The UK stock market has come in for some sustained criticism. As we start a new week, let’s remind ourselves of what happened last…
Let’s look at how our market index of leading stocks on the London Stock Exchange has performed of late
FTSE 100 performance – 6 months to 26th April 2024 (source FT)
It is sometimes starting out on a positive note!
All 32 global equity market indices rose this week. at the turn of the centurt the FTSE was 6900, should we be celebrating?
However, in the USA as a result of stubbornly high inflation, due to high wage growth and not to sticky inflation (prices adjusting on average once a year), the consensus has scaled down expectations of Fed rate cuts to just one this year from three until Feb, with a minority view arguing that the next move may be up rather than down.
The yield curve (the spread between the 10Y and 2Y) has remained consistently inverted, implying expectations of a cooling labour market and the economy. If the Fed believed in its own forecast, inflation would hit the target in late 2025. So, the unpredictability of the Fed is the source of uncertainty that overshadows markets and the economy.
Sell in May look the right call ( again)_