Market Monitor – 16 February 2024
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Market Monitor – 16 February 2024

Global stock markets edged ahead during a turbulent week marked by the publication of contrasting economic data.

While steady declines in inflation rates in recent months have raised hopes that central banks will soon start cutting interest rates, the news on Tuesday that the consumer price index (CPI) in the United States had fallen more slowly than expected in January led to sharp share-price losses around the world. On Thursday, however, it was a different story as markets welcomed figures that highlighted weakness in US consumer spending, with sales across the retail and hospitality industries coming in below consensus forecasts. While this is undoubtedly a negative development for businesses in those sectors, the news was expected to put pressure on the Fed to loosen monetary policy sooner rather than later.

Elsewhere, new data showed slowing growth in Europe and Japan, while uncertainty over tensions in the Middle East led to renewed volatility in oil and commodity prices.

United States

On Wall Street, the Dow Jones Industrial Average ended trading on Thursday 0.3% up for the week so far, with the S&P 500 gaining 0.1% to consolidate its breaking of the 5,000-point barrier last week. Gains during Thursday’s session offset losses earlier in the week after Tuesday’s disappointing 3.1% inflation figure, but there are still signs the American jobs market remains in robust health – potentially adding to upward price pressures over the coming months. Investors welcomed comments from a senior Fed official who said rate cuts should be considered even while inflation remained above the 2% target.

UK

In the UK, the FTSE 100 closed on Thursday 0.3% up for the week so far after data showed inflation in Britain had remained at 4% in January, rather than rising to 4.2% as economists had expected. The news led to weakness in the pound, to the benefit of the many multinationals listed in London, and increased hopes of imminent interest rate reductions. However, figures showing that wage increases were running above inflation took some of the shine off the CPI news, with Bank of England governor Andrew Bailey telling lawmakers it would be difficult to cut rates while earnings are rising so strongly. Investors were largely indifferent to the news on Thursday that UK GDP had contracted in the final three months of 2023, putting the British economy into a technical recession.

Europe

In Frankfurt, the DAX index ended Thursday’s session up 0.7% for the week, while France’s CAC 40 gained 1.3%. Investors continue to bet on the European Central Bank cutting interest rates soon in response to economic weakness across the eurozone: GDP across the bloc was unchanged in the final quarter of last year, while the German economy shrank by 0.3%. Analysts now expect German GDP to fall by 0.5% this year. Elsewhere, there were strong gains in the pharmaceutical sector but a profit warning was issued from one of Europe’s largest brewers in response to sharp rises in costs.

Asia

In Asia, the Hang Seng index in Hong Kong gained 1.3% in a week that was shortened by the extended new year holiday. However, shares recorded gains on Wednesday and Thursday, following positive consumer spending data and upbeat outlooks among technology businesses. Japan’s Nikkei 225 index of leading shares, meanwhile, advanced 3.4% and reached another record high despite reports that indicated the Japanese economy had fallen into recession at the end of 2023.

February 9
February 15
Change (%)
FTSE 100
7572.6
7597.5
0.3
FTSE 250
19062.3
19099.6
0.2
S&P 500
5026.6
5029.7
0.1
Dow Jones
38671.7
38773.1
0.3
DAX
16926.5
17046.7
0.7
CAC 40
7647.5
7743.4
1.3
ACWI
747.9
750.3
0.3
Hong Kong Hang Seng
15746.6
15944.6
1.3
Nikkei 225
36897.4
38157.9
3.4

Note: all market data contained within the article is sourced from Bloomberg unless stated otherwise, data as at 15 February 2024.

 

16 February 2024
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Market Monitor – 16 February 2024

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.

 

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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

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 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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