Market Monitor – 11 February 2022
Insights

Market Monitor – 11 February 2022

New concerns about the pace of interest rate rises in the coming months have put a brake on global stock market gains. While share prices once again enjoyed a strong start to the week – with major indices boosted by advances in technology stocks in particular – new inflation data and cautionary comments from central bankers on Thursday saw a significant degree of pessimism return to the markets.
With no monetary policy meetings imminent and a lack of new developments in the Ukraine stand-off, investors spent much of Monday, Tuesday and Wednesday focusing on strong company earnings performance – driving markets in the United States, Europe and Asia back towards the highs seen at the end of 2021.
But this exuberance was curtailed by data from the US on Thursday which showed that inflation had risen faster than expected to 7.5%, its highest level since 1982. Of particular concern was the fact that almost every sector of the American economy is now experiencing significant price rises: a fact that makes a sizeable interest rate rise at the next Federal Reserve meeting in March even more likely.

The US

On Wall Street, the Dow Jones Industrial Average ended trading on Thursday 0.4% up for the week so far, with the S&P 500 just 0.1% ahead. Both indices suffered heavy losses in the latter stages of Thursday’s session after a senior Fed official – James Bullard, president of the Federal Reserve Bank of St. Louis – said the inflation crisis had become so acute that he now supported a full 1% increase in rates in the first half of 20221.
Bullard’s comments came too late in the day to affect markets in the rest of the world, although the US inflation data did have an impact on indices in Europe.

The UK & Europe

In the UK, the FTSE 100 closed on Thursday 2.1% up for the week, having hit its highest level since the pandemic began a day earlier. Strong earnings from energy company BP – underpinned by surging oil prices – helped to drive the FTSE higher on Tuesday, while comments from the Bank of England’s chief economist helped calm investors’ nerves about any sudden withdrawal of stimulus measures.
In Frankfurt, the DAX index ended Thursday’s session up 2.6% for the week, while France’s CAC 40 gained 2.2%. These gains came despite the fact that the European Central Bank is now widely expected to raise interest rates at least once in 2022, while France’s national statistical body downgraded the country’s economic growth forecasts.
Investors did however welcome the European Union’s plan to invest an extra €15 billion in a new “Chips Act”2, designed to increase member states’ capacity for semiconductor development production. The ongoing semiconductor shortage, and the EU’s dependence on producers in the Far East, has put significant constraints on manufacturing growth – in Germany in particular – over the past 12 months.

Asia

In Asia, the Hang Seng index in Hong Kong had risen 1.4% by Thursday’s close, with technology stocks such as Alibaba and Tencent helping to drive the sector higher. Japan’s Nikkei 225 index of leading shares, meanwhile, closed 0.9% ahead on Thursday, consolidating the gains it has made since the end of January on the back of strong corporate earnings.
February 4
February 10
Change (%)
FTSE 100
7516.4
7672.4
2.1
FTSE All-share
4208.6
4297.0
2.1
S&P 500
4500.5
4504.1
0.1
Dow Jones
35089.7
35241.6
0.4
DAX
15099.6
15490.4
2.6
CAC 40
6951.4
7101.6
2.2
ACWI
718.8
726.3
1.1
Hong Kong Hang Seng
24573.3
24924.4
1.4
Nikkei 225
27440.0
27696.1
0.9
Note: all market data contained within the article is sourced from Bloomberg unless stated otherwise, as at 10 February 2022.
11 February 2022
Mark King
Mark King
Head of Investment Content
Share article
Share on twitter
Share on linkedin
Share on email
Key topics
Related topics
Listen on stitcher badge
Share article
Share on twitter
Share on linkedin
Share on email
Key topics
Related topics

1 https://www.bloomberg.com/news/articles/2022-02-10/fed-s-bullard-backs-supersized-hike-seeks-full-point-by-july-1.
2 EU Chips Act: Europe’s plan to regain global leadership in semiconductors, ec.europa.eu, 8 Feb 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.

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 and relies on Class Order 03/1102 in marketing and providing financial services to Australian wholesale clients as defined in Section 761G of the Corporations Act 2001. 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.

Related Insights

18 August 2022

Joe Horrocks-Taylor

Senior Associate, Analyst, Responsible Investment

Jet zero – how investors can get on board for the long haul of aviation decarbonisation

Will COP15 address the biodiversity crisis? Our role as a responsible investor in addressing biodiversity loss.
Read time - 4 min
17 August 2022

Jamie Jenkins

Managing Director, Head of Global ESG Equities

Sacha El Khoury

Director, Portfolio Manager

Laura Wood

Senior Associate, Analyst, Global Equities

CT SDG Engagement Global Equity Strategy - Impact Report 2022

Our 3rd annual impact report details how our CT #SDG Engagement Global Equity Strategy aligns with the SDG framework.
Read time - 3 min
16 August 2022

Jim Griffin

Investment Content Manager

Market Monitor – 12 August 2022

The possibility that inflation may have peaked in the world’s largest economy provided a major boost to global stock markets this week.
Read time - 2 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.

Our Capabilities

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.

Looking for help?

Adviser Edge

Access professional support focusing on financial planning, investment and practice management. Create an account to access structured CPD content and log your CPD hours.