Market Monitor - 5 November 2021
Insights

Market Monitor – 5 November 2021

Global stock markets have surged this week after central banks in Europe and the United States decided to take a more cautious approach to tightening monetary policy. The Federal Reserve in Washington announced on Wednesday that it would start reducing the size of stimulus measures by $15bn a month – a slower pace than many investors had forecast. Interest rates in the US, meanwhile, will be maintained at the current level for the time being.
On Thursday, the Bank of England’s Monetary Policy Committee (MPC) surprised markets by leaving interest rates and stimulus measures unchanged. Analysts had expected a small rise in the base rate – which has stood at 0.1% since the start of the pandemic – in response to rising prices in the UK. But while the Bank expects inflation in Britain to hit 5% over the winter, the consensus view on the MPC seems to be that hiking rates too soon could put the brakes on a post-pandemic recovery that has already been impeded by shortages and global supply-chain problems.
The ongoing disruption to international trade caused by Covid-19 has continued to affect manufacturers in Europe, North America and Asia, and shipping giant Maersk warned on Tuesday that there was no end to the current crisis in sight.

The US

On Wall Street, the Dow Jones Industrial Average ended trading on Thursday 0.9% up for the week so far, having breached the 36,000-point level for the first time on Monday. The S&P 500 meanwhile gained 1.6%, with many of its constituent technology companies benefiting from the Fed’s decision to wind down its stimulus programme in a more measured fashion. Car rental business Avis was one of the week’s surprise success stories: its shares doubled in value following news that the firm was planning to increase take-up of electric vehicles.

The UK & Europe

In the UK, the FTSE 100 closed on Thursday 0.6% up for the week, with investors reacting positively to the MPC’s lack of action. But its failure to raise interest rates – a move that had effectively been priced in by the markets – hit shares in Britain’s banks.
The UK energy crisis has claimed yet more victims, with business supplier CNG Energy this week becoming the sixth firm to collapse as a result of surging gas prices. However, higher energy prices helped BP to exceed expectations and record an 18% increase in underlying profits for the previous quarter.
AI-based Cybersecurity company Darktrace was one of the biggest losers this week after analysts downgraded its stock. Shares in the firm have now fallen more than a third from last month’s highs.
European shares had an excellent week: in Frankfurt, the DAX index ended Thursday’s session up 2.2%, while France’s CAC 40 gained 2.3%. Positive news from central banks in the UK and US outweighed ongoing concerns about a slowdown in the eurozone’s manufacturing sector – new data showed factory output has declined to its lowest rate since the early weeks of the pandemic. There was also good news for Europe’s airlines, with the removal of travel restrictions boosting profits at Germany’s Lufthansa.

Asia

In China, Hong Kong’s Hang Seng index lost 0.6% as fears of a crisis in the country’s property sector persisted. Japan’s Nikkei 225 index, meanwhile, enjoyed a stellar week, gaining more than 3% following a surprisingly strong election performance for the pro-market Liberal Democrat party.
October 29
November 4
Change (%)
FTSE 100
7237.6
7279.9
0.6
FTSE All-share
4129.2
4160.9
0.8
S&P 500
4605.4
4680.1
1.6
Dow Jones
35819.6
36124.2
0.9
DAX
15688.8
16029.7
2.2
CAC 40
6830.3
6987.8
2.3
ACWI
745.2
755.9
1.4
Hong Kong Hang Seng
25377.2
25225.2
-0.6
Nikkei 225
28892.7
29794.4
3.1

Note: all market data contained within the article is sourced from Bloomberg unless stated otherwise, data as at 4/11/2021.

5 November 2021
Mark King
Mark King
Head of Investment Content
Share article
Share on twitter
Share on linkedin
Share on email
Key topics
Related topics
Share article
Share on twitter
Share on linkedin
Share on email
Key topics
Related topics

PDF

Market Monitor – 5 November 2021

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 and relies on Class Order 03/1102 in marketing and providing financial services to Australian wholesale clients as defined in Section 761G of the Corporations Act 2001. 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.

Related Insights

2 December 2021

Responsible Investment Quarterly - Q3 2021

View the RI team's report from the third quarter of 2021
Read time - 15 min
2 December 2021

Derek Lin & Dara White

Portfolio Manager and China Specialist & Global Head of Emerging Market Equities

Emerging market equities: an exciting universe

Emerging markets are much changed from a decade ago. We talk to Dara White, Head of Global Emerging Markets Equity, and Derek Lin, Portfolio Manager and China specialist, about the major themes driving this universe, why it’s the most exciting time to be invested in EMs, and how we as investors navigate the opportunities and challenges posed by this large and diverse market
Listen time - 30 min
30 November 2021

Fixed Income Desk

In Credit - Weekly Snapshot

In Credit Weekly Snapshot – November 2021

Our fixed income team provide their weekly snapshot of market events.
Read time - 3 min

You may also like

Investment approach

Teamwork defines us and is fundamental to our investment approach, which is structured to facilitate the generation, assessment and implementation of good, strong investment ideas for our portfolios.

Awards

Columbia Threadneedle Investments has received accolades across a wide range of sectors and funds, demonstrating the breadth of our investment expertise.

Contact

For more information about Columbia Threadneedle Investments or our products please contact us.