The infoshot to help kick-start your week
Coming up this week:
US GDP and inflation data – Thursday
Analysts will be keeping a keen eye on US GDP and inflation numbers on Thursday. Increases in defence and security spending have kept the GDP forecast at 2%. Thursday’s update to the PCE index will be being studied closely by the Federal Reserve in advance of their next meeting in three weeks’ time.
Peace talks in Qatar
Iranian and US delegates are set to begin new peace talks in Qatar. Despite the impending negotiations, US forces have launched strikes in Southern Iran targeting missile launch sites and mine-laying boats. The talks will aim to reopen the Strait of Hormuz, reach another 60-day ceasefire agreement that also covers Lebanon, and set up further discussions over Iran’s nuclear enrichment programme.
Last week:
US markets break more records despite worries about the economy
Major US markets closed last week at an all-time high thanks to optimism around a peace deal between the US and Iran and more AI enthusiasm. Markets once again seemed immune from broader concerns about the US economy as 30-year Treasury bond yields climbed to their highest level in 19 years, and the minutes from the last Fed meeting highlighted growing concerns around inflation.
The world’s most valuable company, Nvidia, posted stronger than expected earnings on Wednesday. Data centre revenue nearly doubled for the period and revenue beat expectations. CEO Jensen Huang called it “an extraordinary quarter” and said that “demand has gone parabolic” due to the arrival of Agentic AI. However, the record-breaking quarter wasn’t enough for investors. Nvidia’s share price fell during after-hours trading amid concerns about the evolving data centre landscape and major tech firms starting to develop their own chips.
In other AI news, Elon Musk’s lawsuit against OpenAI, and its CEO, Sam Altman, was thrown out of court last Monday. Musk had accused Altman of deception when he moved OpenAI from a non-profit to a for-profit company. The jury decided that Musk had waited too long to file his case, leaving his claims expired.
UK unemployment rises while vacancies shrink
UK unemployment unexpectedly rose to 5% between January and March. According to ONS director of economic statistics, Liz Mckeown, hospitality and retail sectors “have seen some of the largest falls in vacancies and payroll numbers”.
Job vacancies fell by 28,000 to 705,000 taking vacancies to a five-year low. Firms have been citing economic and geopolitical uncertainty as reasons for halting recruitment. The fall in graduate jobs has continued this year. The jobs platform Adzuna recently estimated there has been a 35% fall in vacancies in the last 12 months. All this has hit younger workers particularly hard, with the youth unemployment rate now at 14.7%, its highest level since 2014.
Japan GDP and inflation data
Japan’s GDP results surpassed analysts’ expectations, posting a 2.1% expansion in Q1, thanks to higher consumption and export numbers. Export growth was helped by a 29.3% increase in semiconductor equipment sales.
Inflation also eased more than expected, down to its lowest level since March 2022. Government action and subsidies in response to the Iran war, saw energy prices fall 3.9% in April.
Notice:
For regulated financial advisers and investment professionals only, Copia does not provide financial advice, and the contents of this document should not be taken as such.
The performance of each asset class is represented by certain Exchange Traded Funds available to UK investors and expressed in GBP terms selected by Copia Capital Management to represent that asset class, as reported at previous Thursday 4:30pm UK close. Reference to a particular asset class does not represent a recommendation to seek exposure to that asset class. This information is included for comparison purposes for the period stated but is not an indicator of potential maximum loss for other periods or in the future.
