Thursday, 27th July: The result of the Federal Reserve’s meeting fed through over Asian trading overnight, with Europe reacting at the open. The dollar fell following comments that inflation remains “below” their inflation target of 2%, although other parts of the US economy remain balanced. As expected, rates were kept on hold between 1-1.25%, with one more rate rise this year still looking to be on the cards. The meeting also revealed the Fed looks set to begin unwinding its $4.5trn balance sheet “relatively soon”. As European markets opened this morning the dollar was still down vs the euro, pound and Japanese yen, although this reversed over the course of Thursday. US stocks shook off any uncertainty from the Fed, pushing higher as the corporate earnings season continues. Indices once again reached new record highs; at the time of writing the Dow Jones is +0.28% and S&P 500 +0.19%.
Car production in the UK fell 13.7% in June vs a year earlier, the 3rd consecutive month output has fallen. However, the Society of Motor Manufacturers and Traders (SMMT) who release the data has said the UK market is actually cooling in line with forecasts, following a long period of record growth. However, the industry is likely to fall short of producing 2m cars a year by 2020, the current ambition. The fall in production mirrors a fall in UK car sales, with sales in the first half of 2017 down 9.5% vs 2016.
Pharmaceutical giant AstraZeneca suffered its biggest ever daily decline after reported first quarter revenue declines of 10%. However, adding salt to the already open wound was the failure of the group’s lung cancer trial, the most anticipated clinical experiment in the pharmaceutical industry this year. The group plummeted to the foot of the blue chip index, falling c.16% in early Thursday trade, closing lower by 15.41%. It dragged the FTSE 100 lower by -0.16% at the close, despite Diageo adding >5% after reporting a 4% rise in full year sales.