Market Monitor – 11 November 2022
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Market Monitor – 11 November 2022

Signs that inflation in the world’s biggest economy may have reached a peak sent global share prices soaring this week as investors hoped the pace of interest rate rises could soon start to slow. The news on Thursday that annual growth in the US consumer price index (CPI) had dropped to 7.7% in October compared with 8.2% a month earlier was welcomed by investors. Markets were especially relieved that the Bureau of Labor Statistics’ core measure of inflation, which excludes energy and food costs, had also declined following unexpected increases in August and September. In particular, the technology and other high-growth stocks that had been hit hardest by 2022’s tightened monetary policy recorded strong gains. Bond markets now expect the Federal Reserve to raise interest rates in December by just 50 bps following a string of 75bps rises. As well as boosting stock markets, the news caused the dollar to fall sharply.

US markets

On Wall Street, the Dow Jones Industrial Average ended trading on Thursday 4% up for the week so far, with the S&P 500 gaining 4.9%. The technology-heavy Nasdaq index, meanwhile, advanced by more than 7%. Stocks in the US enjoyed their best single day’s trading in more than two years when the inflation figures were announced.

Up until that point, the week had been mixed with a lack of clarity over the results of the US midterm elections which failed to provide direction. New data showed a sharp fall in confidence among America’s small businesses, highlighting the ongoing impact of this year’s rising prices and higher interest rates.

Europe

In the UK, the FTSE 100 closed on Thursday 0.6% up for the week. Shares in Britain’s biggest companies saw their gains limited by the rise in the pound against the dollar, which reduces the sterling value of their international revenues. Economic indicators in the UK remained weak, with latest figures showing home repossessions leapt in the third quarter of the year while house prices slowed considerably in October. At the same time, falling consumer spending has thrown the future of several major retailers into doubt.

In Frankfurt, the DAX index ended Thursday’s session up 5.1% for the week, while France’s CAC 40 gained 2.2%. Investors welcomed the news that German industrial production had increased in September, despite concerns about manufacturers’ energy costs, following a drop in August. The fall in the value of the dollar is likely to be a positive development for European markets as it should lead to lower import and fuel costs, potentially helping to ease inflationary pressures over the winter.

Asia

In Asia, major indices had closed by the time the US inflation data was published, although they were expected to see a bounce in Friday’s session. By Thursday’s close, the Hang Seng index in Hong Kong had dipped 0.5% following last week’s gains, with concerns growing that the local economy may not be able to reopen as quickly as investors had hoped. Official data showed that China’s international trade had declined in October while factory-gate prices were also down. Japan’s Nikkei 225 index of leading shares rose 0.9% with gains limited by the unclear political news from the US.

4 November
10 November
Change (%)
FTSE 100
7334.8
7375.3
0.6
FTSE All-share
4001.8
4054.7
1.3
S&P 500
3770.6
3956.4
4.9
Dow Jones
32403.2
33715.4
4.0
DAX
13459.9
14146.1
5.1
CAC 40
6416.4
6556.8
2.2
ACWI
580.6
612.7
5.5
Hong Kong Hang Seng
16161.1
16081.0
-0.5
Nikkei 225
27199.7
27446.1
0.9

Note: all market data contained within the article is sourced from Bloomberg unless stated otherwise, data as at 10 November 2022.

14 November 2022
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Market Monitor – 11 November 2022

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.

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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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