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Insights

Market Monitor – 8 November 2024

Jim Griffin
Jim Griffin
Investment Content Manager

Donald Trump’s unexpectedly decisive victory in the US presidential election provided a boost for global stock markets

Share prices in America rose to record highs in the wake of the Republican’s success in Tuesday’s poll.

While the reaction elsewhere in the world was not quite as enthusiastic, investors appear relieved that the unambiguous outcome will not lead to weeks of legal or political wrangling in the US – much less a repeat of the scenes of 6 January 2021 when Trump supporters stormed the Capitol building in Washington DC.

The only uncertainty now relates to whether Trump will press ahead with the more extreme economic policies floated during the campaign. For example, plans to impose tariffs on a wide range of imported goods, if enacted, could lead to significant price rises in the US and force policymakers to raise interest rates once again. The introduction of trade barriers would also have a significant impact on countries that are major exporters to the US, not least the larger European economies as well as the likes of Mexico and China.

United States

On Wall Street, the Dow Jones Industrial Average ended trading on Thursday 4% up for the week so far, with the S&P 500 gaining 4.3% to reach yet another all-time high. For once, a Federal Reserve decision to cut interest rates was not the main topic of conversation during the week. As had been widely expected, the Fed delivered a 0.25% reduction on Thursday, but chair Jerome Powell said it was too early to predict exactly how the new president’s policies would affect financial markets. Trump seems set to inherit an American economy that is in robust health, with latest data indicating continued strength in both the services sector and the jobs market.

UK

In the UK, the FTSE 100 closed on Thursday 0.4% down for the week so far despite the Bank of England making its own quarter-point rate cut. The inflationary impact of the measures announced in last month’s Budget has forced investors to temper their expectations of further base-rate reductions, while sentiment was also hit by fears of a potential drag on UK growth from Trump’s tariffs. The latest economic figures showed a slowing of expansion in the services sector in October, largely as a result of pre-Budget uncertainty. Meanwhile, lower borrowing costs in recent months helped house prices in Britain reach a record high.

Europe

In Frankfurt, the DAX index ended Thursday’s session up 0.6% for the week, while France’s CAC 40 gained 0.2%. Share prices across Europe have performed surprisingly well this week, despite a slew of negative headlines. Although the German market slumped on Wednesday on fears that tariffs in the US could threaten the country’s motor manufacturers, among other sectors, stocks bounced back the following day as investors started to question whether President Trump would follow through on his protectionist proposals. The apparent collapse of the ruling coalition in Germany, meanwhile, did little to dent market sentiment. The likelihood that interest rates in the western world would stay near to their current levels for longer than previously expected helped banking stocks outperform as the week wore on.

Asia

In Asia, the Hang Seng index in Hong Kong gained 2.2% despite the threat posed by potential tariffs on imports into the US. Share prices were buoyed by data published on Thursday that showed a sharp rise in Chinese exports in October, apparently as a result of manufacturers’ efforts to ship goods ahead of possible changes in US trade policy. Japan’s Nikkei 225 index of leading shares, meanwhile, advanced 3.5% as Tokyo-listed companies reaped a significant benefit from the surge in the US dollar against the yen in the wake of the US election result. A weakening yen increases the relative value of the overseas earnings generated by Japan’s numerous multinationals, and tends to drive share prices higher.

November 1
November 7
Change (%)
FTSE 100
8177.2
8140.7
-0.4
FTSE 250
20479.7
20635.4
0.8
S&P 500
5728.8
5973.1
4.3
Dow Jones
42052.2
43729.3
4.0
DAX
19255.0
19367.6
0.6
CAC 40
7409.1
7425.6
0.2
ACWI
835.2
862.6
3.3
Hong Kong Hang Seng
20506.4
20953.3
2.2
Nikkei 225
38053.7
39381.0
3.5

Note: all market data contained within the article is sourced from Bloomberg unless stated otherwise, data as at 7 November 2024.

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Market Monitor – 8 November 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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