Market Monitor – 30 June 2023

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Market Monitor – 30 June 2023

Global stock markets have made solid progress this week despite the latest positive economic data increasing the likelihood of further interest rate rises in the months ahead

Figures published in the United States and Germany over the past few days suggest the tighter monetary policy initially introduced to curb inflation in early 2022 is yet to have a significant negative impact on business activity. For investors, this is a double-edged sword. While continued growth is likely to be beneficial for company earnings, it increases the likelihood of central banks raising rates again over the summer, thus increasing the risk of a slowdown in the world’s largest economies.

United States

On Wall Street, the Dow Jones Industrial Average ended trading on Thursday 1.2% up for the week so far, with the S&P 500 close behind with a gain of 1.1%. There were further positive economic figures in the US this week, with strength in orders of durable goods and an unexpected fall in unemployment claims. Federal Reserve officials said this made another interest rate rise this summer very likely. However, markets were buoyed on Thursday by the news that America’s major banks had passed the regulator’s stress tests carried out in response to the financial sector crisis in March and April.

UK

In the UK, the FTSE 100 closed on Thursday just 0.1% up for the week so far, with investors in London concerned about recent developments in Britain’s privatised water industry. On Tuesday, it was reported that a major English water utility was facing severe difficulties due to its high level of debt as borrowing costs were rising. This raised fears that other firms in the sector – as well as the likes of gas and electricity suppliers – could be affected by similar issues. Mortgage rates in the UK, meanwhile, continue to rise, hitting seven-month highs at the start of the week, while latest figures showed a fall in retail sales in June.

Europe

In Frankfurt, the DAX index ended Thursday’s session up 0.7% for the week, while France’s CAC 40 gained 2.1%. Officials said the German economy was likely to have returned to growth in the second quarter of 2023, although figures published on Thursday showed that inflation in the country had risen more than expected in June. The French market was lifted by strength in major motor manufacturers, while technology companies across Europe were boosted by hopes of artificial intelligence (AI)-driven growth.

Asia

In Asia, the Hang Seng index in Hong Kong rose 0.2%, with the government stating that growth in the second quarter was likely to be an improvement on the first three months of the year. However, investors gave a lukewarm reaction to Beijing’s latest stimulus measures, and there were concerns around the US’s plan to limit the supply of microchips for use in AI applications by Chinese firms. Japan’s Nikkei 225 index of leading shares, meanwhile, advanced 1.4% as the weakening yen provided a boost for the country’s exporters, in the motor industry in particular.

23 June
29 June
Change (%)
FTSE 100
7461.9
7471.7
0.1
FTSE 250
18062.3
18270.7
1.2
S&P 500
4348.3
4396.4
1.1
Dow Jones
33727.4
34122.4
1.2
DAX
15829.9
15946.7
0.7
CAC 40
7163.4
7312.7
2.1
ACWI
669.8
675.9
0.9
Hong Kong Hang Seng
18890.0
18934.4
0.2
Nikkei 225
32781.5
33234.1
1.4

Note: all market data contained within the article is sourced from Bloomberg unless stated otherwise, data as at 29 June 2023.

30 June 2023
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Market Monitor – 30 June 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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