Market Monitor – 24 May 2024
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Market Monitor – 24 May 2024

Global stock markets endured a difficult week after investors’ hopes of imminent cuts to interest rates in the United States and Europe were dampened by unexpectedly strong economic data.

Concerns about the escalation of geopolitical tensions in the Middle East following the death of Iran’s president in a helicopter crash also created uncertainty at the start of the week, pushing the price of gold and oil back towards recent highs.

A strong quarterly earnings report from one of the world’s biggest semiconductor companies helped lift technology stocks on Wednesday and Thursday, but pessimism around further delays to central banks’ loosening of monetary policy was once again the dominant theme.

United States

On Wall Street, the Dow Jones Industrial Average ended trading on Thursday down 2.3% for the week so far, with the S&P 500 falling 0.7%. The Dow’s 600-point fall on Thursday represented its worst single-day performance of the year. It was sparked by recent data showing a surprisingly large decline in unemployment claims in the US alongside increasing price pressures among American manufacturers. Both pieces of news will add to the Federal Reserve’s view that inflation has not yet been brought under control, making it considerably less likely that interest rates will be cut over the summer.

UK

In the UK, the FTSE 100 closed on Thursday 1% down for the week so far. The index was boosted on Monday by rising oil and metal prices, but as fears over the situation in the Middle East eased, so too did commodity values. The International Monetary Fund said it was increasingly likely the British economy would be able to achieve a soft landing this year and upgraded its growth forecasts. Wednesday’s inflation data showed the consumer prices index had fallen to 2.3% – although analysts had expected a steeper decline – and UK markets reacted calmly to Prime Minister Rishi Sunak’s unexpected announcement of a general election on 4 July.

Europe

In Frankfurt, the DAX index ended Thursday’s session down 0.1% for the week, while France’s CAC 40 fell 0.8%. European investors faced a similar situation to those in the US, with stronger private sector data published towards the end of the week appearing to reduce the probability that the European Central Bank will cut rates at its June meeting. However, there were encouraging signs that price pressures on German factories have started to ease.

Asia

In Asia, the Hang Seng index in Hong Kong dropped 3.5% as its highly volatile year continued. Chinese stocks gave up some of their recent gains as investors waited for further signs that the country’s economic recovery is gathering steam. Shares in one of the country’s biggest technology conglomerates fell sharply on speculation it is about to issue a convertible bond that will lead to some degree of equity dilution. Japan’s Nikkei 225 index of leading shares, meanwhile, advanced 0.8% after recent figures showed a welcome expansion of output in May. Japan’s technology sector was also boosted by positive corporate news from a major American peer.

May 17
May 23
Change (%)
FTSE 100
8420.3
8339.2
-1.0
FTSE 250
20749.9
20631.3
-0.6
S&P 500
5303.3
5267.8
-0.7
Dow Jones
40003.6
39065.3
-2.3
DAX
18704.4
18686.6
-0.1
CAC 40
8167.5
8102.3
-0.8
ACWI
795.0
789.0
-0.8
Hong Kong Hang Seng
19553.6
18868.7
-3.5
Nikkei 225
38787.4
39103.2
0.8

Note: all market data contained within the article is sourced from Bloomberg unless stated otherwise, data as at 23 May 2024.

24 May 2024
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Market Monitor – 24 May 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 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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