Market Monitor - 18 June 2021

Market Monitor – 18 June 2021

Global stock markets have managed to hold onto recent gains this week despite increasing speculation that interest rates could be raised sooner than expected.
With above-target inflation a key feature of the global economic recovery in recent weeks, investors have been looking to central bankers for guidance on when it might be necessary to withdraw market stimulus measures and hike rates. And this week’s message from the Federal Reserve in the United States was that interest rates are likely to increase as early as 2023 – rather than in 2024, as most analysts had been predicting.
The Fed’s announcement follows the news last week that inflation in the US had hit its highest level since the financial crisis, with prices also increasing ahead of targets in the eurozone, the UK and China. Share prices initially dipped in the wake of the Fed’s comments, but losses were limited by the central bank’s reassurance that the American economy remained a long way from overheating.
That message was reinforced by official figures published on Thursday showing that new unemployment claims in the US had increased in the past seven days, having hit their lowest point during the crisis last week. This was the latest indication that there are likely to be numerous bumps in the road as major economies recover from the Covid-19 pandemic.
Retail sales in the US, for example, fell faster than expected last month as a result of ongoing supply chain problems and rising input prices. China also reported a slowing of retail sales and factory output for May.

The US

On Wall Street, the Dow Jones Industrial Average ended trading on Thursday 1.9% down for the week so far, with the S&P 500 faring slightly better, losing just 0.6%. Increased interest-rate expectations have strengthened the dollar in recent days, resulting in falls in commodity prices – and, consequently, in the value of many industrial stocks such as chemicals manufacturers and construction firms. At the same time, technology companies have had a solid week, shrugging off concerns that rising rates in the future could lead to lower valuations.

The UK & Europe

In the UK, the FTSE 100 ended Thursday 0.3% ahead for the week, bolstered to some extent by declines in sterling – a falling pound means that the revenues earned overseas by the FTSE’s many multinationals are more valuable. A new row between Britain and the European Union over Northern Ireland’s trade status has caused much of the currency’s weakness.

In the UK, the FTSE 100 ended Thursday 0.3% ahead for the week, thanks in no small part to sterling’s decline against the dollar. A weaker pound typically helps to drive up the valuation of the many multinational businesses listed in London.
But problems the government is facing in reopening the British economy continue to weigh on the UK market: news that the June 21 “freedom day” target has been pushed back by at least four weeks was another blow to hospitality and travel firms – although the suggestion on Thursday that Britain might waive quarantine requirements for vaccinated travellers offered a glimmer of hope.
In Frankfurt, the DAX index ended Thursday’s session up 0.2% for the week, while France’s CAC 40 gained 1%. Eurozone industrial output continued to rise in April, while May’s inflation level was confirmed at 2% – just ahead of the European Central Bank’s target. As has been the case in the UK, European markets have also been boosted by the strengthening dollar.
June 11
June 17
Change (%)
FTSE 100
FTSE All-share
S&P 500
Dow Jones
CAC 40

Note: all market data contained within the article is sourced from Bloomberg unless stated otherwise, data as at 17/6/2021.

18 June 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


Market Monitor – 18 June 2021

Important information

This is an advertising document.

Past performance is not a guide to future performance. The value of investments and any income is not guaranteed and can go down as well as up and may be affected by exchange rate fluctuations. This means that an investor may not get back the amount invested. Your capital is at risk.

The analysis included in this document has been produced by Columbia Threadneedle Investments for its own investment management activities, may have been acted upon prior to publication and is made available here incidentally. Any opinions expressed are made as at the date of publication but are subject to change without notice and should not be seen as investment advice. Information obtained from external sources is believed to be reliable, but its accuracy or completeness cannot be guaranteed.

Any opinions expressed are made as at the date of publication but are subject to change without notice. This presentation includes forward looking statements, including projections of future economic and financial conditions. None of Columbia Threadneedle Investments, its directors, officers or employees make any representation, warranty, guaranty, or other assurance that any of these forward-looking statements will prove to be accurate.

The mention of any specific shares or bonds should not be taken as a recommendation to deal.

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.

Columbia Threadneedle Investments is the global brand name of the Columbia and Threadneedle group of companies.

Related Insights

27 June 2022

Fixed Income Desk

In Credit - Weekly Snapshot

In Credit Weekly Snapshot – June 2022

Our fixed income team provide their weekly snapshot of market events.
Read time - 3 min
24 June 2022

Chris Wagstaff

Head of Pensions and Investment Education

Pensions Watch – Issue 19: What’s been happening and what’s on the horizon in the world of pensions

With trustee investment governance, in many cases, being tested to the limit, in this edition of Pensions Watch we look at the rationale for defined benefit schemes appointing a fiduciary manager and whether fiduciary management has delivered to expectations.
Read time - 24 min
22 June 2022

James Thorne

Portfolio manager

Craig Adey

Portfolio manager

UK small and mid-cap: for the rebound and beyond

Portfolio managers Craig Adey and James Thorne discuss how UK small and mid-caps have historically outperformed significantly following a cyclical trough, and the opportunity this presents in the future as investors in this space.
Read time - 6 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.

Funds and Prices

Columbia Threadneedle Investments has a comprehensive range of investment funds catering for a broad range of objectives.

Investment Strategies

We offer a broad range of actively managed investment strategies and solutions covering global, regional and domestic markets and asset classes.

Please confirm a few details about yourself to visit your preference centre

*Mandatory fields

Something went wrong, please try again

Thank you. You can now visit your preference centre to choose which insights you would like to receive by email.

To view and control which insights you receive from us by email, please visit your preference centre.