Weekly Round Up
UK markets ended the week slightly in the red with the FTSE 100 Index falling by 0.3% to 7,124.98 at the time of writing.
Investors in the UK and globally remained cautious ahead of the US Federal Reserve Chair, Jerome Powell’s speech today on hopes it will unveil more details on the central bank’s timeline to taper its asset purchase programme and the outlook for the US economy.
The yield on UK 10-year government bonds rose above 0.6% during the week, to their highest level since mid-July. Concerns over rising Covid-19 infections and supply chain disruptions brought fears back to the market.
UK factories produced 53,438 cars in July 2021, down by 37.6% from 85,696 a year ago, the first fall since February. This is the worst July performance since 1956 as manufacturers grappled with the global shortage of semiconductors and staff absence resulting from the ‘pingdemic’.
In China, The Shanghai Composite Index rose 0.65% to 3,524 in early trading on Friday and is on track to climb 2.8% weekly. This is amid easing worries over tightening liquidity following reports that the People’s Bank of China increased its short-term fund injection this week by offering a net CNY 120 billion, the most cash on a net basis in nearly seven months.
Profits earned by China’s industrial firms rose 57.3% year-on-year, following a 66.9% surge in the prior period. A 16.4% year-on-year growth was reported in July alone, amid stable recovery momentum, with profits continuing to grow for both state-owned industrial firms and the private sector.
In the US, stock futures were trading higher on Friday, with the S&P 500 Index set to end the week with modest gains.
US stocks were lifted following reports that the US economy grew an annualised 6.6% in Q2, which was slightly higher than 6.5% in the advanced estimate, amid a more robust pace of consumer spending and business investment.
A preliminary estimate showed US corporate profits jumping 9.7% to a record high in Q2 due to solid demand and higher prices. Wall Street ended lower on Thursday, owing to the attacks at Kabul airport in Afghanistan.
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