(UN)HAPPY LABOR DAY(TA)
Equity markets were mixed last week. US indices ended the week higher buoyed by higher expectations for rate cuts and a tech rally following a favourable US court decision. European indices finished the week lower amid sluggish consumer spending data.
Over the weekend, Japanese Prime Minister Ishiba announced he is to step down after less than a year in the job meaning fresh uncertainty for the world's fourth largest economy.
This week, French Prime Minister Bayrou faces a snap confidence vote on his proposed €44bn budget cuts. The ECB will give their rate decision on Thursday (no change expected) and we get US PPI and Inflation data which markets will be watching for signs of tariff impacts.
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.
US jobs data came in weak with the non-farm payrolls report showing that the US added only 22,000 jobs against estimates for 77,000. June data was also heavily revised downwards from a 14,000 job gain to a 13,000 job loss - this marks the first negative reading since December 2020. Unemployment also rose to 4.3% - the highest reading since 2021. Despite the gloomy news, markets took the data in their stride seeing the numbers as strengthening the case for a rate cut later this month.
Tech stocks got a welcome bump when a US anti-trust case concluded in Google's favour meaning that the tech giant would not have to be broken up.
Japan's Prime Minister Shigeru Ishiba announced over the weekend that he would step down after less than a year in the job. The announcement brings fresh uncertainty to the world's fourth largest economy as it battles rising food prices and the fallout of US tariffs on its vital auto sector.
Global equities were mixed last week. The S&P 500 finished a shortened trading week up 0.33% while the tech heavy NASDAQ rose on the back of the Google case to notch a gain of 1.14% for the week. On this side of the Atlantic, the Stoxx 600 fell 0.17%.
The poor jobs report helped bond yields edged down over the week as investors increase expectations for rate cuts (bond yields fall as bond prices rise), the 10-year Treasury yield fell by 15bps over the week to 4.08%. In Europe, the German bund equivalent fell by 6bps to 2.67%.
- Tue 9th US - Non-Farm Payrolls annual revision
- Wed 10th US - PPI
- Thu 11th US - Core inflation data • EU - ECB rate decision
- Fri 12th US - Michigan Consumer Sentiment Survey
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.