Openwork Market Update 01/07/2019



As we start the second half of the year, the Conservative Party are close to choosing their new leader (and likely to be Prime Minister) from the final two candidates – Jeremy Hunt and Boris Johnson.  Boris Johnson appears to be the favourite and he is committed to leaving the European Union on 31 October 2019, with or without a deal.

While this news dominates local headlines, the on-going trade war rhetoric between the United States and China has been more significant for global stock markets.  The more positive noises leading up to the G20 summit meeting was good for markets and this has been followed with encouraging headlines after the meeting between Donald Trump and Xi Jinping.

As such, the FTSE 100 Index closed June at 7,425.63, which was 3.7% higher than the May closing level.

In the US, the Dow Jones 30 enjoyed a bigger gain of 7.2%, ending June at 26,599.96.

In terms of currency, £ Sterling ended June at 1.27 US Dollars.  This was 0.5% higher than the closing figure at the end of May.

Against the Euro, £ Sterling ended June at 1.12 Euros, which was 1.1% lower than the May closing figure. 

Inflation, as measured by the Consumer Prices Index including owner occupiers’ housing costs (CPIH), was 1.9% in May 2019 (this is May’s data which is reported in June).  This was down from 2.0% in the previous month.  The 12-month rate for the Consumer Prices Index (CPI) rate which excludes owner occupied housing costs and council tax was 2.0% in May 2019, again down from 2.1% in April 2019.

The Bank of England maintained interest rates at 0.75% in June.  The last change was an increase in August last year.  This means long-suffering deposit savers are likely to continue to lose money in real terms when you consider the rate of savings interest compared to the rate of inflation. 

With external influences remaining uncertain, it is likely to remain a volatile period for investors.  

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