Market Monitor - 24 September 2021
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Market Monitor – 24 September 2021

In a rollercoaster week, global stock markets have managed to claw back sharp losses as fears of a major debt crisis in China eased. The latest instalment of the saga involving the Evergrande property empire sent markets into a tailspin on Monday: concerns that the company was about to default on a multi-million-dollar bond repayment sent share prices crashing all over the world with investors in Europe and the United States worried about the potential for contagion.

Indices on both sides of the Atlantic suffered their worst day in several months, while bourses in the Far East fared even more negatively. Fears over the Evergrande situation played into ongoing concerns about the overvaluation of stocks in general – indeed, recent investment manager surveys have suggested that many analysts expect a major correction at some point this year, while September is traditionally seen as a particularly weak month for markets.

At the same time, there are worries that central banks, especially the Federal Reserve in the US, are about to start unwinding stimulus measures, removing a significant level of support from both the real economy and financial markets.

Monday’s slump turned out to be a false dawn for the bears, however: markets rallied on Tuesday as it became clear that any Evergrande default was likely to be contained within China – and would not lead to the sort of domino effect seen during the financial crisis. To calm nerves further, the property giant agreed a new repayment deal with bondholders on Wednesday, apparently heading off any immediate danger.

The US

On Wall Street, the Dow Jones Industrial Average ended trading on Thursday 0.5% up for the week so far, with the S&P 500 0.4% ahead. Wednesday’s Fed announcement that it expects to have both begun and ended its tapering programme by mid-2022 did little to dent the post-Evergrande rebound, with investors having now largely come to terms with the idea that stimulus measures will start to be withdrawn before the end of this year.

The UK & Europe

In the UK, the FTSE 100 closed on Thursday 1.6% up for the week, having endured its worst day since July on Monday. Shares in travel companies fared especially well following the US government’s decision to reopen the country to international visitors and an overhaul of the UK’s quarantine system for overseas arrivals.
Further gains in London were limited by news on Thursday that the Bank of England expects inflation to remain above target levels for much of the rest of the year – making a hike in interest rates more likely. Britain is currently suffering from a sharp rise in energy prices in addition to its ongoing supply chain problems, with retailers warning that shortages of a wide range of products are likely as we move into autumn.
In Frankfurt, the DAX index ended Thursday’s session up 1% for the week, while France’s CAC 40 gained 2%. Stocks across the eurozone made a strong recovery from the week’s early losses.

Asia

In Asia, the Hang Seng index in Hong Kong finished 1.6% down – which marked a significant recovery having slumped to almost 9% below its September high at the end of trading on Monday. Japan’s Nikkei 225 index of leading shares, meanwhile, closed 2.8% lower, giving up some of the strong gains made earlier in the month.

 

September 17
September 23
Change (%)
FTSE 100
6963.6
7078.4
1.6
FTSE All-share
4023.3
4081.3
1.4
S&P 500
4433.0
4449.0
0.4
Dow Jones
34584.9
34764.8
0.5
DAX
15490.2
15644.0
1.0
CAC 40
6570.2
6702.0
2.0
ACWI
730.0
731.6
0.2
Hong Kong Hang Seng
24920.8
24511.0
-1.6
Nikkei 225
30500.1
29639.4
-2.8
Note: all market data contained within the article is sourced from Bloomberg unless stated otherwise, data as at 16/9/2021.
24 September 2021
Mark King
Head of Investment Content
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Market Monitor – 24 September 2021

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.

 

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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 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.

 

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