Market Monitor – 20 September 2024

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Market Monitor – 20 September 2024

Jim Griffin
Jim Griffin
Investment Content Manager

Global stock markets made solid gains this week, with investors reacting positively to the sharp cut in interest rates in the United States.

The Federal Reserve decided on Wednesday to reduce borrowing costs by 0.5% rather than the 0.25% many analysts had expected – a move which could have been seen as an admission that officials had waited too long to relax monetary policy. However, Fed chair, Jerome Powell, was able to calm nerves with comments indicating the US economy was on track to achieve the “soft landing” that markets have long hoped for. Elsewhere, oil and commodity prices rallied towards the back of the week following an escalation of the conflict in the Middle East, as well as disruption to the supply of crude caused by recent extreme weather in the Gulf of Mexico.

United States

On Wall Street, the Dow Jones Industrial Average ended trading on Thursday 1.5% up for the week so far, with the S&P 500 gaining 1.6%. Both indexes have recorded all-time highs this week thanks to the cut in interest rates and further signs of economic resilience in the US. Data published on Tuesday showed a rise in industrial output in August, as well as stronger retail sales than expected. Powell rejected claims that the cut had been politically motivated to provide Democrats with a pre-election boost, but he added that the path of any future rate reductions would likely be more measured.

UK

In the UK, the FTSE 100 closed on Thursday 0.7% up for the week so far after the Bank of England chose to leave interest rates unchanged. Combined with the large rate cut in the US, this led to gains for sterling against the dollar and caused major UK stocks to underperform against their international counterparts. Inflation in August remained at 2.2%, and policymakers are widely expected to make their next rate reduction in November. A report highlighted the damaging impact Brexit has had on trade between Britain and the European Union, while the OECD warned that the government should take decisive action to address the state of the UK’s public finances in next month’s budget.

Europe

In Frankfurt, the DAX index ended Thursday’s session up 1.6% for the week, while France’s CAC 40 gained 2% as markets in Europe welcomed the Fed’s decisive action and signs of robust health in the US economy. Closer to home, there was a further decline in investor confidence in Germany, while the head of the Bundesbank warned that eurozone inflation remained uncomfortably high. Carmakers reported a slump in sales of new electric vehicles across Europe and questioned whether they would be able to meet the EU’s decarbonisation targets.

Asia

Following a difficult start to the week, Asian markets also reacted positively to the relaxation of monetary policy in the US. The Hang Seng index in Hong Kong gained 3.7% as investors pinned their hopes on fresh stimulus measures from the Chinese government following disappointing economic data issued last weekend. Japan’s Nikkei 225 index of leading shares, meanwhile, advanced 1.6%, with share prices recovering on Thursday after earlier falls were sparked by a call from Bank of Japan officials for further interest rate rises.

September 13
September 19
Change (%)
FTSE 100
8273.1
8328.7
0.7
FTSE 250
20895.4
21162.7
1.3
S&P 500
5626.0
5713.6
1.6
Dow Jones
41393.8
42025.2
1.5
DAX
18699.4
19000.3
1.6
CAC 40
7465.3
7615.4
2.0
ACWI
826.9
839.5
1.5
Hong Kong Hang Seng
17369.1
18013.2
3.7
Nikkei 225
36581.8
37155.3
1.6

Note: all market data contained within the article is sourced from Bloomberg unless stated otherwise, data as at 19 September 2024.

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Market Monitor – 20 September 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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