Market Update – 27th July 2022.

It’s been a mixed bag for markets so far this week –the US dipped into the red over the first two days of the week following concerns that a profit warning from Walmart, the US retail giant, is an indicator of what’s to come. However, later in the day Texas Instruments, Alphabet and Microsoft all released earnings that will please markets, with their share prices jumping two-percent, three-percent and five-percent in news during after-hours trading.

With these releases came an encouraging demand outlook, which will bring optimism to markets.

The Federal Open Market Committee started their two-day policy meeting yesterday, which will culminate in an interest rate decision released later today; it is likely that they will effect an interest rate hike this month, and then sit back to see what happens, given that the next meeting won’t be until late September.

Moving to energy, Gazprom, the Russian state-owned gas company, announced that they are cutting supply of gas through Nord Stream to 20% of capacity from today. Gazprom has stated the reason being that another turbine is due for maintenance – given that this is the main pipeline from Russia to Europe, the reasoning was viewed with scepticism; German Economy Minister Robert Habeck said it “simply isn’t true”. The EU energy minister has planned for a voluntary reduction in gas by 15% next winter to prepare for potential reduction of supply – the EU energy commission is committed to readiness in the event of any politically motivated cutting off of gas.

And in the UK, the FTSE has remained buoyant so far this week; 3.5 million viewers tuned into watch the UK leadership debate on BBC One on Monday, between Rishi Sunak and Liz Truss. The viewing figures topped Love Island (which came in 2nd), broadcast at the same time on a rival channel.

The UK will announce a new Prime Minister on 5th September.

Coming up this week, we have US GDP, and CPI inflation for the Eurozone and Japan.

Investment Management Team

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