Market Monitor – 3 March 2023
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Market Monitor – 3 March 2023

Global stock markets have enjoyed a largely positive week despite ongoing concerns about tightening monetary policy in the United States

The latest batch of mixed economic data in the US has, investors fear, provided the Federal Reserve with further justification to continue raising interest rates as it battles to bring inflation under control.

There was good news in the shape of stronger-than-expected industrial production data from China, although geopolitical concerns relating to Beijing’s support for Russia’s invasion of Ukraine – and the possibility of US sanctions as a result – also weighed on sentiment.

United States

On Wall Street, the Dow Jones Industrial Average ended trading on Thursday 0.6% up for the week so far, with the S&P 500 0.3% ahead. While rising interest rates and high input prices saw the US manufacturing sector contract for the fourth consecutive month in February, tighter monetary policy appears to have had much less of an impact on the US jobs market. The number of new unemployment claims fell again last week while labour costs rose at a faster pace than previously reported in the final three months of 2022. The prospect of higher wages adding to inflationary pressures could force the Fed to continue raising rates in the months ahead. However, share prices recovered some ground on Thursday after a senior Fed member said he favoured a “slow and steady” approach to future rate hikes.

UK

In the UK, the FTSE 100 closed on Thursday 0.8% up for the week so far, with prices buoyed by the news that prime minister Rishi Sunak had finalised an agreement with European Union leaders regarding the trade status of Northern Ireland. Investors hoped the deal would pave the way for a more pragmatic approach to post-Brexit regulations from the government. Bank of England officials added to the positive mood by suggesting that interest rates in Britain may be near their peak, while the Bank’s chief economist said the UK economy may be in a stronger position than previously thought. However, the housing market continued to decline in February while a rise in the rate of grocery-price inflation added to concerns.

Europe

In Frankfurt, the DAX index ended Thursday’s session up 0.8% for the week, while France’s CAC 40 rose by 1.3%. These gains came despite latest data showing inflation remains persistently high in Spain and France in particular. European stocks welcomed the news of growth among China’s manufacturers, and there were positive earnings reports from firms in the consumer staples sector which suggest spending levels could turn out to be relatively resilient in 2023.

Asia

In Asia, the Hang Seng index in Hong Kong gained 2.1%, starting the month with solid gains after data showed a resurgent Chinese manufacturing sector benefiting from the ending of Beijing’s zero-Covid policy at the end of 2022. The figures raised hopes that China’s economy could grow at a faster rate than expected this year. Japan’s Nikkei 225 index of leading shares advanced 0.2%, buoyed by China’s industrial production jump but held back by concerns around rising rates in the US and resultant weakness in technology stocks.

24 February
2 March
Change (%)
FTSE 100
7878.7
7944.0
0.8
FTSE 250
19696.5
19851.7
0.8
S&P 500
3970.0
3981.4
0.3
Dow Jones
32816.9
33003.6
0.6
DAX
15209.7
15327.6
0.8
CAC 40
7187.3
7284.2
1.3
ACWI
628.0
631.2
0.5
Hong Kong Hang Seng
20010.0
20429.46
2.1
Nikkei 225
27453.5
27498.9
0.2

Note: all market data contained within the article is sourced from Bloomberg unless stated otherwise, data as at 2 March 2023.

3 March 2023
Jim Griffin
Investment Content Manager
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Market Monitor – 3 March 2023

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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