The U.K. Stock market
- Stock-markets in the U.K. and Europe were higher this week. Investors became more optimistic as economies begin to re-open but an uptick in coronavirus cases in U.S. and China is a worry.
- The Bank of England increased its bond-buying program and left interest rates unchanged at a record low of 0.1%. Minutes from the Monetary Policy Committee meeting suggested a faster economic recovery was now expected.
- UK inflation slowed to 0.5%, a four-year low, as the price of oil fell. UK and EU negotiators agreed to increase the pace of post-Brexit talks, which have found little agreement so far.
- Our Breadth indicator stayed neutral this week and our Momentum indicator, although still negative, ticked up again.
The U.S. Stock market
- Hopes for economic recovery outweighed concerns over new coronavirus outbreaks this week and the U.S. stock-market was higher despite a warning from the International Monetary Fund (IMF) that “the forthcoming June World Economic Outlook Update is expected to show negative growth rates even worse than previously estimated.”
- U.S. Economic data was mixed this week with a much better than expected surge in retail sales in May, but a less than expected fall in weekly jobless claims. The Fed announced on Monday that it will begin purchasing individual corporate bonds to supplement its bond-buying program.
- Our Breadth indicator stayed positive this week and our Momentum indicator, although still negative, ticked higher again.
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