True Potential Morning Markets

Paul Durrans, Investment Director and Matt Henderson Portfolio Manager cover what has been a busy week for markets and economic data. They discuss the latest UK inflation data, which disappointed but continues to trend towards the Bank of England's target. Despite softer UK retail sales they unpick why consumer confidence is rising. Finally, they discuss Nvidia, the company at the vanguard of Artificial Intelligence, was in focus for investors as they reported their earnings results for the first quarter of the year.

The Nvidia share price increase has added approximately $140 billion in market capital as the company communicates that it can’t keep up with demand. Matt Henderson, Portfolio Manager, covers the market reaction to the figures but also on the forecasts Nvidia are making for Q2.

Today marks the lowest level of inflation in almost 3 years and the record fall in energy prices are a major factor. George Bell, Portfolio manager, breaks down the key factors that have resulted in the 2.3% reading and the market reaction. Will the strength of the UK service data continue to push back the decision on interest rates?

In an important week for UK data, Jeff Casson, Chief Investment Officer, reviews comments made yesterday by Ben Broadbent, Deputy Governor at the Bank of England. Of particular interest were the comments on the interaction of wage growth and consumer prices and how it factors into inflation targets. In addition to this the Deputy Governor appears to have changed position on rate cuts in light of the evolving data even though just earlier this month he voted to keep them unchanged. Will the vote swing in favour in June?

Today, Head of Asset Allocation, Kevin Kidney, talks through the imminent release of UK inflation data that is likely to confirm it is back to Bank of England targets and why it may even fall below it. Will the continuing decline of UK price pressures and inflation coming in at target encourage more consumer spending?

Today, Kevin Kidney, Head of Asset Allocation and Matt Henderson, Portfolio manager, review the data from a week which provided record highs in global equities as well as UK employment. US inflation isn’t dropping to the Federal Reserve’s target, however the underlying factors are constructive with strong service sector data and robust employment in major economies. Will rate cuts be needed at all in the US?

This morning, Kevin Kidney, Head of Asset Allocation, discusses the economic factors that have resulted in a new all time high for global equities and the subsequent shift in narrative away from US led equities to the European market. This is turn is feeding a constructive earnings story for global corporates with positive revisions across multiple economies.

Today, Chris Leyland, Director of Investment Strategy, looks at the recent comments made by Fed Chairman Jerome Powell on the slowing of the rapid disinflation which was a key theme in 2023. Navigating the path of inflation has not been smooth but as economic factors shift, will the Federal Reserve change direction?

Paul Durrans, Investment Director, discusses the UK labour market data and how the rising unemployment rate will influence the Bank of England’s next interest rate decision in June. Despite the slight deterioration of employment figures, workers are still benefiting from higher pay. 

Matt Henderson, portfolio manager, looks to the week ahead with the upcoming UK employment data and both the US and European inflation data. With different economic dynamics at play, how will this affect their respective central banks perspective on interest rates?