Global equity markets ended the week higher as one of the year’s many elections resulted in a change in government in the UK for the first time in 14 years. Given that polls had suggested a large Labour majority was likely, market reaction was limited, with the FTSE 100 up 0.5% on the week and sterling moderately weaker, although the FTSE 250 rallied 2.47%, suggesting greater domestic optimism. Rachel Reeves will now become the UK’s first female Chancellor and is expected to bring in only modest policy changes initially, with the Labour manifesto espousing fiscal discipline rather than any radical shifts in stance.
Market attention can now turn to France, where the second round of voting in the parliamentary elections resulted in a hung parliament, with the left-wing New Popular Front set to be the largest party. The French CAC 40 recovered 2.62% in local currency, recouping the previous weeks losses, as it became clear Marine Le Pen’s far-right National Rally party was unlikely to gain a majority. Elsewhere in Europe, the German DAX 30 closed the week up 1.32%, while the Swiss SMI ticked up 0.63%.
US markets enjoyed a positive week, with the S&P 500 up 1.95% and the NASDAQ Composite up 3.5%. It was a shortened trading week, as Wall Street took the day off to partake in the Fourth of July celebrations. Survey data highlighted the challenge for policy makers of gauging the health of the US economy: the Institute for Supply Management services PMI plunged from 53.8 to 48.8, into contraction territory, while S&P Global’s services PMI, released on the same day, indicated improvement, as it ticked up from 55.1 to 55.3. Similarly, the latest jobs data gave mixed indications, as the JOLTS report revealed job openings barely rose in May from their 3-year low in April, while employment growth came in stronger than expected for June, albeit still a decline from the previous month.
In commodities, the price of a barrel of West Texas intermediate crude oil closed the week higher at $84.29. In a strong week for metals, the price of copper rebounded following six weeks of weak trading, while gold and iron ore also rose.
Week Ahead
| Day | Country | Measure | Period | Forecast | Previous |
| Wednesday | Japan | PPI YoY | June | 2.90% | 2.40% |
| China | CPI YoY | June | 0.40% | 0.30% | |
| China | PPI YoY | June | -0.80% | -1.40% | |
| Thursday | UK | GDP MoM | June | 0.20% | 0.00% |
| US | Core CPI MoM | June | 0.20% | 0.20% | |
| US | CPI MoM | June | 0.10% | 0.00% | |
| US | CPI YoY | June | 3.10% | 3.30% | |
| US | Unemployment Claims | June | 236K | 238K | |
| Friday | US | Core PPI MoM | June | 0.10% | 0.00% |
| US | PPI MoM | June | 0.10% | -0.20% | |
| US | UoM Consumer Sentiment | June | 67.0 | 68.2 |
Source: Refinitiv Workspace, 08/07/24
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