Market Monitor – 17 May 2024
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Market Monitor – 17 May 2024

Global stock markets extended their May gains this week, with a welcome slowdown in inflation in the United States laying the groundwork for interest rate cuts.

Investor sentiment has also been supported by positive corporate earnings statements. Any signs that the US and global economies may be able to achieve a soft landing – where inflation is brought under control without driving unemployment significantly higher or seriously damaging private sector performance – have been seized upon by markets in recent months and have underpinned this year’s equities rallies. However, as we saw in April, optimism can quickly fade if inflation does not fall as quickly as expected.

United States

On Wall Street, the Dow Jones Industrial Average ended trading on Thursday 0.9% up for the week so far, with the S&P 500 gaining 1.4%. The Dow broke through the 40,000 point barrier for the first time on Thursday in the wake of Wednesday’s fall in the Consumer Price Index. Share prices in the US were also bolstered by slightly weaker economic data, with retail sales and industrial production both flatlining in April. As a result, the market is now expecting the Federal Reserve to make its first interest rate cut in September rather than at the end of the year.

UK

In the UK, the FTSE 100 closed on Thursday 0.1% up for the week as the index consolidated its recent strong gains and reached another all-time high. The Bank of England remains on course to cut the base rate over summer, according to comments from its chief economist, as unemployment in Britain continues to rise. Private sector output reportedly increased in April as the UK economy recovered from last year’s short-lived recession, although latest figures showed a 20% fall in housebuilding in the first three months of the year.

Europe

In Frankfurt, the DAX index ended Thursday’s session down 0.2% for the week, while France’s CAC 40 fell 0.4%, with both indexes giving up some of the impressive gains made at the start of the month. The European Central Bank is also on the verge of cutting rates, with a report from the European Union forecasting further falls in eurozone inflation in 2024. However, the ECB’s latest Financial Stability Review warned of the potential geopolitical impact of the large number of national elections taking place this year. The review also highlighted the risks posed by ongoing weakness in Europe’s commercial property sector.

Asia

In Asia, the Hang Seng index in Hong Kong gained 2.2% as its recent rally continued. Concerns about the stability of the Chinese real estate sector have eased in recent weeks, while investors remain hopeful the government will inject further stimulus into the country’s economy. However, latest figures showed a fall in bank lending, while recent restrictions on trade with the US could hamper China’s recent economic recovery. Japan’s Nikkei 225 index of leading shares, meanwhile, advanced 1.8% following the fall in the US inflation rate, with technology stocks leading the gains and the yen making up some lost ground against the dollar. Inflation in Japan, however, rose to an annual rate of 2.6% in March while the economy slowed more quickly than expected in the first three months of 2024.

May 10
May 16
Change (%)
FTSE 100
8433.8
8438.7
0.1
FTSE 250
20645.4
20822.8
0.9
S&P 500
5222.7
5297.1
1.4
Dow Jones
39512.8
39869.4
0.9
DAX
18772.9
18738.8
-0.2
CAC 40
8219.1
8188.5
-0.4
ACWI
782.1
794.1
1.5
Hong Kong Hang Seng
18963.7
19376.5
2.2
Nikkei 225
38229.1
38920.3
1.8

Note: all market data contained within the article is sourced from Bloomberg unless stated otherwise, data as at 16 May 2024.

17 May 2024
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Market Monitor – 17 May 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 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 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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