UK Government Embarks on Complete Reshuffle, Soaring to New Heights

A Chill Summer in the Markets

While the world was soaking up the sun, the equity markets played it cool – barely moving, all day, with just a few things that could have rattled things up a notch.

Stocks: A Slight Hang‑On

Global equities slipped a touch last week after picking up a little earlier.
UK and US shares nudged up about 0.5 % in sterling terms over the past two weeks.
Europe, Japan and the emerging markets were all down around 0.5 %.

Bonds: Holding Their Own

Government bond yields were pretty static: the US Treasury fell a sliver, while the UK gilts climbed a fraction – netting tiny gains for US debt and a dabble of losses for UK bonds.

Gold: A Sudden Spark

Gold fires back, rising 3 % and sullypicing towards $3,480 this morning.
That high is the absolute peak the metal hit in April.

Federal Reserve: The Strip‑Tease of Cuts

At Jackson Hole, Chair Powell teased a rate cut later in September, claiming that a softer labor market could balance out inflation fears tied to Trump’s tariffs.

The market had already eyed a 0.25 % cut on September 17, and Powell’s comments just cemented that expectation.
Recent US data didn’t upend the story: Q2 growth tipped up to a robust 3.3 % annualized rate, but the underlying pace was gentler at 1.9 %.
The Fed’s core inflation measure nudged up to 2.9 % in July.

Trump’s Walk‑through Politics

Trump suddenly fired Federal Reserve Governor Lisa Cook for alleged mortgage fraud.
Cook is contesting the move – it could head to the Supreme Court.
Trump is trying to arm the Fed with his buddies. The position of Powell’s successor runs until May, setting the stage for a possible 3 % rate cut by next year – even though inflation could loop over 3 %.
Despite the drama, bond yields remain calm, and the 10‑year Treasury is now back at 4.2 % – a full 0.6 % lower than its January peak.

Tariff Drama

US slapped a 50 % tariff on Indian imports; 25 % were a slap for Russian oil.
Friday, a US court declared most of Trump’s tariffs illegal – the ruling kicks in on October 14, but the Supreme Court may still side with Trump.
Even if the court nixes them, the tariffs won’t disappear – they’ll likely survive under other legal twists.

Nvidia: Just Enough to Shake Your Pocket

Q2 results: revenue up a huge 50 % YoY, net profit up 59 %. Nothing shy of good.
Still, shares fell modestly 2 % – because folks are uneasy about China, the longevity of the fire sale, and the stock already leaping 30 % this year.

France: Congress in the Crosshairs

Prime Minister Bayrou called a confidence vote on September 8 after failing to get enough blessings for his budget cuts.
If he loses, the Parliament could be stuck in a deadlock – maybe call new elections or spin a new government. Either way it’s a dampener for the markets.

UK Shake‑Ups

Starmer’s team gets a revamp – cutting a key secretary and re‑arranging his backroom.
Labour’s no‑tax‑increase pledge is already the headline. The current budget will have to look at raising taxes on property, wealth, pensions, capital gains, rental income – Trevor Reeves scrambles, but no specifics yet.
Bank stocks dipped 4 % amid fear of tax hikes to the sector.