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President Trump escalated his attack on Fed independence by stating that he had fired Fed Governor Cook over alleged fraud, though Cook has since filed a lawsuit against Trump's move. Late on Friday, the US appeals court ruled that most tariffs imposed by the Trump administration were unlawful.
In Europe, political uncertainty rose in France as the prime minister called a confidence vote for next Monday amid budget disagreements.
This week, US employment data on Friday will be the main point of interest, including any revisions to past data, especially since the Fed cutting rates later this month is dependent on softness in the labour market and further weakness in the data could lead to more aggressive cuts. ISM manufacturing (tomorrow) and services (Thursday) may also be of note, as well as Eurozone August retail sales (Thursday).
With summer behind us and investors refocusing, investors face a complex backdrop. Click on the button below to view our Chief Investment Strategist, Lenny McLoughlin, breaking down the key dynamics to watch – and how they may influence asset allocation, risk, and opportunity.
On Monday, Trump escalated tensions with the Fed as he announced the firing of Fed Governor Lisa Cook on the grounds that there was “sufficient reason” to believe she had made false statements in relation to mortgage agreements. Later in the week, Cook filed a lawsuit against Trump's "unprecedented and illegal attempt" to remove her.
France's Prime Minister Bayrou called a confidence vote for September 8th amid disagreements on how to reduce the budget deficit, thereby raising political uncertainty. The government is expected to lose the vote, leaving the possibility of fresh legislative elections.
Nvidia's latest quarterly revenue came in above market expectations and was up 56% y/y, but guidance for the current quarter disappointed some amid uncertainty around sales to China that could hamper profits.
After the market close on Friday, the US appeals court ruled that most of the Trump administration's tariffs were unlawful but that they could stay in place until October 14th to give the administration time to appeal the decision with the Supreme Court.
Global equities fell last week, hampered by slight disappointment with guidance from Nvidia and profit taking after the recent strong run while political concerns in France weighed on sentiment in Europe. The S&P 500 ended last week down by 0.1% whilst the Stoxx Europe 600 was off by 2.0%, dragged lower by a 3.3% decline in France's CAC 40 index.
The fallout from Fed Chair Powell's Jackson Hole speech, in which a rate cut was signalled for September, helped lower US bond yields (bond yields fall as bond prices rise), with the 10-year Treasury yield down by 3bps over the week to 4.22%. In Europe, the German bund equivalent fell by 1bp to 2.71%.
- Mon 1st Eurozone - Unemployment rate
- Tue 2nd US - ISM manufacturing • Eurozone - Consumer-price inflation
- Wed 3rd US - Job Openings and Labour Turnover Survey (JOLTS), Fed Beige Book
- Thu 4th US - ISM services, initial jobless claims • Eurozone - Retail sales
- Fri 5th US - Employment report • Germany - Manufacturing orders
This is intended as a general review of investment market conditions. It does not constitute investment advice and has not been prepared based on the financial needs or objectives of any particular person.