Tiptoeing into the Christmas holidays

During WWII, civilians were constantly reminded that “loose lips sink ships.” In early 3Q24, it appeared that loose lips can also sink chips as Republican presidential candidate Donald Trump roiled already unsettled markets with his assertion that Taiwan (POC) should pay the US for the latter’s contribution to the island’s defense.

With US inflation behaving itself, French and British elections in the rearview mirror and another corporate earnings season that is expected to bolster the case for (most) current S&P 500 valuations kicking off in earnest next week, risk appetite climbed appreciably during the week ending July 10.

Investors spent the first few days of the third quarter trying to link the potential outcomes of snap elections in the UK and France, and shifts in the American political landscape with the potential outcomes for those countries’ asset markets. It was an exercise that left them in a more cautious frame of mind than they had been for much of the second quarter.