Market Monitor – 3 November 2023
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Market Monitor – 3 November 2023

Signs that interest rates in the US and Europe have reached a definitive peak sent global stock markets surging this week following a grim October

The clearest indications yet that the Federal Reserve expects its next rate move to be downwards, despite continued resilience in the American economy, was welcomed by investors around the world. Recent falls in the price of oil have helped to reduce inflationary pressures, giving central banks more breathing space as they try to balance their efforts to contain rising costs against the potential economic damage that tighter monetary policy can create.

There remain some clouds on the horizon. However, the World Bank warned earlier in the week that the conflict in Gaza could drive oil prices up by more than 50% if it spreads across the region. Meanwhile, the ongoing crisis in China’s real-estate sector shows little sign of abating.

United States

On Wall Street, the Dow Jones Industrial Average ended trading on Thursday 4.4% up for the week so far, with the S&P 500 likewise surging 4.9%. While the Fed’s decision on Wednesday, to extend the recent pause in its programme of interest rate hikes, was not a surprise, investors were particularly pleased to hear comments from Fed chair Jerome Powell that strongly suggested there would be no further tightening of monetary policy. After recent gloom, markets reacted with glee, putting US stocks on track for their best week of 2023 so far.

UK

In the UK, the FTSE 100 closed on Thursday 2.1% up for the week so far, with falling oil prices limiting gains in London in comparison to markets in Europe and the US. The Bank of England followed the Fed’s lead and left rates unchanged on Thursday, although officials’ predictions for the British economy were decidedly mixed. While inflation is now expected to dip below 5% by the end of this year, the rate is expected to remain above the Bank’s 2% target until 2025. Meanwhile, growth is on course to stagnate this year and next, with unemployment set to become an increasingly serious problem.

Europe

In Frankfurt, the DAX index ended Thursday’s session up 3.1% for the week, while France’s CAC 40 gained 3.9%. Weakness in the eurozone economy – it shrank in the third quarter – allied with further falls in inflation means the European Central Bank is also now expected to stop raising interest rates, having pressed the pause button at the end of October. Recent data showing a decline in output among European manufacturers, however, highlighted the impact that high rates and falling confidence are having on private sector activity.

Asia

In Asia, the Hang Seng index in Hong Kong dipped 1.0% as concerns about the health of one of China’s largest property developers persisted. Latest Chinese manufacturing data came in weaker than expected, adding to worries about the strength of the country’s post-pandemic recovery. Japan’s Nikkei 225 index of leading shares advanced 3.1%, meanwhile, buoyed by the Fed’s pause as well as the Tokyo government’s announcement of a $113 billion stimulus plan to help households and businesses cope with recent rises in inflation.

27 October
2 November
Change (%)
FTSE 100
7291.3
7446.5
2.1
FTSE 250
16866.2
17735.5
5.2
S&P 500
4117.4
4317.8
4.9
Dow Jones
32417.6
33839.1
4.4
DAX
14687.4
15143.6
3.1
CAC 40
6795.4
7060.7
3.9
ACWI
629.5
655.1
4.1
Hong Kong Hang Seng
17398.7
17230.6
-1.0
Nikkei 225
30991.7
31949.9
3.1

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

3 November 2023
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Market Monitor – 3 November 2023

Important information

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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Important information

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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