensions at the start of the week.

United States

On Wall Street, the Dow Jones Industrial Average ended trading on Thursday 1.6% up for the week so far, with the S&P 500 rising 1.0%. Technology stocks fared particularly well as yields on US Treasuries fell in response to the upbeat inflation news. High-growth businesses are likely to benefit most from an early halt to the Fed’s interest-rate raising programme. The focus now shifts to the next round of company earnings reports as investors attempt to assess the extent of the economic damage caused by tighter monetary policy and rapidly rising prices.

UK

In the UK, the FTSE 100 closed on Thursday 1.3% up for the week. The IMF said it now expected the British economy to contract by only 0.3% this year compared to the 0.6% decline predicted in January. Conversely, official data  revealed that UK GDP unexpectedly flatlined in February, as widespread industrial action took its toll. A rise in mortgage defaults was the latest evidence of the cost-of-living crisis, but UK housebuilders took heart from a new survey indicating a potential rebound in construction activity later in 2023.

Europe

In Frankfurt, the DAX index ended Thursday’s session up 0.8% for the week, while France’s CAC 40 gained 2.1% to close at a new record high. Shares in Paris were boosted by the strength in French luxury-goods companies, which have benefited from a resurgence of demand in Asia following China’s reopening. New research showed that investor sentiment in the eurozone had improved in April following a surprise fall last month.

Asia

In Asia, the Hang Seng index in Hong Kong edged 0.1% ahead, with gains limited by concerns about Beijing’s belligerence towards Taiwan, alongside losses among technology firms. Several high-profile sales of holdings in major tech businesses harmed sentiment across the wider sector. Japan’s Nikkei 225 index of leading shares, meanwhile, advanced 2.3% after five consecutive sessions of gains. Stocks in Tokyo benefited from the news that veteran investor Warren Buffett was reported to be bullish on the market’s growth prospects, as well as from strong earnings reports in the retail sector.

7 April
13 April
Change (%)
FTSE 100
7741.6
7843.4
1.3
FTSE 250
18797.0
19070.1
1.5
S&P 500
4105.0
4146.2
1.0
Dow Jones
33485.3
34029.7
1.6
DAX
15597.9
15729.5
0.8
CAC 40
7324.8
7480.8
2.1
ACWI
646.1
655.0
1.4
Hong Kong Hang Seng
20331.2
20344.48
0.1
Nikkei 225
27518.3
28157.0
2.3

Note: all market data contained within the article is sourced from Bloomberg unless stated otherwise, data as at 13 April 2023.

14 April 2023
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Market Monitor – 14 April 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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