Weekly Market Update 05/07/2024
It has been a big week of politics, with the UK General Election, US Presidential debates, and the first round of the French election all happening this week. Focussing away from home to begin with, Joe Biden’s campaign looks to have been derailed by calls within his own party for him to step aside, following last week’s disastrous debate. However, Biden is adamant he can continue to represent the Democrats and fight for the presidency.
In France, Marine Le Pen’s Rassemblement National (RN) party has won the first round of the French parliamentary elections. However, polls suggest that the party would fall short of a majority in the second round at the weekend. Some of the centrist and leftist parties have actually pulled hundreds of candidates in a co-ordinated attempt to avoid splitting the anti-RN vote, in order to stop the far-right party from gaining a majority during the voting over the weekend.
Even with exit polls indicating a landslide Labour majority, we watched with bated breath as the UK election results started rolling in at around 11.30pm yesterday evening. It was, however, no surprise to wake up this morning to confirmation that Sir Keir Starmer is the new UK Prime Minister, having won a majority of 412 seats vs the Conservatives’ 121. The Tories suffered huge losses to Labour, but also to a record-breaking year for the Liberal Democrats, and to the Reform party which received more than 4 million votes but only won 4 seats.
The market has responded positively to the UK result, in particular the more domestically focussed stocks of the FTSE250, which are showing mostly green across the board, with this index up 1% so far today at the time of writing. However, with the polls suggesting a landslide victory for Labour for the last couple of weeks, the result was not an unexpected shock to markets.
Andrea Wood, Chartered MCSI
Investment Manager
