Weekly Roundup- Tuesday 17th September

BTS at Propelle

After having some laughs in the office, the laughs got moved to our home offices as edits from the shoots started. Why is it that the moments we have odd facial expressions are the ones that are captured? Ready for some frozen images of the beautiful team? We’re trusting you Propeller’s – these are exclusive and one of a kind shots! 

Last Week’s Major Indexes

Before we dive in…

Indices are lists of major sections of a market. Basically, they give a gauge of the health of a certain financial market. Often when the UK market is strong, the FTSE 100 index (measuring the 100 biggest companies on the London Stock Exchange) will keep moving up. Conversely when markets are bad they fall. You’ll see below the value of the index, as well as how much it changed last week, with a percentage.

FTSE 100 (UK): 8,272.35 +0.02%

S&P 500 (US): 5,626.02 +3.38%

Euro Stoxx 50 (Europe): 4,829.84 +1.05%

Nasdaq (US):  17,683.98 +5.04%

Dow Jones (US):  41,393.78 + 2.07%

Source: Yahoo Finance

N.B these figures are accurate for market close on Friday 13th September 2024

Mini Market Deep Dive

US inflation hits a desired threshold of 2.5%

Data released last week showed that US inflation in August hit 2.5% , falling again from the 2.9% in July. Most governments (the US and the UK included) like inflation to be at around 2%. Inflation in the US has steadily fallen since hitting highs of 9.1% in June 2022. The US (and the UK!) have been using interest rates to try and control the high levels of inflation, meaning that they’re at historically high levels. The Federal Reserve (aka the central bank in the US) have been more hesitant than the Bank of England to drop their interest rates and are yet to make a cut. This inflation news is therefore seen as a large signal to the Federal Reserve that their time to start making interest rate cuts is on the horizon. Many expect that markets would respond positively to the news of an interest rate cut in the US. Watch this space! 

Source: Financial Times

Little Learn of the week

Brent Crude Oil

Brent Crude Oil is the name for the raw material that is extracted from North Sea oil reserves. This is then made into products that we use on a daily basis, such as the petrol that we put into our cars. When it comes to financial markets, the price of one barrel of Brent Crude Oil is used as a key benchmark to gauge the global appetite for buying and selling oil. As using oil is the basis to most economies- think everything from creating goods, to the transport and provision of services, often the price of oil has a huge knock on effect on wider markets and economies. The price of oil increased dramatically when Ukraine was invaded for example, due to fears over a reduction in supply, which caused a spiralling inflation problem in many western countries as prices across many goods and services went up. So you might have thought that as you’re not an oil trader or oil investor this isn’t something you need to know, but given the wider market implications oil prices can have, it’s always worth keeping an eye on. 

Stat / Chart of the Week

$13 billion

Apple has been smacked with a whopper tax bill by the highest court in the European Union, after it was ruled that Ireland had given unfair tax advantages. Whilst it might seem like receiving such a big pay cheque would be good news, many feel that it might impact Ireland’s status as a tax haven for big multinational companies which has caused them to be a popular location of choice for the likes of Apple. 

Source: Bloomberg

Fear & Greed Chart

The Fear & Greed Index is a way to gauge stock market movements and whether stocks are fairly priced. The theory is based on the logic that excessive fear tends to drive down share prices, and too much greed tends to have the opposite effect. It’s made up of seven different indicators that measure some aspect of stock market behaviour. 

This matters to us in the UK because it helps us to understand where general sentiment of the US market sits, which is often closely tied to the movements of other global stock markets, including the UK’s FTSE 100.

After markets swung, the fear and greed chart hit 41, dropping us back out of neutral territory and into fearful territory. Whilst things have quickly looked back up again in the markets, reality is that it takes a little longer for the majority of investors to feel calm and comfortable again. It might well be that by next week we see an uptick again as investors are reassured that things really are going in the right direction. 

Source: CNN

Q&A of the week

Where our members ask us any questions they have. Big or small. Complex or not. We’re here to help.

Any financial news I read seems to feature the US so much, I don’t get it! I’m British, I live in the UK and have an ISA. Why can’t I just look at the FTSE, why do I need to worry so much about what’s going on over the pond?!

“It’s a question we get a lot here at Propelle, especially those who might have investments in the FTSE or other British based companies. Just why is the US so important?! There’s a famous phrase that relates to the global stock markets and goes something like this: “the US sneezes and the world catches a cold”. Historically the US economy, stock markets and currency play a huge role in global trade. In recent years, there has been significant growth in areas such as India and China, but the New York Stock Exchange is still the largest in the world by market capitalisation. This means that when it sees volatility (ups and downs), there is a ripple effect around the world on the smaller stock exchanges, ours included. The same goes for the US dollar. It’s a currency that is still used for many global transactions, including the purchase of things like oil barrels and commodities, such as coffee and wheat. This means that fluctuations in the value of the dollar don’t just affect Americans and their choice of holiday destination, but also those trading their currency with the dollar to buy goods. As a result, financial news is often dominated by tales of the US because it is often the catalyst to changes that we will then see in our own stock market, currency, economies and of course, investments, even if they are UK based.”