Weekly Market Update 08/11/2024
Naturally, the big news of the week was Donald Trump’s historic victory in the US presidential election, which saw US stocks hit record highs. The S&P rose 2.5% on the day, and the tech-heavy Nasdaq 2.7%. It was technology and financial stocks that rose the most off the back of hopes of further deregulation in these sectors. For example, Tesla shares rocketed nearly 15%. The dollar surged against the euro, yen, and pound on expectations of new trade tariffs and tax cuts.
Just two days after the US presidential election, the Federal Reserve cut its benchmark interest rate by a quarter of a percentage point to a target range of 4.50% to 4.75%. Chair Jay Powell cited the strength of the US economy and the aim to avoid weakness in the jobs market. Powell did not comment on the new administration, saying it was too early to judge the substance of any new policies. He did however confirm he would not resign if asked to by Trump.
Back in the UK, on Thursday the Bank of England voted eight-to-one to cut interest rates by a quarter of a percentage point to 4.75%. However, with last week’s Budget forecast to increase inflationary pressures, the BoE signalled there would be no further rate cuts before early 2025 as it assesses the impact of Rachel Reeves’ measures. The central bank last cut rates in August.
Andrea Wood, Chartered MCSI
Investment Manager
