Market Monitor – 31 May 2024
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Market Monitor – 31 May 2024

Global stock markets continued to struggle this week as investors’ hopes of an interest rate cut in the United States faded further.

Downbeat comments from senior members of the Federal Reserve mean that bond traders are now not pricing in an initial cut until November. This is a stark turnaround from the consensus view at the start of 2024, when multiple rate reductions were expected throughout this year.

Share prices were also hit by disappointing corporate earnings statements, particularly within the technology sector, while the price of oil and other commodities weakened due to signs of lacklustre economic growth.

United States

On Wall Street, the Dow Jones Industrial Average ended trading on Thursday 2.5% down for the week so far, with the S&P 500 falling 1.3%. Comments from senior Fed policymakers on Tuesday indicated that the central bank could delay its expected loosening of monetary policy. They also suggested that the possibility of further increases in interest rates had not been ruled out. Quarterly results published late on Wednesday by a major business software company sparked further losses due to signs that the firm’s adoption of artificial intelligence had not yet translated into higher revenues.

UK

In the UK, the FTSE 100 closed on Thursday 1% down for the week so far after falling oil and metals prices weighed on the index. Crude prices had started the week strongly on expectations of an imminent production cut among OPEC (Organization of the Petroleum Exporting Countries) members, but fell back on data that showed weaker economic performance in the US. Despite the collapse of a high-profile takeover bid in the mining sector, there was further deal activity in the UK market. Retail sales showed signs of a recovery in May, but businesses in the sector said they planned to reduce investment due to the challenging economic environment.

Europe

In Frankfurt, the DAX index ended Thursday’s session down 1% for the week, while France’s CAC 40 fell 1.4%. While the European Central Bank is widely expected to cut rates at its policy meeting next week, investors remain unsure about the subsequent direction of travel. A rise in the rate of inflation in Germany could give the ECB reason to delay further reductions, and with unemployment in the eurozone reaching a record low this week, policymakers may decide that additional stimulus is not yet necessary.

Asia

In Asia, the Hang Seng index in Hong Kong fell 2%, with share prices declining on signs of higher-for-longer interest rates in the US, as well as further concerns about China’s real estate sector. Two more cities announced plans to relax restrictions on property sales this week, but investors remain unconvinced that the policy will significantly improve the fortunes of the country’s beleaguered housing developers. Japan’s Nikkei 225 index of leading shares declined 1.5% as rising yields on government bonds led to losses. Investors increasingly expect the Bank of Japan to tighten monetary policy further in the weeks ahead. Meanwhile, recent data showed that consumer confidence had slipped back this month.

May 24
May 30
Change (%)
FTSE 100
8317.6
8231.1
-1.0
FTSE 250
20770.9
20670.9
-0.5
S&P 500
5304.7
5235.5
-1.3
Dow Jones
39069.6
38111.5
-2.5
DAX
18693.4
18514.1
-1.0
CAC 40
8095.0
7978.5
-1.4
ACWI
791.6
781.1
-1.3
Hong Kong Hang Seng
18608.9
18230.2
-2.0
Nikkei 225
38646.1
38054.1
-1.5

Note: all market data contained within the article is sourced from Bloomberg unless stated otherwise, data as at 30 May 2024.

31 May 2024
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Market Monitor – 31 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.

 

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

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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