The U.K. Stockmarket
- The U.K. Stock market rallied back a little last week following a sharp fall the previous week.
- Data showed UK GDP was stronger than expected in July, rising at its fastest pace in nearly a year and the Pound rose against most currencies.
- The BofE kept short-term interest rates unchanged and Governor Mark Carney said “The Bank of England is well-prepared for whatever path the economy takes, including a wide range of potential Brexit outcomes”. However in a private briefing on Thursday he is reported to have told ministers that a no-deal Brexit could see house prices crash.
- Our Breadth Indicator stayed negative this week and our Momentum indicator ticked lower again.
The U.S. Stock market
- Investor sentiment remained volatile regarding relations between U.S. and China. Early in the week fears that the next round of tariffs against Chinese imports was imminent saw equities lower but the market quickly recovered after Chinese officials welcomed an invitation for new talks.
- However on Thursday President Trump tweeted that the U.S. was under no pressure to make a deal and was later reported as favouring new tariffs on a further $200Bn of Chinese goods.
- Even so, the market finished the week higher with the release of economic data indicating inflation may be easing and raising hopes that the Fed may pause its rate hikes.
- Our Breadth indicator turned neutral (from negative) and our Momentum indicator ticked higher for the first time in five weeks.
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