George Bell, Portfolio Manager, looks at the recent economic data coming from the US, illustrating a resilient and robust economy and how this could be shifting upcoming interest rate decisions. At the start of the month, market expectation were that there would be another 0.5% cut in November, however, these have recently shifted to a 0.25% cut.In China, further measures are being taken to stimulate the economy and ease financial conditions with a 0.25% cut to one and five-year loan prime rates.

This morning our Investment Director, Paul Durrans, previews what we can expect to happen in the markets following several corporate earnings results due this week.

There’s a high focus on the global manufacturing and housing sector, delving into the data from durable goods orders and the PMI Manufacturing Survey.

Also what will reports from Tesla, Texas Instruments, General Motors, Natwest and Lloyds bank mean for your money? Tune in to find out more.

Chris Leyland, Head of Investment Strategy and George Bell, Portfolio manager, look at the European Central Bank and their decision to continue the interest rate cutting cycle after inflation came in at 1.7%. This tracks with market expectations as the eurozone economy was showing signs of stagnating so the hope will be that reduced borrowing costs will support growth. In terms of inflation, a similar story is seen in the UK with headline inflation falling to 1.7%, below the Bank of England’s target for the first time since 2021. With a demonstrated resilience in economies and inflation coming down, we will see further rate cuts before Christmas.

Chris Leyland, Head of Investment Strategy, looks into US earning season and the positive early reports from companies with 80% of the current 50 reports beating market expectations. Morgan Stanley posted a 32% increase in profits from a year ago and US equities on a one month basis are up 4% as we’re starting to see a broadening out of the equity rally, with banks outperforming the main market by 1% over the last week. The key event this week is the European Central Bank interest rate decision where the market has an expectation for a 0.25% cut.

Sebastian Mackay, Investment Director, looks at the UK inflation figures which have came in at 1.7%, beating market expectations and giving the Bank of England a strong signal to reduce interest rates in November. Also in Europe inflation has fallen below the European Central Bank target which gives further expectations to an interest rate cut decision.

Paul Durrans, Investment Director, looks at the recent UK jobs data which has unemployment at 4% with the number of people in jobs at a record level. This puts the labour market in a strong position ahead of the budget in a little over two weeks. However, the Bank of England is treating this data with caution given concerns over the quality of the data. UK wage growth however is unaffected by the same data quality issues and came in at +4.9%, slightly below what economists expected. Paul concludes be discussing what this means for the Bank of England.

This week, our eyes turn to the UK where the last round of major data points is released ahead of the governments budget announcement. Kevin Kidney, Head of Asset Allocation, looks at the market expectation of UK inflation falling below 2% in this weeks print which would put it below the Bank of England target and at its lowest point since April 2021. Global bond markets are already signalling that there could be modest inflation risks ahead which could be compounded by announcements in the UK budget. 

This week, Paul Durrans, Investment Director and George Bell, Portfolio Manager, look at the recent modest improvement in the UK economy after two months of stagnation. Also in focus this week was the US which saw a new record high in equity markets but also saw some volatility within the bond market. China, with its 5% growth target, is facing challenges in the property sector but with more fiscal stimulus promised, markets will be paying close attention this weekend for the size and how the stimulus will be spent.

Investment Director, Paul Durrans, covers the S&P 500 reaching a new record-high and examines how 2024's interest rate cuts in the US are affecting global markets. While fears of a slowing US economy emerged, stronger-than-expected employment data pointed to economic resilience. With further US rate cuts anticipated over the next year, equity markets are rising, but bond markets are showing slight weakness. US inflation is back in focus today with expectations for headline inflation to move below 2.5%. Watch now to stay ahead of these critical market trends.

With the US Presidential Election less than a month away Sebastian Mackay, Investment Director, takes a look at the market expectations for each outcome. He assess the current state of US economy, what markets are currently pricing in and how victory for Trump or Harris could alter the country’s current interest rate cycle.