Market Monitor - 11 June 2021

Market Monitor – 11 June 2021

Stock markets around the world have made little upward progress this week despite the ongoing economic recovery from the Covid-19 pandemic. But the main story over the past few days has been investors’ willingness to shrug off the news that inflation is rising faster than expected in Europe, the United States and Asia.

Over recent months, the threat of inflation has been seen as the main obstacle to stock market growth. Higher prices as the post-pandemic economic recovery takes hold are thought likely to lead to a quicker withdrawal of central bank stimulus measures – known as quantitative easing – and higher interest rates, both of which typically depress share prices.

But on Thursday, when the US reported consumer price index (CPI) inflation running at 5% – well above most analysts’ forecasts and the highest rate since the financial crisis – markets were largely unmoved. This is in no small part down to the Federal Reserve and other major central banks’ success in managing expectations around inflation and tighter monetary policy.

The Fed has been at pains to point out that rising inflation is part and parcel of the recovery, particularly when the rapid slump in prices in the early stages of the pandemic last spring is taken into account. Importantly, central banks see a spike in inflation as inevitable but very probably short-lived – which means that there will be no immediate need to hike interest rates or turn off the stimulus taps. For the time being at least, investors seem content to accept this view.

Other economic indicators were mixed this week: on Monday, China reported a slowdown in its export performance following Covid-19 outbreaks at two major ports, while the global shortage in materials and components – most notably, semiconductors – continues to weigh on industrial output. In Germany, industrial orders fell in April, surprising analysts who had forecast modest growth.

The US

On Wall Street, the Dow Jones Industrial Average ended trading on Thursday 0.8% down for the week so far, with the S&P 500 edging 0.2% ahead. America’s tech giants appear relaxed about the potential for higher tax bills after a new global tax deal was agreed by G7 ministers. Meanwhile, employment figures in the US continued their recent upward trajectory.

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.

The number of UK workers using the government’s furlough scheme has fallen to a new low this week, while there are also signs that consumer spending is picking up. Meanwhile there were gains in travel stocks as the EU and US announced plans to ease international travel this summer.

In Frankfurt, the DAX index ended Thursday’s session down 0.8% for the week, while France’s CAC 40 gained 0.5%. The ongoing semiconductor shortage has hit German motor manufacturers, with both Volkswagen and BMW recording falls this week.

June 4
June 10
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 10/6/2021.

11 June 2021
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 – 11 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

6 May 2022

Mark King

Head of Investment Content

Market Monitor - 6 May 2022

Rising interest rates and the threat of a new global recession have caused renewed turbulence on stock markets around the world this week, with high levels of uncertainty and anxiety among investors leading to major swings.
Read time - 2 min
8 April 2022

Mark King

Head of Investment Content

Market Monitor - 8 April 2022

The threat of tighter monetary policy and the expectation of further negative economic impacts from the war in Ukraine have driven global share prices lower this week.
Read time - 2 min
25 March 2022

Mark King

Head of Investment Content

Market Monitor - 25 March 2022

Global stock markets have enjoyed a more or less positive week as investors have once again been happy to focus on whatever good news they can find.
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.

Find your fund

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

Types of investment

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