Week ending 12 July 2024
Highlights
Apple regained top spot: making them the most valuable company in the world.
Weekly Market Commentary
Week ending 12 July 2024
US inflation lower than expected: sentiment for rate cuts now appears to be ‘when’ not ‘if’.
Fed chair spoke this week: confirming good progress made in aim to reach the 2% target.
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Market Review
This week saw continued focus on global technology and Artificial Intelligence (AI), as well as inflation information in the US.
Apple regained its spot as the most valuable company in the world, surpassing Microsoft and Nvidia. The collective market value of the three is now over $10 trillion, making up over 20% of the S&P500.
US inflation was below expectations, reinforcing market expectations of cuts later this year. The US 10-Year Treasury yield reached a low of 4.17% on Thursday.
Fed Chair Jerome Powell, spoke on Tuesday, testifying good progress had been
made to bring inflation down from the highs seen 2 years ago. Powell affirmed that the Fed would now turn more attention towards the labour market, in order to see evidence that the economy is cooling off and that the Fed can begin cutting rates.
This week’s US headline and core inflation figures continued moving towards the Fed’s 2% target. They came in at in at 3.0% and 3.3% year-on-year (y/y) to June respectively, slightly below expectations. This was due, in part, to declining prices of automobiles and the smallest increase in rents since April 2021.
Outlook
Central banks appear cautious to commit to imminent rate cuts with the Fed acknowledging the need for further cooling in the labour market. The Bank of England also highlighted concerns over the strength of inflation and wage growth. However, the message now appears to be when they will cut rather than if.
Chart of the Week
Inflation in China: Consumer Price Inflation and Producer Price Inflation. In China, headline inflation came in below expectations with y/y Consumer Price Inflation (CPI) (excluding food and energy) at 0.2%, vs 0.4% expected. Producer Price
Inflation (PPI) continued to be deflationary for the 21st month in a row, coming in at -0.8% y/y. Weak domestic demand held back price growth, as a lack of support from the Chinese central bank for the issues seen in the property market continues to wain on consumer confidence.
What This Means for You
With the latest updates across the globe, there’s continued evidence that maintaining a welldiversified, long-term thinking to your investment approach rather than reacting to market swings is key. By staying committed to carefully considered plans, investors can navigate through periods of volatility and uncertainty.
Has provided the commentary within this document.
