- 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.
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