Market Monitor – 5 July 2024
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Market Monitor – 5 July 2024

Global stock markets surged ahead this week as the prospect of an interest rate cut in the United States grows ever closer, while concerns about political uncertainty in Europe eased following the first round of voting in France’s snap national election

Investors seized on comments from US Federal Reserve chair, Jerome Powell, that “significant progress” had been made in the battle against inflation. Weaker data from the American economy also increased the pressure on the Fed to release the handbrake of tight monetary policy and added to the sense of optimism. In the UK, an expected landslide general election victory by the opposition Labour party was forecast to be a positive for business confidence and the wider stock market.

United States

On Wall Street, the Dow Jones Industrial Average ended trading on Wednesday, ahead of the 4 July Independence Day holiday, 0.5% up for the week so far, with the S&P 500 gaining 1.4% to reach an all-time closing high. Signs of further weakness in the manufacturing sector, as well as indications that labour markets may finally be cooling down, could spur the Fed to reduce rates at the end of this month – but analysts believe a cut in September is more likely. Investors await the monthly non-farm payroll data, due to be published on Friday, for further guidance.

UK

In the UK, the FTSE 100 closed on Thursday 0.9% up for the week so far—thanks to positive economic data and hopes of a period of political stability in the wake of the general election. There were further signs of recovery in both the manufacturing and construction sectors, while carmakers reported that sales of new vehicles had rebounded to pre-pandemic levels. Large-cap energy firms in London also benefited from a rise in the price of oil, with crude values up in response to concerns about potential supply disruptions in the US due to extreme weather conditions in the Gulf of Mexico.

Europe

In Frankfurt, the DAX index ended Thursday’s session up 1.2% for the week, while France’s CAC 40 gained 2.9%. The rally in European stocks was largely due to indications from last Sunday’s first round of voting in France that Marine Le Pen’s far-right National Rally party would be unlikely to command a majority in the French parliament. The prospect of a deadlocked legislature is thought to reduce the chances of significant disruption to financial markets. Although consumer inflation in the eurozone fell slightly to 2.5% in June, the European Central Bank appears unlikely to reduce interest rates again until September at the earliest.

Asia

In Asia, the Hang Seng index in Hong Kong gained 1.7% after improved manufacturing data provided more evidence of China’s economic recovery. Investors also welcomed signs that officials in the European Union may be willing to rethink their plans to impose tariffs on imports of Chinese-made electric vehicles. Japan’s Nikkei 225 index of leading shares, meanwhile, advanced 3.4% to reach another record high. Further weakness in the yen drove inflows, with particularly strong gains in motor manufacturers, banks and technology stocks.

June 28
July 4
Change (%)
FTSE 100
8164.1
8241.3
0.9
FTSE 250
20286.0
20610.3
1.6
S&P 500
5460.5
5537.0
1.4
Dow Jones
39118.9
39308.0
0.5
DAX
18235.5
18450.5
1.2
CAC 40
7479.4
7695.8
2.9
ACWI
802.0
815.2
1.6
Hong Kong Hang Seng
17718.6
18028.3
1.7
Nikkei 225
39583.1
40913.7
3.4

Note: all market data contained within the article is sourced from Bloomberg unless stated otherwise, data as at 4 July 2024.

5 July 2024
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Market Monitor – 5 July 2024

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.

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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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