Weekly Market Update 09/08/2024
Global markets faltered on Monday off the back of fears of a US recession due to the slow response by the Federal Reserve to cut interest rates after signs that the US economy has started to weaken. Last week’s jobs report showed a much sharper slowdown in hiring than markets had anticipated, and recent earning reports had indicated a slowdown in consumer spending.
Japan’s Topix experienced its largest decline since “Black Monday” in 1987, falling 12.2% and erasing all gains made over the year. The FTSE100 dropped over 2% at the open, and finished the day at a similar level. The S&P closed out the day 3.0% lower, with the tech-heavy Nasdaq taking a slightly larger hit at 3.4% down. The sell-off was across the board, with 95% of S&P stocks falling, but the large tech companies were among the worst hit. At it’s worst, Nvidia was down over 15%, but closed down 6.0%.
In more positive news, according to data released by The Royal Institution of Chartered Surveyors (RICS) on Thursday, the UK property market is showing signs of picking up following the result of the general election and the Bank of England’s first rate cut of 2024, with more expected to come. The previous day, data from Halifax showed house prices had risen 0.8% in July, following three months of relatively flat growth.
UK investment platform, Hargreaves Lansdown, has agreed to a £5.4bn takeover by a group of private equity firms, with shareholders set to received £11.40 cash per share. This price includes a final dividend of 30p for the last financial year. Shares in HL peaked at £24 in 2019, but fell on criticism of a previous technology overhaul. At the time of writing, shares are up around 2.0%, at £11.00.
Andrea Wood, Chartered MCSI
Investment Manager
