Market Monitor – 26 July 2024

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Market Monitor – 26 July 2024

Jim Griffin
Jim Griffin
Investment Content Manager

Global stock markets have endured another challenging week as doubts about artificial intelligence’s capacity to drive growth have sparked further losses among the world’s largest technology firms.

The week started positively as concern around the disruption caused by last weekend’s major IT network failure started to ease, and investors reacted relatively calmly to news that Joe Biden had decided to withdraw from the US presidential race. However, disappointing quarterly trading reports in the tech sector highlighted the uncertainty surrounding AI’s ability to deliver meaningful earnings growth in the short to medium term.

United States

On Wall Street, the Dow Jones Industrial Average ended trading on Thursday 0.9% down for the week so far, with the S&P 500 falling 1.9%. The rotation into small-cap stocks in the US continued in the wake of lacklustre earnings reports from major technology firms. Share prices recovered some of their lost ground on Thursday after new data showed American GDP had grown more quickly than expected in the second quarter. However, despite the ongoing resilience of the US economy, markets still expect the Federal Reserve to cut interest rates at its September meeting.

UK

In the UK, the FTSE 100 closed on Thursday 0.4% up for the week so far. Stocks in London were supported by positive quarterly trading reports as well as upbeat economic data, with figures for business activity in July indicating the strongest rate of private-sector growth since April 2023. Solid earnings figures from travel and consumer goods companies supported gains later in the week, although there were further signs of difficulties in Britain’s utilities sector. Meanwhile, official figures highlighted a slump in housebuilding activity between April and June, and London-listed miners were hit by a decline in copper prices.

Europe

In Frankfurt, the DAX index ended Thursday’s session up 0.7% for the week, while France’s CAC 40 fell 1.4%. Further signs of weakness in the German economy raised hopes that the European Central Bank will be more inclined to cut interest rates again soon. There was positive news in the shape of improving consumer confidence across the European Union, but stocks in France suffered from weakness among luxury-good firms as well as carmakers.

Asia

In Asia, the Hang Seng index in Hong Kong fell 2.4% despite the surprise decision by China’s central bank to cut interest rates at the start of the week. The move was seen by investors as an admission that the country is in urgent need of additional stimulus measures if it is to meet its economic growth targets for the year. Japan’s Nikkei 225 index of leading shares, meanwhile, slumped 5.5%, returning to levels not seen since April. The country’s technology sector was particularly hard hit by the deterioration in sentiment around AI, while a rise in the value of the yen also had a negative impact on the many Tokyo-listed multinationals.

July 19
July 25
Change (%)
FTSE 100
8155.7
8186.4
0.4
FTSE 250
21067.7
20884.4
-0.9
S&P 500
5505.0
5399.2
-1.9
Dow Jones
40287.5
39935.1
-0.9
DAX
18171.9
18303.9
0.7
CAC 40
7534.5
7427.0
-1.4
ACWI
810.9
796.8
-1.7
Hong Kong Hang Seng
17417.7
17005.0
-2.4
Nikkei 225
40063.8
37869.5
-5.5

Note: all market data contained within the article is sourced from Bloomberg unless stated otherwise, data as at 25 July 2024.

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Market Monitor – 26 July 2024

Important information

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

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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