Today saw a one-year high for the pound against the dollar, while on Wall Street tech stocks are still being sold in favour of recent laggards in the small-cap space, says Chris Beauchamp, Chief Market Analyst at online trading platform IG.
FTSE 100 rises despite CPI disappointment
“Hopes of an August rate cut have dimmed, and while this initially put the FTSE 100 on the back foot this morning, the index has managed to get back into positive territory. UK investors are digesting the impact of the King’s Speech, which has boosted expectations of a more vibrant British economy."
"The pound surged through the $1.30 barrier today following the inflation reading, and is well on course to reach last July’s highs at this rate.”
Tech stocks keep falling
“While today’s Dow and small-cap gains are but a shadow of recent surges, tech stocks are still firmly out of favour, partly thanks to the selloff in TSMC overnight, and no doubt on some pre-earnings nerves. The Magnificent 7 are widely expected to give way to the ‘other 493’ this time around, as investors finally lose some of their enthusiasm for the big names."
"The Fed has been keen to pour cold water on overeager expectations on rate cuts, the NY Fed’s Williams being out and about today saying that July was too early for a rate cut, but he left the door firmly open for a September move.”
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