Week ending 06/09/24 – Choppy start to September
This week in The Market Call Jeremy and Gareth discuss the choppy start to the month of September - potentially echoing the worries at the beginning of August.
Back in August, the concerns related to a rising Yen and falling dollar, a "carry trade" that might unwind with consequent selling of US assets. This time, the worry is that although Fed Chairman Jerome Powell has told us that the main worry is no longer inflation, near-term economic data need to land in a very small "Goldilocks zone". Too strong (hot) and the economy might stoke the fires of inflation, preventing the rate cuts Jay Powell has pretty much promised; too weak and the economy is cooling fast, potentially falling towards recession territory and jeopardising the soft landing that markets have pretty much promised themselves. Markets seem worried about this too...Japanese equities have tumbled 4%, and NVIDIA has lost almost half a trillion dollars in value, in just over a week.
Relative to these global concerns, UK plc is trading quite well, even if the UK retail investor is fretting about potentially-rising taxes (especially on Capital Gains) in the October budget.
Company news includes a decent trading update from Vertu, strong H1 results from STV and Concurrent Technologies, and an interesting announcement from ASOS, including some positive uses of AI to improve operational metrics and profitability.
By the time this podcast is aired, we will know the US jobs data from Friday - [spoiler alert...Jeremy was right - the number was weak, missed the Goldilocks level, and markets fell]. Next week we will get UK unemployment data on Tuesday, Wednesday brings UK GDP and US inflation data, and an interest rates decision from the ECB on Thursday.
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