Weekly Digest - INVESTEC
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US equities finished down on the day on Friday as they- along with most other key asset classes- reacted to a set of payroll data that comfortably exceeded expectations. The reading showed 224,000 new jobs created in June compared to expectations of 160,000. This strong reading took some of the momentum out of the market’s conviction that the Federal Reserve could lower rates three times this year. We should get some insight into this later in the week when the current Chair of the Federal Reserve, Jerome Powell, makes his biannual address to congress (Wednesday and Thursday).
UK markets closed relatively flat today, though this is perhaps slightly better than one might have expected given the declines in the US and Far East. Imperial Brands led the FTSE 100 higher after it announced a revised capital allocation policy and a £200 million share buyback programme.
Elsewhere in Europe, the Greek election result on Sunday saw Tsipras and the Syriza-led alliance lose power. Instead, the more business-friendly, centre-right Mitsotakis led his New Democracy party to an absolute majority in parliament.
In expected news flow this week, the minutes from the Federal Reserve’s most recent meeting will be released on Wednesday followed by US inflation data on Thursday. At the moment, core inflation (which excludes food and energy) is expected to be up 2.0% for the year to June, unchanged from May’s reading.
The results season starts to pick up momentum again this week, with Citigroup earlier today, Pepsi, Goldman Sachs, Burberry, Rio Tinto, Experian and Wells Fargo amongst other releasing Q2 results tomorrow to start a busy reporting week.