Week ending 19/07/24 - The Trump 2.0 Trade

The Market Call

Gareth and Jeremy discuss the tumultuous week that was.

With England’s football woes kicking off the week, the rest was dominated once again by politics. In the UK the new Labour government’s policies were outlined in the King’s Speech, with much talk around changes to the planning process and the likely positive repercussions for UK housebuilders and the construction sector as a whole.

Trump’s near assassination, recovery and then announcement of Vance as his running mate in the VP slot, gave plenty more to discuss. They talk about the rise of JD Vance and his links to various tech billionaires, then contemplate what a second ‘Trump Trade’ and ‘MAGA’ regime might look like, and what the repercussions might be for the Fed, the US and the rest of the global economy. Yield curves have already steepened and the USD weakened, whilst gold prices reached a new all-time high and there began to be a discernible swing in the equity markets from large cap to small cap.

In China weaker GDP data in the second quarter continued to trouble the rest of the world. In the US inflation was heading in the right direction towards the 2% target and UK inflation remained on target at 2%, with UK unemployment rates unchanged and a period of real wage growth continuing.

Progressive companies discussed include Secure Trust Bank and Pharos Energy, and other stocks mentioned include luxury goods companies Hugo Boss and Richemont, which followed Burberry and warned this week citing weakness in demand from China.

Next week there’s likely to be more political discussion around Biden’s suitability as the Democrat candidate, and economic highlights will include German consumer confidence data on Tuesday, UK PMI on Wednesday, US Q2 GDP data and on Friday, US PCE inflation figures.

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