This week the Federal Reserve and the Bank of England both left interest rates on hold. The recent modest reduction of inflation meant the decisions to leave rates unchanged was no surprise. Jerome Powell and Andrew Bailey tried to cool expectations of early rate cuts but weaker US jobs data re-established the positive mood in bond markets as UK, US and European government debt rallied.
The more interesting story was in US equities as enthusiasm for high-growth tech stocks was tested by mixed trading updates. Although Microsoft’s revenue growth was better than forecast investors paused to catch their breath after its recent rapid growth. Meanwhile, shares in Alphabet and Apple fell as their relatively positive updates failed to keep up with investor expectations. Other tech stocks including Intel and AMD also fell this week as they failed to hit their revenue forecasts. Good results from Meta and Amazon showed tech stocks still have the ability to spring a positive surprise, but markets appear sensitive to any signs that tech stocks may not be able to live up to their high valuations.
For the following stories, please click on this link*
- Rates: US & UK rates held as investors look towards first cuts
- US: Tech stocks struggle to live with aggressive valuations
- Equities: New products deliver for Europe’s big Pharma stocks
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