Market Monitor – 14 July 2023
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Market Monitor – 14 July 2023

The news that inflation is falling more sharply than expected in the world’s biggest economy has cheered investors and driven global stock markets sharply higher this week

Wednesday’s consumer price index (CPI) report in the United States showed that prices rose at an annualised rate of 3% in June, marginally lower than market expectations. This is the latest indication that the Federal Reserve and other central banks may soon bring their interest rate raising programmes to an end. Elsewhere, reports of further stimulus measures by the Chinese government lifted stocks in Asia, while oil prices increased on fears that Russian output levels could fall in the months ahead.

United States

On Wall Street, the Dow Jones Industrial Average ended trading on Thursday 2% up for the week so far, with the S&P 500 gaining 2.5%. The positive CPI data was backed up later in the week by figures that showed producer price inflation had fallen for a 12th consecutive month in June. Traders now predict that a 0.25 percentage point interest rate increase later this month will be the Fed’s last hike of its current cycle. The prospect of lower rates helped technology stocks make solid gains, although reports of a rise in new unemployment claims earlier in July was further evidence of America’s tight labour market – a factor that could increase inflationary pressures in the months ahead.

UK

In the UK, the FTSE 100 closed on Thursday 2.5% up for the week so far – thanks to strength in energy companies and optimism about falling US inflation. However, gains in London were limited by a rise in the value of sterling against the dollar. Figures that showed UK wage growth running at 7.3% a year in June were another indication that the Bank of England may need to continue raising rates for significantly longer than the Fed. Meanwhile, mortgage rates continued their upwards trajectory, and analysts downgraded earnings forecasts in Britain’s property sector. Recent government data revealed that UK GDP had declined in May following April’s small uptick.

Europe

In Frankfurt, the DAX index ended Thursday’s session up 3.4% for the week, while France’s CAC 40 gained 3.6%. Share prices in the eurozone benefited from optimism about economic growth in both the US and China, although research published on Tuesday suggested confidence among businesses in Germany had fallen to a seven-month low. Nonetheless, investors are hopeful that the higher rates introduced over the past 12 months by the European Central Bank will be as effective in bringing inflation under control as they appear to have been across the Atlantic.

Asia

In Asia, the Hang Seng index in Hong Kong surged 5.4% to end a dismal run that started in mid-June. News that the Beijing government was planning fresh stimulus measures to boost growth in China’s beleaguered real estate sector drove prices higher on Tuesday, and there were further gains during Thursday’s session after ministers indicated that the recent crackdown on major Chinese technology companies could soon come to an end. Meanwhile, having set the pace for much of 2023, Japan’s Nikkei 225 index of leading shares advanced by just 0.1%, with the weakening dollar weighing on prices to some extent.

7 July
13 July
Change (%)
FTSE 100
7256.9
7440.2
2.5
FTSE 250
18004.0
18631.7
3.5
S&P 500
4399.0
4510.0
2.5
Dow Jones
33734.9
34395.1
2.0
DAX
15603.4
16141.0
3.4
CAC 40
7111.9
7369.8
3.6
ACWI
673.4
696.4
3.4
Hong Kong Hang Seng
18365.7
19350.6
5.4
Nikkei 225
32388.4
32419.3
0.1

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

14 July 2023
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Market Monitor – 14 July 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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