Market Monitor – 23 February 2024
Insights

Market Monitor – 23 February 2024

Stock markets around the world enjoyed a buoyant week as investors focused on the potential for technological advances to drive growth, regardless of wider macroeconomic conditions

Worries about the timing of potential interest rate cuts have taken a back seat, as a highly impressive trading statement from one of America’s biggest manufacturers of the microchips used in multiple artificial intelligence (AI) applications drove gains in the US, Europe and Asia.

AI was one of the dominant investment themes in 2023, something that seems unlikely to change in the foreseeable future. With the prospect of central banks starting to unwind monetary policy in the first half of this year – a development that will increase the present value of future earnings streams – there seems to be little standing in the way of technology stocks at the moment.

The positive mood was helped by economic data in the US and Europe that was neither too strong nor too weak. While business activity is proving relatively resilient in the face of high borrowing costs and a lengthy period of above-target inflation, there are nonetheless a number of signs of frailty that may encourage policymakers to cut rates sooner rather than later.

United States

On Wall Street, the Dow Jones Industrial Average ended trading on Thursday 1.1% up for the week so far, with the S&P 500 gaining 1.6% to reach a record high. The tech-heavy Nasdaq index posted even more impressive returns after markets re-opened following the Presidents’ Day closure on Monday. Away from AI-related optimism, recent data showed a sharp decline in mortgage applications last month, with borrowing rates rising in response to the surprise uptick in December’s inflation figure. Minutes from the most recent meeting of the Federal Reserve indicate that policymakers continue to advise caution when deciding how soon to relax monetary policy, but signs that growth in the private sector is slowing could force their hand.

UK

In the UK, the FTSE 100 closed on Thursday 0.4% down for the week so far, with shares in London unable to participate in the global rally due to a shortage of major technology names. Subpar quarterly trading statements in the banking sector also weighed on the index, although the latest economic data suggested Britain’s services sector was continuing to show resilience. Meanwhile, disruption to global shipping routes appears only to be having a limited impact on the input costs faced by manufacturers.

Europe

In Frankfurt, the DAX index ended Thursday’s session up 1.5% for the week, while France’s CAC 40 gained 1.8%, with both reaching record highs on the back of ebullience in the technology sector. At the same time, weak economic data from the eurozone – France and Germany in particular – increases the likelihood of rate cuts by the European Central Bank in the first half of 2024. Officials in Germany expect the country to enter a technical recession, defined as two consecutive quarters of negative growth, while the ECB increasingly believes inflation is being brought under control.

Asia

In Asia, the Hang Seng index in Hong Kong gained 2.5% to stage a small recovery from its recent slump. Investors in China welcomed signs of improved tourism levels around the new year holiday, while officials cut key mortgage rates more sharply than expected. There are hopes the government will introduce additional stimulus measures in the weeks ahead. Japan’s Nikkei 225 index of leading shares, meanwhile, surged to an all-time high, gaining 1.6% and surpassing the previous peak recorded in 1989. The Tokyo market has been a major beneficiary of optimism around the global semiconductor industry and the potential of AI in general.

February 16
February 22
Change (%)
FTSE 100
7711.7
7684.5
-0.4
FTSE 250
19191.9
19263.5
0.4
S&P 500
5005.6
5087.0
1.6
Dow Jones
38628.0
39069.1
1.1
DAX
17117.4
17370.5
1.5
CAC 40
7768.2
7911.6
1.8
ACWI
750.2
760.4
1.4
Hong Kong Hang Seng
16340.0
16743.0
2.5
Nikkei 225
38487.2
39098.7
1.6

Note: all market data contained within the article is sourced from Bloomberg unless stated otherwise, data as at 22 February 2024.

23 February 2024
Share article
Share on linkedin
Share on email
Key topics
Related topics
Listen on Stitcher badge
Share article
Share on linkedin
Share on email
Key topics
Related topics

PDF

Market Monitor – 23 February 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.

Related insights

17 April 2024

In search of sustainability – following Highway 101

Travelling down the US west coast we met 25 companies in five days. Learn more about the tech and healthcare businesses shaping our future.
Read time - 3 min
12 April 2024

Market Monitor – 12 April 2024

Global stock markets have endured another challenging week as a result of signs that policymakers are struggling to keep inflation in check in the United States.
Read time - 3 min
5 April 2024

Market Monitor – 5 April 2024

Global stock markets had a difficult week following Easter, with conflicting economic data and further rises in commodity prices creating uncertainty for investors.
Read time - 3 min
17 April 2024

In search of sustainability – following Highway 101

Travelling down the US west coast we met 25 companies in five days. Learn more about the tech and healthcare businesses shaping our future.
Read time - 3 min
16 April 2024

In Credit Weekly Snapshot – April 2024

Our fixed income team provide their weekly snapshot of market events.
Read time - 5 min
15 April 2024

Steven Bell

Chief Economist, EMEA

Is interest rate pessimism overdone?

The European Central Bank looks set to cut in June and there are reasons to believe the US and UK won’t be too far behind.
Watch time - 6 min
true
true

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.

You may also like

Investment approach

Teamwork defines us and is fundamental to our investment approach, which is structured to facilitate the generation, assessment and implementation of good, strong investment ideas for our portfolios.

Funds and Prices

Columbia Threadneedle Investments has a comprehensive range of investment funds catering for a broad range of objectives.

Our Capabilities

We offer a broad range of actively managed investment strategies and solutions covering global, regional and domestic markets and asset classes.