Market Monitor – 21 July 2023
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Market Monitor – 21 July 2023

Global stock markets have made solid gains this week following recent signs that inflation is starting to slow

Solid company earnings reports for the second quarter of 2023 have also lifted investors’ mood and raised the prospect of a “soft landing” for the world’s major economies following the steep interest rate rises imposed over the past 18 months. The big economic news this week was the UK Consumer Prices Index reading for June, which came in below expectations at 7.9%. Given the fact that inflation in Britain has proved stickier than in Europe or North America in recent months, the figure boosted sentiment considerably.

United States

On Wall Street, the Dow Jones Industrial Average ended trading on Thursday 2.1% up for the week so far, with the S&P 500 gaining 0.7%. There were fresh signs of a slowing US economy, with retail sales for June coming in below expectations and indications that the housing market was cooling. However, combined with last week’s fall in inflation, the pressure on the Federal Reserve to raise interest rates appears to be receding. Investors welcomed comments from Treasury Secretary Janet Yellen that the US was unlikely to enter recession this year, although mixed earnings reports from major technology companies held back gains on the tech-heavy S&P 500 and Nasdaq indexes.

UK

In the UK, the FTSE 100 closed on Thursday 2.8% up for the week so far, with the index recovering most of the losses incurred since the start of the month. Housebuilders were the main beneficiaries from the fall in inflation, with interest rates in Britain now expected to peak below 6% later this year. The outlook for the UK economy remains mixed, nevertheless: latest figures showed insolvencies were up by nearly a third in June compared to the same month in 2022, while recent falls in property prices are reportedly starting to dampen consumer confidence.

Europe

In Frankfurt, the DAX index ended Thursday’s session up 0.6% for the week, while France’s CAC 40 gained 0.1%. Gains in Europe were limited by lacklustre data from China, with second quarter growth coming in below expectations. Meanwhile, a downbeat trading forecast from a major Asian semiconductor manufacturer hurt sentiment in the technology sector. However, there was some positive news with comments from a European Central Bank official indicating that next week’s expected interest rate hike could be the last in the current cycle.

Asia

In Asia, the Hang Seng index in Hong Kong dipped 2.5% as Chinese GDP growth undershot forecasts while government tax revenues also showed an unexpected decline. Officials reiterated their commitment to providing extra stimulus for China’s economy, but investors remained unconvinced that such measures will prove to be effective. Japan’s Nikkei 225 index of leading shares advanced 0.3%, hitting a two-week high on Wednesday following the Bank of Japan’s renewed commitment to maintaining its relaxed stance on monetary policy. However, technology firms declined on Thursday on wider concerns about the outlook for the semiconductor sector.

14 July
20 July
Change (%)
FTSE 100
7434.6
7646.1
2.8
FTSE 250
18566.8
19311.7
4.0
S&P 500
4505.4
4534.9
0.7
Dow Jones
34509.0
35225.2
2.1
DAX
16105.1
16204.2
0.6
CAC 40
7374.5
7384.9
0.1
ACWI
695.7
697.5
0.3
Hong Kong Hang Seng
19413.8
18928.0
-2.5
Nikkei 225
32391.2
32490.5
0.3

Note: all market data contained within the article is sourced from Bloomberg unless stated otherwise, data as at 20 July 2023.

21 July 2023
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Market Monitor – 21 July 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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