FTSE 100 rises on hopes of US rate cut in September.

From Morningstar: 2024-07-03 08:30:00

The FTSE 100 rose this morning due to optimism over a potential US Federal Reserve rate cut in September. Federal Reserve chair Jerome Powell expressed confidence in downward US inflation trends but did not provide specifics on rate cuts. International Consolidated Airlines Group, Fresnillo, and Barclays all saw stock increases, while JD Sports Fashion, 3i Group, and Compass Group experienced drops.

As polling opens for the UK general election, analysts predict the Labour Party, currently leading in polls, may have limited financial flexibility to enact its manifesto promises. The party might need to raise taxes and adjust fiscal rules to accommodate increased spending. Analysts at DBRS Morningstar believe a Labour government could increase growth with its economic plans but caution about execution risks and the need for significant investment.

The Labour Party’s manifesto includes plans for substantial capital expenditure to promote economic growth and environmental initiatives. These include funding for port upgrades, new gigafactories, steel industry rebuilding, and carbon capture development. Analysts see potential in Labour’s policies but highlight risks related to the scale of investment and effectiveness of implementation.



Read more at Morningstar: US Rate Cut Hopes Buoy FTSE 100 Ahead of Election