This week’s Market Call sees Jeremy and Gareth talk mainly macro - there was very little UK stock news, but a lot going on more broadly.

Markets have had a few days to digest the comments from US Fed Chairman Jay Powell, who last week steered towards lower US rates at the Jackson Hole gathering of central bankers. The fear might have been that this could prompt new worries over the US-Japan carry trade, but so far, both debt and equity markets have been stable...essentially saying "OK, we were expecting this....now please deliver the soft landing with lower rates and stable, low inflation". The US dollar continues to slowly weaken, useful for most non-US nations.

The big corporate news of the week was the much-awaited Q2 results for NVIDIA - a doubling of revenue to $30bn (!), uplift to next-quarter guidance and a $50bn (!) share buyback all looked good, but weren't enough to stop the shares tumbling 7%. We discuss whether this means a cooling of appetite for the "Magnificent Seven" tech titans, or investor concern over the wall of spending - much of which is the others in the Mag Seven buying chips from NVIDIA...we ask whether investor worry over what could be a "winner takes all" game could bring more scrutiny on future investments.

One bright side from this shift in attitude might be that smaller (and non-US) stocks could get more attention from big investors - and once again, the UK would be very well placed to benefit.

Next week is mainly about jobs - some big US jobs data points which, although volatile and hard to predict, will hopefully show that the US economy is robust but not overheating...anything other than that would make it tricky for Jay Powell to engineer the much-anticipated soft landing.

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Gareth and Jeremy discuss the prospects for Jackson Hole, the chances of a rate-cutting cycle starting at the Fed in September, and whether the US is heading for a soft or hard landing.

While the markets see upside, stock market history suggests that the start of these cycles is followed by increased market volatility and corrections. The most recent examples were following cuts in 2000, 2007 and 2019.

For now, the $ is weakening, and the £ and, worryingly, the Yen are strengthening.

Gareth discusses Beeks, Zoo Digital, Watkin Jones, Petro Matad and STV in the UK. Jeremy also mentions a deal announced today by Facilities by ADF.

They talk briefly about the tragic death of tech entrepreneur Mike Lynch.

Next week is quiet but will feature the repercussions from Jackson Hole, Eurozone inflation data, and US core PCE inflation data.

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This week’s Market Call sees Jeremy and Gareth discussing the UK outlook.

UK GDP data was up 0.6% quarter-on-quarter, showing the economy is growing, albeit slowly, and putting the UK at #3 in the G7 group - a reassuring backdrop for investors.

Meanwhile we also had inflation “down but not out”…with the figure this week showing a less-than-expected rise to 2.2%. Producer prices are showing some signs of increase at the output side, and there were slightly higher levels of inflation in terms of inputs which suggests that companies are swallowing some of the price increases. This can’t last forever, so there are a couple of warning bells longer-term for the inflation outlook.

Nevertheless, the outlook for the UK economy seems solid, and the UK markets are seeing good levels of interest from global investors. It might not feel like we’re off to the races, but at least our markets survived the recent volatility relatively unscathed when compared to other major financial centres.

Sterling remains strong, and the US dollar is gradually weakening…strange with global risks rising in both the Middle East and Europe, and potentially a sign of pressure from the central bankers. We’ll learn a lot more from the Jackson Hole meeting of those central bankers in the next week – most of all regarding rate outlooks for the USA and Japan, affecting the all-important but hard-to-quantify Yen Carry Trade, for which a small wobble rocked markets dramatically over the past fortnight.

UK company news saw regulatory approval for a major deal at Beeks, a reassuring update from CML Microsystems, but a major warning from Accesso Technology, who are seeing weak levels of customer visits at the visitor attractions/theme parks they serve.

Next week we have FOMC minutes in the USA, and Japanese inflation data which could re-focus people on the carry trade if the figure is out of line with the 2.9% expectation.

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