Market Monitor - 9 December 2021
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Market Monitor – 9 December 2021

Concerns about the threat posed to the global economy by a rapidly-spreading new coronavirus variant (Omicron) have been put in the rear-view mirror this week, with stock markets around the world posting strong gains.
The Omicron-inspired losses seen in the past fortnight have been almost completely reversed, despite the fact that many governments have tightened their Covid-19 restrictions. Investors have instead chosen to focus on preliminary data from South Africa – where the variant was first identified – which suggest Omicron could cause less serious illness than its predecessors Alpha and Delta. Meanwhile, pharma firms indicated that vaccines and other therapies were likely to be at least partially effective against the recently discovered strain.

The US

There were further reasons for cheer in the markets, with the news that lawmakers in the United States were set to approve an increase in the government debt ceiling, while investors appear to have come to terms with the fact that central banks on both sides of the Atlantic will soon begin to phase out stimulus measures.
Meanwhile, investment bank JP Morgan published a 20221 forecast suggesting that the global economy will stage a full recovery from the pandemic next year, with pent-up demand driving a worldwide return to growth.
On Wall Street, the Dow Jones Industrial Average ended trading on Thursday 3.4% up for the week so far, with the S&P 500 2.8% ahead. Indications that the Biden administration is reluctant to impose new restrictions in response to Omicron have been welcomed by investors, and means that the economic impact of the new variant could be relatively mild.

The UK & Europe

In the UK, the FTSE 100 closed on Thursday 2.8% up for the week, despite the fact that Boris Johnson’s government has felt it necessary to tighten up Covid rules. Employees are now being encouraged to work from home and mask-wearing is mandatory in shops and entertainment venues across much of the UK – but these changes are thought unlikely to have a significant impact on economic activity. Travel and hospitality stocks, however, have had a particularly volatile week, with new rules on international arrivals and widespread cancellation of Christmas parties chiefly to blame.
Uncertainty over Omicron has led analysts to expect the Bank of England to maintain interest rates at their current level – rather than increase them – when its Monetary Policy Committee meets next week.
In Frankfurt, the DAX index ended Thursday’s session up 3.1% for the week, while France’s CAC 40 gained 3.6%. As well as the general bullishness around the apparently receding Omicron threat, strong production figures in Germany – despite ongoing supply-chain problems – cheered investors.

Asia

In Asia, the Hang Seng index in Hong Kong rose 2.1% despite continuing problems in China’s property sector. Shares in real estate developer Kaisa were suspended on Wednesday after the company threatened to miss a debt repayment, while ratings agency Fitch downgraded its view on Evergrande, placing its overseas bonds in technical default. The Chinese government, meanwhile, took steps to head off a debt crisis by lowering the amount of capital the country’s banks are required to hold in reserve.
Japan’s Nikkei 225 index of leading shares leapt 2.5% thanks to easing fears over the new variant. But newly released figures showed the hard-hit Japanese economy shrank more rapidly than initially reported between July and September.
December 3
December 9
Change (%)
FTSE 100
7122.3
7321.3
2.8
FTSE All-share
4059.3
4167.4
2.7
S&P 500
4538.4
4667.5
2.8
Dow Jones
34580.1
35754.7
3.4
DAX
15170.0
15639.3
3.1
CAC 40
6765.5
7008.2
3.6
ACWI
724.2
743.6
2.7
Hong Kong Hang Seng
23766.7
24254.9
2.1
Nikkei 225
28029.6
28725.5
2.5

Note: all market data contained within the article is sourced from Bloomberg unless stated otherwise, data as at 9/12/2021.

10 December 2021
Mark King
Head of Investment Content
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Market Monitor – 9 December 2021

1 Outlook 2022: Preparing for a vibrant cycle, JP Morgan, 8 Dec 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.

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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.

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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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