Skip to main content
Market Monitor – 6 May 2022

Market Monitor – 6 May 2022

Rising interest rates and the threat of a new global recession have caused renewed turbulence on stock markets around the world this week, with high levels of uncertainty and anxiety among investors leading to major swings.
On Wednesday, for example, markets in the United States posted their strongest gains in almost two years, only to see those advances evaporate 24 hours later

The root of this volatility is the interplay between inflation, economic growth and monetary policy. A number of central banks – including the Federal Reserve in the US and the Bank of England – have raised rates this week as expected in their attempts to bring spiralling price increases under control.
After the dust had settled, the Dow Jones Industrial Average ended trading on Thursday 0.1% up for the week so far, with the S&P 500 finishing 0.4% ahead. Both indices had surged by over 3% during Wednesday’s rally, only to see those gains instantly wiped out as a sense of doom returned to the markets, and yields on some government bonds – an indicator of future interest rate expectations – rose to their highest level in almost four years.

The US

After the dust had settled, the Dow Jones Industrial Average ended trading on Thursday 0.1% up for the week so far, with the S&P 500 finishing 0.4% ahead. Both indices had surged by over 3% during Wednesday’s rally, only to see those gains instantly wiped out as a sense of doom returned to the markets, and yields on some government bonds – an indicator of future interest rate expectations – rose to their highest level in almost four years.

The UK & Europe

In the UK, the FTSE 100 closed on Thursday 0.5% down for the week, following the Bank of England’s latest 0.25% base rate increase. Investors in Britain are particularly concerned about stagflation – a period of high price increases coupled with low growth. BoE governor Andrew Bailey said that the UK’s growth prospects were deteriorating due to inflation and the interest rate policy needed to control it . Sterling fell to its lowest level since mid-2020 on the news.
London-listed energy companies Shell and BP both posted eye-catching first-quarter results thanks to the high price of oil. News of the profits has increased pressure on the government to impose a one-off windfall tax on energy firms in order to help households deal with rising bills.
Meanwhile, new data highlighted the difficulties British manufacturers are facing in expanding their businesses as a result of slowing global demand, international supply-chain problems and the red tape that has been introduced since Brexit.

In Frankfurt, the DAX index ended Thursday’s session down 1.4% for the week, while France’s CAC 40 lost 2.5%. Investors are concerned that the European Commission’s plan to phase out imports of Russian oil will drive costs higher and make the European Union’s manufacturing sector less competitive.

Sanctions introduced after the invasion of Ukraine mean that German exports to Russia have fallen to their lowest level in almost 20 years.

Asia

In Asia, the Hang Seng index in Hong Kong dipped 1.4% as China continues to tackle a number of Omicron outbreaks. On Tuesday, credit rating agency Fitch downgraded its growth forecasts for the Chinese economy citing disruption linked to lockdowns in Shanghai and other major cities.
Japan’s Nikkei 225 index of leading shares, meanwhile, fell 0.1% this week, with rises in the value of the dollar against the yen helping to boost companies’ international earnings and avoid the steep share-price losses seen elsewhere.
April 1
April 7
Change (%)
FTSE 100
7544.6
7503.3
-0.5
FTSE All-share
4185.1
4145.6
-0.9
S&P 500
4131.9
4146.9
0.4
Dow Jones
32977.2
32998.0
0.1
DAX
14097.9
13902.5
-1.4
CAC 40
6533.8
6368.4
-2.5
ACWI
653.7
648.0
-0.9
Hong Kong Hang Seng
21089.4
20793.4
-1.4
Nikkei 225
26847.9
26818.5
-0.1
Note: all market data contained within the article is sourced from Bloomberg unless stated otherwise, as at 7 April 2022.
Read time - 2 min
6 May 2022
Share on linkedin
Share on email
Share on print
Subscribe

Latest articles

A man and two children are planting plants

Proud to be a tortoise not a hare

In the tortoise and the hare, a renowned Aesop’s fable, the steady tortoise famously outpaces the over-confident hare. Similarly in stock market investing, firmly applying sound investment techniques over time can produce solid returns, proving more reliable than trading in and out of the market.

The Simplicity of
One-Decision Investing

When it comes to investing, it can be hard to know where to start. CT Global Managed Portfolio Trust aims to keep your life simple. With just one decision, you can access fully diversified assets and investment professionals do all the work for you. This is a flexible and hassle-free way of investing.
A man and two children are planting plants

A pivotal year is impending

After a tough couple of years for the UK economy, there are grounds for cautious optimism in 2024. Inflation is coming down and the market is pencilling in interest rate cuts.

Back to Insights

  • 13701

How to make your choice

Only once you turn 18 you are able to make a decision on your account. If you’re ready to make a decision you can do so by downloading our CTF Election form. Simply fill it in and send it back to us whatever you decide to do. Download the form using the button below.

Child Trust Fund - Maturity Election Form
Woman with a laptop
Invest Now
Your privacy is important to us. You should read our Privacy Statement and Cookies Policy to better understand how we use your personal information. Learn more
Decline
Accept