Market Commentary

February Market Commentary

by Thornbridge

Commentary by Luna Investment Management Limited  – A Thornbridge Appointed Representative

Front cover of February Market Commentary | Thornbridge Investment Management

Commentary by Luna Investment Management Limited  – A Thornbridge Appointed Representative

Markets paused for breath in February after what has been a strong rebound since the Autumn of last year. This was against a backdrop of stickier inflation that has led to many investors believing that interest rates are likely to stay higher for longer and that they won’t fall later in the year. Another catalyst for this was that economic data continues to be robust, despite a backdrop of headlines suggesting that the cost of living crisis is going to push most western nations into recession. This doesn’t appear to be filtering through just yet. To highlight this the UK avoided a technical recession, two quarters of negative economic growth, with 0% registered in the final quarter and slightly higher than the 0.3% contraction in the third quarter.

At the end of the month a number of other economic indicators also started to pick up from depressed levels. Purchasing manager indices (PMI’s) are often viewed as providing a reflection of how the economy is performing at the current time and these were a lot stronger than previous months and showed the UK and US economy starting to return to growth. As well as this the employment market remains robust, with low levels of unemployment still a key feature globally.


US Consumer Price Inflation (CPI) came through at 6.4% in the month, slightly lower than the 6.5% the month before. Closer to home UK CPI remained slightly above 10% but fell from 10.5%. The figures from the US were the key standout to the market as the expectation had been that the pace of falling inflation would have been steeper.


The Chinese stock markets have been on fire in recent months given the reopening from Covid and the authorities coming up with a coordinated plan to support the property market. However, that reversed in February and Chinese markets were significantly lower, this was likely on the back of profit taking but also a tick up in political Sino tensions following allegations of spy balloons over the US.

Author: Thornbridge