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Market Recap.
Equity markets had their best week for the year, as a slew of economic data releases removed concerns of any impending recession, with investors now expecting a moderate economic slowdown instead. Leading the charge, the Japanese stock market was up over 7%. The US stock markets rose almost 4% for the week, with the tech-heavy Nasdaq up over 5%.
News.
Recent concerns about prospects of a US recession eased, as a monthly report on US retail sales beat expectations. The 1.0% sales gain in July surpassed economists’ consensus forecast for a gain of around 0.4%. Another encouraging sign came later last Thursday, when new claims for unemployment benefits fell relative to the previous week.
Geopolitics.
Japanese Prime Minister Fumio Kishida announced his intention to resign as the leader of the Liberal Democratic Party (LDP) last week, confirming he will not run for LDP presidency in September’s internal election.
Inflation.
In the US, a key measure of consumer price inflation known as the Consumer Price Index slipped below 3.0% to 2.9% for the first time since early 2021. Separately, in the UK, the inflation numbers for July were released, with inflation coming in at 2.2% versus 2.3% expected. Inflation is at more reasonable levels today giving central bankers the confidence to reduce interest rates.
Central Banks.
This week, investors and economists will turn their attention to the Rocky Mountain town of Jackson Hole, Wyoming, where the US Federal Reserve will hold its annual three-day economic policy symposium beginning Thursday, 22 August. Fed Chair Jerome Powell is among the featured speakers, with an address scheduled on Friday.
ESG.
Microsoft announced Project ESG Reporting, a new tool aimed at enabling companies to create, review and approve ESG reports across multiple standards and frameworks. According to Microsoft, the new solution, currently in preview, was designed to help organisations solve the challenge of reporting against a variety of voluntary and regulatory reporting frameworks.
Commodities.
Oil was broadly flat for the week at $76 per barrel. Qatar urged Iran to de-escalate tensions with Israel during ongoing Gaza cease-fire talks, which helped to stabilise the price. Gold finished the week at $2,490 per ounce, the highest on record, amid strong demand for safe-haven assets, over concerns of escalation in Ukraine and Russia as Ukrainian forces advanced in Russian territory.
Week Ahead.
Investors will await news from the Jackson Hole Symposium – this is where central bankers, academics, policy-makers, and other influential economic thinkers will meet and discuss long-term policy. Jerome Powell is expected to speak Friday morning at the symposium, where he will likely suggest the US is close to cutting interest rates. The other item in focus this week will be inflation data for Japan.
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Source: Marlborough Multi-Asset, Morningstar, BBC News, Financial Times, PIMCO, John Hancock, ESG Today, Trading Economics
Risk Warnings
These are Nathan’s views at the time of writing and should not be construed as investment advice. The opinions expressed are correct at time of writing and may be subject to change. Capital is at risk. The value and income from investments can go down as well as up and are not guaranteed. An investor may get back significantly less than they invest. Past performance is not a reliable indicator of current or future performance and should not be the sole factor considered when selecting funds.
This document is a general communication being provided for informational purposes only. It is educational in nature and not designed to be taken as advice or a recommendation for any specific investment product, strategy, plan feature or other purpose in any jurisdiction, nor is it a commitment from Marlborough or any of its subsidiaries to participate in any of the transactions mentioned herein. Any examples used are generic, hypothetical and for illustration purposes only. This material does not contain sufficient information to support an investment decision and it should not be relied upon by you in evaluating the merits of investing in any securities or products. In addition, users should make an independent assessment of the legal, regulatory, tax, credit, and accounting implications and determine together with their own professional advisers if appropriate if any investment mentioned herein is believed to be suitable. Investors should ensure that they obtain all available relevant information before making any investment. Any forecasts, figures, opinions or investment techniques and strategies set out are for information purposes only, based on certain assumptions and current market conditions and are subject to change without prior notice. All information presented herein is considered to be accurate at the time of production, but no warranty of accuracy is given and no liability in respect of any error or omission is accepted.
Regulatory Information
Issued in the UK by Marlborough Investment Management Limited, authorised and regulated by the Financial Conduct Authority (reference number 115231). Registered office: Marlborough House, 59 Chorley New Road, Bolton, BL1 4QP. Registered in England No. 01947598.
Issued in Europe by Marlborough Investment Management Limited (authorised and regulated by the Financial Conduct Authority) on behalf of Marlborough ICAV (authorised and regulated by the Central Bank of Ireland). Marlborough ICAV is managed by TMF Fund Management (Ireland) Limited (authorised and regulated by the Central Bank of Ireland)..Marlborough ICAV is registered under the laws of Ireland with registered number C186352 as an Irish Collective Asset Management Vehicle which is constituted as an open ended umbrella UCITS fund with segregated liability between sub funds. Directors: Raymond O’Neill (Irish), Dom Clarke (British), Brian Farrell (Irish), Danny Knight (British) and Martin Ratcliffe (British). Registered office: Marlborough ICAV, 38 Upper Mount Street, Dublin 2, Ireland. The fund is registered and approved under section 65 of CISCA. South African investors must read this document with the latest Minimum Disclosure Document & General Investor Report.
