The U.K. Stock market
- On Friday China announced plans to impose new retaliatory tariffs on U.S. imports. Global markets sold off with the UK stock market giving up the gains it had made earlier in the week.
- Global markets bounced back on Monday though after President Trump announced that China had called and they were going to be “getting back to the table”.
- At the G7 meeting in France, Boris Johnson received backing from the US President but no new significant concessions from European leaders regarding Brexit.
- Our Breadth indicator stayed negative and our Momentum indicator turned negative this week.
The U.S. Stock market
- The U.S. stock market was lower again last week.
- China announced tariffs on $75bn of US imports in retaliation for new tariffs announced by the US earlier in the month. As a result markets sold-off on Friday but bounced back this Monday after President Trump said that China called and asked to restart trade talks.
- At the annual economic symposium in Jackson Hole, Wyoming, Fed Chair Jerome Powell reiterated that the Fed would “act as appropriate” to head off a recession. This followed the publishing of the Minutes of the Federal Open Market Committee (FOMC) July meeting which revealed that just two members voted for a 0.5% rate cut, and several were in favour of keeping rates steady. These differences of opinion may cause a problem for Powell and an upset for the current market expectation that the Fed will cut rates again in September.
- Our Breadth indicator stayed negative this week and our Momentum indicator ticked down again.
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