This week, Jeremy and Gareth describe what felt like a more normal few days, with signs of a slowing US economy and falling bond yields. This was suddenly upended by the public and bitter (and very rapid) falling apart of the Trump-Musk relationship. Musk's backing of Trump was predicated on promises of a smaller state, but Musk (and DOGE) have failed to deliver the meaningful cuts promised. Now we have Musk shouting from the sidelines about the unsustainability of the budget deficit, which could lead to downward pressure on the dollar, upward pressure on yields and increased expectations of inflation - hence buying of Gold.
The UK has had its growth forecasts downgraded by the OECD to levels well below those of the OBR (and presumably Rachel Reeves's expectations). Hence, the likelihood appears to be further tax increases and spending cuts. The Mansion House Accord and the Pensions Investment Review give some (but potentially morally questionable) impetus and cause for optimism, but Wise Technologies plans to move to a main US listing, and a pulled cobalt-related IPO bring us back to earth.
Progressive stocks mentioned include IG Design Group, tinyBuild, and SDI, all of which have recent news. However, most broadly relevant is Van Elle, whose early-stage involvement in housebuilding projects is being delayed by building regulator logjams. Alongside a warning from MJ Gleeson, this points to a more cautious view on the recently rosier prospects for housebuilders.
Next week is all about US data - non-farm payrolls, inflation data and sentiment from the University of Michigan...
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