Week ending 23 August 2024
A flat week for equities: no significant movement, the S&P500 increased by just over 0.30%.
Weekly Market Commentary
Week ending 23 August
The Federal Open Market Committee released their minutes: most members are in favour of cuts in September.
US Jobs data releases:: could be crucial for the Fed determining the size of the rate cuts next month.
Welcome to our weekly market update. Our focus is on providing clear, concise insights into stock and bond market movements and the broader economic landscape. The views expressed here are subject to change without notice and we can’t accept any liability for any loss arising directly or indirectly from any use of it. This is for your information only. It is not a recommendation or advice, if you’re unsure about anything please speak to your financial adviser.
Market Review
Last week saw equities enjoying their most successful week this year, with the S&P 500 Index up almost 4%. The market has risen for seven straight weeks, the best run since October 2022. This week equity markets were flat and it has been a very quiet week from a trading perspective. Bond markets were also flat. Federal Open Market Committee (FOMC) minutes have been released which sets the stage for US rate cuts in September, revealing that several members are in favour of a 0.25% cut.
There has been mixed Purchasing Managers Index (PMI) survey data this week. In the UK, both manufacturing and services were up, beating forecasts. In the Eurozone, manufacturing
data was down and worse than expected, whilst services data was up and higher than expected. Investors are looking forward to Fed Chair Jerome Powell’s speech on Friday and Nvidia’s earnings next week.
Outlook
Central banks are warming to the idea of rate cuts. The Fed hinted that its first rate cut could come in September, markets now assign a 100% probability of a rate cut in September. Investors and central banks alike continue to focus on key data points that could provide insight into the relative health of economies, while corporate earnings will be in focus as well.
Chart of the Week
US job’s – growth data. The number of workers on payrolls was revised following a data release this week, revised down by 818,000 (bars in the chart reflect the unadjusted numbers), but still equate to a respectable monthly average of 175k job additions.
However, it may be more important to consider the movements since March 2024. As you can see from the chart the trend has been softening, and what happens in the September’s data release could heavily influence the Fed’s decision on the size of the pending interest rate cuts.
What This Means for You
With the latest updates seen across the globe, there’s continued evidence that maintaining a well-diversified, 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.
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NOTE THE FOLLOWING
This guide is for general information and is not intended to address your personal and financial requirements and should not be deemed or treated as constituting financial advice. Nor does this guide constitute tax or legal advice and should not be relied upon as such. Tax treatment of investments and legal advice depends on the individual circumstances of each client and may be subject to change in the future. For further guidance on the matters discussed in this guide please speak to Shane Fox, who is a regulated financial adviser.
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SAMANTHA HAGON