Trump accepts his third nomination

The selloff in tech shares continues; an attempted bounce after a near 3% fall the previous day in the Nasdaq fizzled out as the day wore on—the rotation away from tech as the performance from other sectors continues. The ECB left interest rates where they are at yesterday’s monthly meeting, wanting more evidence inflation is heading back to the ECB’s 2% target. Christine Lagarde left the door open for a September rate cut with a wait-and-see comment. It remains very possible that the Fed, the ECB and the Bank of England move in unison in September. Donald Trump has once again looked to influence Jerome Powell, suggesting the Fed should not move interest rates so close to an election as this may play in favour of Mr Biden, who is looking less and less likely to be the Republican candidate. Whoever is in charge of the Democrat party come November, a 25 basis point cut in interest rates is unlikely to aid their situation significantly. We must wait until the end of July for the next Fed meeting, followed quickly by the Bank of England.

As poor Mr Biden sat at home with covid contemplating his future, Donald Trump accepted his third nomination from the Republican Party last night in a 90-minute speech, apparently the longest acceptance speech in history, as he described the moments he heard a bullet pass his head. He talked about unity, reducing taxes, increasing border security and the desire to drill for more oil. The King’s speech on Wednesday, outlining no less than 40 proposed bills, seemed to fly in the face of Mr Starmer’s election pledge to tread more lightly in our lives. It will be interesting to see how Mr Starmer and Mr Trump deal with each other in the future, as both seem to disagree on many things.

The latest US manufacturing production data surprised on the positive side. In contrast, the latest Fed beige book survey supported the view that the US economy is weakening but not, at present, close to recessionary signals. The soft landing scenario remains in place.

The latest UK employment data reported that the unemployment rate remained at 4.4%, and the average earnings came in slightly below expectations at 5.7%, with wages continuing to grow in real terms. Surprisingly, retail sales fell 0.2% year on year in June. Maybe that can be put down to the uncertainty over the election, and maybe we are also waiting for the sales to start.