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Weekly comment: A week of calm before Earnings reports and elections

Date: 03 July 2024

3 minute read

Weekly podcast – Market overview

This week’s host, Investment Manager, Jack Bishop discusses the ups and downs of the past week with Head of Fixed Interest Research, Richard Carter and Will Howlett, Equity Research Analyst specialising in the financial sector. Among the topics discussed – upcoming elections, interest rates and what markets will focus on next.

This is a marketing communication and is not independent investment research. Financial Instruments referred to are not subject to a prohibition on dealing ahead of the dissemination marketing communications. Any reference to any securities or instruments is not a personal recommendation and it should not be regarded as a solicitation or an offer to buy or sell any securities or instruments mentioned in it.

Market overview – Richard Carter, Head of Fixed Interest Research

Global stock markets stood steady in the recent trading week, reflecting a period of relative calm as investors awaited the upcoming earnings reports and UK General Election. The MSCI All Country World Index (MSCI ACWI) saw a slight increase of 0.1%, marking a 2.3% rise in June and an 11.6% gain year-to-date (YTD).

It was a light news week in the US, leading to a lull in market activity. Large cap dipped slightly by 0.1%, despite a 3.6% increase in June and a 15.3% YTD growth. Small-cap companies and tech stocks were the standout performers, with the former edging up by 0.2% and the latter by 0.3%. Tech stocks have been particularly impressive over the past month, boasting a 6.0% growth and an 18.5% rise YTD.

European markets were mixed, with the MSCI Europe ex UK Index losing 0.6%, influenced by political uncertainties in France ahead of President Emmanuel Macron’s snap election. Germany’s large caps managed to gain 0.4%, while France and Italy’s large caps saw declines. The euro remained relatively stable against the US dollar, ending the week as USD 1.07 for EUR.

Japan’s stock markets emerged as the week’s highlight, with the large cap surging by 3.2% and the small cap rallying by 2.4%. The yen’s historic weakness, which saw it plummet to its lowest levels in 38 years, provided a significant boost to the nation’s export-centric industries.

The UK’s quiet week gearing up for change

As the UK steadies itself for a pivotal week, many financial markets have entered a phase of caution as we look towards the upcoming General Election. Large caps have seen a modest decline of 0.8%, mirroring a 1.0% drop in June and a 7.9% YTD increase. Mid cap followed suit, slipping by 0.7%. Amidst these shifts, the British pound has remained stable against the US dollar, ending the week at USD 1.26 for GBP.

Despite the escalating political tension, the financial markets have displayed a surprising level of composure. Over the last month, critical economic indicators, including sterling, the 10-year gilt, and large cap markets, have shown only slight fluctuations.

This week is crucial for the UK as the electorate heads to the polls on Thursday to decide on their next government. It will also be marked by the release of key economic data, including the final June purchasing managers’ surveys for manufacturing and services, which will offer further insights into the economic climate.


Jack Bishop

Investment Manager

Richard Carter

Head of Fixed Interest Research

William Howlett

Equity Research Analyst

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