Market Monitor – 8 April 2022

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Market Monitor – 8 April 2022

The threat of tighter monetary policy and the expectation of further negative economic impacts from the war in Ukraine have driven global share prices lower this week.
Stock markets all over the world incurred heavy losses on Tuesday and Wednesday after central bankers in the United States suggested they may withdraw the stimulus measures introduced at the start of the Covid-19 pandemic more rapidly than previously suggested, while also raising interest rates at a faster pace.
Like their counterparts in Europe, the Federal Reserve has concluded that urgent action is likely to be needed to address soaring inflation and rising wage costs. The repercussions of the Ukrainian crisis, added to the prospect of strict lockdowns in China as the country battles with a number of severe Omicron outbreaks, mean that consumers and businesses around the globe can expect prices to continue their upward path for much of the year, creating a major dilemma for the likes of the Fed, the European Central Bank and the Bank of England. By scaling back asset purchases and raising interest rates, policymakers may be able to bring prices under control – but at the same time, such moves could severely threaten economic growth.

The US

On Wall Street, the Dow Jones Industrial Average ended trading on Thursday 0.7% down for the week so far, with the S&P 500 losing 1%. Technology stocks in the US were hit particularly hard by concerns about monetary policy, with the tech-heavy Nasdaq index losing more than 2% in Tuesday’s session alone. New data, meanwhile, showed that American factory orders fell for the first time in nearly a year in February1 – a sign, perhaps, that the US economy could be slowing down.

The UK & Europe

In the UK, the FTSE 100 closed on Thursday 0.2% up for the week, with shares in London once again propped up by strength in the oil price as well as buoyant commodities values. Energy giant Shell said that exiting its Russian operations could cost it as much as £3.8 billion2 – but the firm noted that the high price of oil would be likely to offset a significant chunk of those losses.
European markets once again endured a very challenging week. In Frankfurt, the DAX index ended Thursday’s session down 2.5%, while France’s CAC 40 lost 3.3%.
With increasing evidence of Vladimir Putin’s forces committing war crimes in Ukraine emerging, the European Union is facing growing pressure to block the import of coal and other energy sources from Russia – a move that will have a severe economic impact on the EU. The bank BNP Paribas warned on Wednesday that the eurozone was at risk of entering a recession in 2022, especially if policymakers in Brussels decide to impose a total embargo on Russian oil and gas.

Asia

In Asia, the Hang Seng index in Hong Kong lost 1%, with fears growing about Beijing’s ability to contain the Omicron wave across the country. On Tuesday, the lockdown in Shanghai was extended to cover the whole city – an estimated 25 million people – and questions are now being asked about whether China can continue to pursue its “zero-Covid” strategy.
Japan’s Nikkei 225 index of leading shares lost 2.8%, with technology investors in particular nervous about the prospect of rapid monetary policy tightening in the US.
April 1
April 7
Change (%)
FTSE 100
7537.9
7551.8
0.2
FTSE All-share
4199.5
4199.5
0.0
S&P 500
4545.9
4500.2
-1.0
Dow Jones
34818.3
34583.6
-0.7
DAX
14446.5
14078.2
-2.5
CAC 40
6684.3
6461.7
-3.3
ACWI
712.7
702.4
-1.4
Hong Kong Hang Seng
22039.6
21809.0
-1.0
Nikkei 225
27666.0
26888.6
-2.8
Note: all market data contained within the article is sourced from Bloomberg unless stated otherwise, as at 7 April 2022.
8 April 2022
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Market Monitor – 8 April 2022

1 Manufacturers’ Goods Index, February, United States Census Bureau, 4/4/2022.
2 Oil giant Shell to take £3.8bn hit by leaving Russia, bbc.co.uk, 7/4/2022.

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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 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 Cownnaught 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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