ST. JAMES'S PLACE PLC Financial markets continued their seesaw last week as the US economy showed further signs of strength and the Greek debt drama inched closer to its ending - quite possibly a bad one. While Chinese stocks hit a seven-year high, concerns mounted over emerging market growth.
The latest US retail sales figures showed Americans once again reaching for their wallets. They spent 1.2% more in the shops in May compared with April, and 2.7% more than in May last year. That was as expected. But sales figures for March and April were revised upwards at the same time. These revisions were extremely important, according to Paul Ashworth, chief US economist for Capital Economics, because they change the whole story about the US consumer. "These data confirm unequivocally that the earlier weakness in spending was a temporary, weather-related blip," he said. "The Fed will probably wait until September to begin raising interest rates, but the odds of a July hike just went up."
This week's bulletin also includes:
- Strong US retail sales figures keep a rise in interest rates on the agenda.
- Greece moves one step closer to the precipice as both sides in the debt negotiations lose patience.
- As Chinese shares continue their march, the World Bank warns of a "structural slowdown" in developing countries.
- UK trade and production figures suggest a strong second quarter for GDP growth, while Chancellor George Osborne confirms the sale of the government's RBS stake.
View this week's Market Bulletin, which contains thoughts and opinions of St. James's Place and our range of investment managers on the key issues affecting investors.
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