Market Monitor – 28 July 2023
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Market Monitor – 28 July 2023

Global stock markets have had a positive week despite further rises in interest rates within Europe and the United States.

Both the European Central Bank and Federal Reserve increased rates by 25 basis points, as investors had expected, and share prices rose on hopes that these hikes could mark the end of the current period of monetary tightening in the eurozone and America respectively. However, further strong economic data from the US on Thursday as well as fears of possible rate rises in Asia dampened sentiment towards the end of the week.

United States

On Wall Street, the Dow Jones Industrial Average ended trading on Thursday 0.2% up for the week so far, with the S&P 500 advancing by just a solitary point. With the Fed’s rate hike already priced in, investors were more interested in the latest company earnings statements, which continued to demonstrate significant levels of corporate resilience. Official data for the second quarter of 2023, meanwhile, showed that the American economy grew at an annualised rate of 2.4%, with growth underpinned by relatively buoyant consumer spending. While this news indicates that higher interest rates have not yet had a damaging effect, investors fear it raises the possibility of further Fed action in September.

UK

In the UK, the FTSE 100 closed on Thursday 0.4% up for the week so far as the index continued its recovery from its slump at the start of the month. Earnings statements painted a mixed picture for London-listed businesses, with strength in aerospace and power companies offset by falling profits in the financial sector. The departure of the CEO of one of the country’s biggest banks following a political row did little to improve sentiment, while new data suggested private-sector growth had slowed to a six-month low. However, recent forecasts from the International Monetary Fund (IMF) suggested the UK economy would expand more rapidly than previously thought in 2023.

Europe

In Frankfurt, the DAX index ended Thursday’s session up 1.4% for the week, while France’s CAC 40 gained 0.4%. European shares continued to benefit from optimism about China’s post-Covid recovery, with results from firms in the luxury-goods sector in particular beating expectations. Investors also welcomed comments from ECB president Christine Lagarde following the bank’s decision to raise interest rates again. While Lagarde did not rule out further hikes, she suggested that the ECB would be able to pause its monetary tightening programme given the right economic conditions.

Asia

In Asia, the Hang Seng index in Hong Kong rose 3% with Chinese markets welcoming concrete plans from the Beijing government to stimulate the economy. Gains were especially strong in the property and technology sectors, both of which have suffered heavy losses over recent months. Japan’s Nikkei 225 index of leading shares advanced 1.8% following gains in China and hopes of an end to rate rises in major Western markets. However, gains were limited later in the week by reports that the Bank of Japan could be considering a more hawkish approach towards monetary policy.
21 July
27 July
Change (%)
FTSE 100
7663.7
7692.8
0.4
FTSE 250
19200.5
19273.4
0.4
S&P 500
4536.3
4537.4
0.0
Dow Jones
35227.7
35282.7
0.2
DAX
16177.2
16406.0
1.4
CAC 40
7432.8
7465.2
0.4
ACWI
696.5
700.1
0.5
Hong Kong Hang Seng
19075.3
19639.1
3.0
Nikkei 225
32304.3
32891.2
1.8

Note: all market data contained within the article is sourced from Bloomberg unless stated otherwise, data as at 27 July 2023.

28 July 2023
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Market Monitor – 28 July 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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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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