Market Monitor – 27 January 2023
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Market Monitor – 27 January 2023

Stock markets around the world have enjoyed a positive week thanks to improved economic data and solid company earnings reports.

The news that the US economy had grown by an annual rate of almost 3% in the final three months of 2022 was welcomed as an indication that growth may not slow as much as previously feared this year. In recent months, investors have at times reacted negatively to similar signs of economic strength – largely due to worries that central banks may respond by raising interest rates more quickly to prevent overheating. This week, however, markets have apparently decided to take the upbeat GDP figure at face value. Whether this optimism can survive another rate hike from the Federal Reserve when it meets next week remains to be seen.

US markets

On Wall Street, the Dow Jones Industrial Average ended trading on Thursday 26 January 1.7% up for the week so far, with the S&P 500 advancing 2.2%. Last quarter’s economic growth was based on resilience in the jobs market and a decline in the inflation rate, both of which underpinned higher levels of household spending. Earnings season has been largely positive to date, with around two-thirds of the S&P-listed companies to have reported so far beating analysts’ estimates. However, there have been some potentially worrying signs among larger technology businesses that the outlook may be getting gloomier.

Europe

In the UK, the FTSE 100 closed on Thursday 0.1% down for the week to give up some of the strong gains it has made so far this month. With inflation in Britain running at a consistently higher level than in the US, company trading reports have on the whole been more downbeat. Latest figures showed that business activity in the UK fell at its sharpest rate in two years in January, with high prices and widespread industrial action combining to restrict output. Meanwhile, UK government borrowing in December reached a record high thanks to rising interest costs and the energy subsidy programme.

In Frankfurt, the DAX index ended Thursday’s session up 0.7% for the week, while France’s CAC 40 gained 1.4%. Data suggested that eurozone output had risen slightly over the month so far, while major companies in the technology and financial sectors published impressive trading statements. Investors now await February’s monetary policy decision from the European Central Bank.

Asia

In Asia, the Hang Seng index in Hong Kong made up for lost time on Thursday after its new year holiday closure, rising 2.4% in the wake of gains on global markets. Exchanges in mainland China will resume business next week. Japan’s Nikkei 225 index of leading shares, meanwhile, continued its recent surge to close trading on Thursday 3% higher for the week. Investors have been relieved by the Bank of Japan’s continuation of its relaxed approach to monetary policy, while the market has also been boosted by solid earnings reports from motor manufacturers.

20 January
26 January
Change (%)
FTSE 100
7770.6
7761.1
-0.1
FTSE All-Share
4250.1
4253.4
0.1
S&P 500
3972.6
4060.4
2.2
Dow Jones
33375.5
33949.4
1.7
DAX
15033.6
15132.9
0.7
CAC 40
6996.0
7096.0
1.4
ACWI
636.4
649.0
2.0
Hong Kong Hang Seng
22044.7
22566.78
2.4
Nikkei 225
26553.5
27362.8
3.0

Note: all market data contained within the article is sourced from Bloomberg unless stated otherwise, data as at 26 January 2023.

27 January 2023
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Market Monitor – 27 January 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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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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