- The UK stock-market had a strong week despite a number of issues weighing on sentiment, including concerns over the spread of the delta variant of Covid-19 and disappointing trade data from China.
- European stocks also had a good week supported by strong corporate earnings and central bank support.
- UK GDP data released on Thursday by the Office for National Statistics showed the UK economy grew by 4.8% in the second quarter – a bounce back from the first quarter contraction of 1.6% and adding to concerns that the Bank of England (BoE) might start cutting back on its stimulus programme sooner than previously thought.
- Our Breadth indicator stayed positive but our Momentum Indicator ticked lower again.
- The start of the week was lacklustre with investors weighing the previous Friday’s stronger-than-expected US jobs data which sparked concerns the Fed may begin tapering earlier than expected.
- On Tuesday, the government’s $1.2 trillion infrastructure bill won Senate approval. This will be a major victory for Joe Biden if it wins final approval in Congress. Biden said the bill “is going to help make a historic recovery a long-term boom”.
- The market rallied back on Tuesday and gained on Wednesday after CPI data showed prices rose 5.4% over a year but moderated in July which eases pressure on the central bank.
- The latest US Producer Price Index was released on Thursday and came in stronger-than-expected suggesting inflation may not have peaked.
- Our Breadth Indicator stayed negative and our Momentum Indicator ticked lower again.
The Big Picture 13th August 2021
Market Sentiment 13th August 2021
U.S. Risk Barometer 13th August 2021
Europe Risk Barometer 13th August 2021
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This communication is not intended as a recommendation to invest in any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication. The information provided is for illustrative purposes only, it should not be relied upon as recommendations to buy or sell investments.’