In our weekly Market Monday insights, Prosperity Investment Management examines the latest developments across the globe's biggest financial markets - providing you with all the latest information you need to know.
The UK economy grew faster than initially expected in the second quarter of 2021 thanks to a stronger performance from the healthcare and arts sectors than estimates had anticipated.
Figures from the Office for National Statistics revealed that the UK’s gross domestic product had increased by 5.5% in the second quarter - higher than the initial 4.8% expectation. As a result, the economy is now 3.3% lower than the fourth quarter of 2019 - before the pandemic.
The boost brings the country’s economy in line with its European neighbours such as Germany, also at 3.3% below pre-pandemic levels and France at 3.2%.
In the United States, the large-cap benchmarks and Nasdaq Composite index recorded their biggest weekly drops since February and rounded out the worst monthly declines since the onset of the pandemic - seemingly weighed down by inflation and interest rate fears. The S&P MidCap 400 and small-cap Russell 2000 indexes ended with only modest losses. Declines within the S&P 500 were broad with only energy shares notching a gain. Growth stocks fared worse than value shares, which was mirrored in the underperformance of the technology-heavy Nasdaq Composite Index.
Japanese stocks followed the lead of US markets and declined during the previous week. The Nikkei 225 Index lost 4.89% with losses concentrated on Wednesday and Friday, but remained in positive territory for the year-to-date period. The broader TOPIX Index also lost about 5% for the week. The Japanese yen weakened versus a strong US dollar through Thursday but recovered somewhat on Friday; the yen traded around 111.20 against the dollar at the end of the week.