Market Monitor – 24 February 2023
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Market Monitor – 24 February 2023

Global stock markets have endured another week of losses as investors face continued uncertainty about the extent of future interest rate rises

While improving economic data from major markets in North America and Europe would under normal circumstances be a cause for celebration, this is not the case in the current climate of persistent high inflation. Instead, signs of economic strength provide central banks with the option of continuing their current path of monetary policy tightening, with higher rates expected to act as a brake on medium-term growth as well as a dampener on company valuations.

Sentiment has also been hit by increasing geopolitical tensions as Russia’s president Vladimir Putin marked the first anniversary of Russia’s invasion of Ukraine by threatening to withdraw from a major nuclear disarmament treaty. Signs that the Chinese government is providing greater levels of political and economic support for their Russian counterparts has only made the situation more unpredictable.

United States

On Wall Street, the Dow Jones Industrial Average ended trading on Thursday 2% down for the week so far, with the S&P 500 shedding 1.6%. Data published on Tuesday showed a rebound in the American services sector, raising the likelihood of steeper interest rate hikes from the Federal Reserve in the first half of 2023. US markets responded with their worst day’s trading so far this year, with technology stocks being hardest hit. However, tech shares recovered some ground from Wednesday following a bullish forecast published by a leading semiconductor company.

UK

In the UK, the FTSE 100 closed on Thursday 1.2% down for the week so far, with shares in London also declining on rate rise fears. As was the case in the US, the British services sector returned to growth this month, while government borrowing in January fell unexpectedly following a surge in tax receipts. Weakness in global commodity markets also hit a number of the FTSE’s mining and energy companies, although there were positive trading statements from businesses in the aerospace and advertising sectors.

Europe

In Frankfurt, the DAX index ended Thursday’s session level for the week, while France’s CAC 40 lost 0.4%. New research showed the strongest eurozone growth levels since last spring, and while core inflation – which excludes the likes of energy and food costs – reached a new high in January, business sentiment continues to improve. Strong fourth-quarter results from the semiconductor and telecoms sectors also helped European markets avoid the losses seen in the US and UK.

Asia

In Asia, the Hang Seng index in Hong Kong dipped 1.8% after a mixed few days. The week began on a bright note on hopes for strong growth in 2023, with markets across China enjoying one of their best sessions since the autumn. The bounce was short-lived, however, as wider concerns about monetary policy in Western markets returned to centre stage. Meanwhile, Japan’s Nikkei 225 index of leading shares lost 1.5%, with the threat of steeper US interest rate hikes combining with weak manufacturing sector performance and concerns about rising domestic inflation to depress share prices.

17 February
23 February
Change (%)
FTSE 100
8004.4
7907.7
-1.2
FTSE All-Share
20088.9
19790.5
-1.5
S&P 500
4079.1
4012.3
-1.6
Dow Jones
33826.7
33153.9
-2.0
DAX
15482.0
15475.7
0.0
CAC 40
7347.7
7317.4
-0.4
ACWI
645.0
635.4
-1.5
Hong Kong Hang Seng
20719.8
20351.35
-1.8
Nikkei 225
27513.1
27104.3
-1.5

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

24 February 2023
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Market Monitor – 24 February 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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