Weekly Market Update – 07/06/2024

This week, the European Central Bank cut interest rates for the first time since 2019. Rates were cut by 0.25% to 3.75%, a move that the Federal Reserve and Bank of England are yet to follow, although both of these central banks are holding their next policy meetings in the coming weeks. ECB president Christine Lagarde said, although this marked the beginning of lowering rates from their all-time highs, future reductions would depend on price pressures.

On Wednesday, Nvidia’s market value increased to over $3tn, overtaking Apple as the world’s second most valuable company, behind Microsoft. This was fuelled by a year of incredible growth driven by demand for it’s AI chips from tech companies such as Google, Microsoft, and Meta who are spending billions of dollars on these chips. There seems to be no sign of this spending slowing down in the near future as the AI race continues.

The first UK TV election debate of the year happened this week, with current Prime Minister Rishi Sunak perceived to have won the contest over his rival Kier Starmer with a YouGov snap poll indicating a win by the narrowest of margins of 51-49. Sunak’s main focus was that a Labour government would raise taxes by £2,000 per household due to unfunded spending plans, a calculation Labour have firmly rejected.

Andrea Wood, Chartered MCSI
Investment Manager