The Cambridge Weekly – 31st July 2023

The Cambridge Weekly – 31st July 2023

Rate rises bouncing off ‘Teflon’ markets

Equity markets continue to be buoyant after the rate rises in Europe and the US. Some market participants have been calling this the ‘Teflon market’ because nothing sticks to it. We would rather think of it as a sort of running machine; no matter how steep the incline of the treadmill, markets seem able to keep running upwards.

Peak rates: are we there yet?

Last week was an historic week for central banks. The US Federal Reserve (Fed) raised its benchmark interest rate to a range of 5.25-5.5%, the highest level in 22 years. The European Central Bank (ECB) followed last Thursday, also raising by 0.25% and matching its highest-ever rate of 3.75%. Both central banks left the door open for further action too. Despite the slowing pace of goods prices, monetary policymakers on both sides of the Atlantic are still wary of underlying inflation pressures and were coy about whether subsequent meetings would see further hikes.

Q2 earnings season update

Corporate earnings reports give companies the chance to put their money where their mouths are. Halfway through the current reporting season, positive results would go some way to soothing investors’ lingering concerns. Economists see global growth as slow, financial conditions as tight, and the hoped for rebound in China being anaemic.

This material has been written on behalf of Cambridge Investments Ltd and is for information purposes only and must not be considered as financial advice. We always recommend you seek financial advice before making any financial decision.


Past performance is not a guide to future performance.


The value of your investments can go down as well as up and you may get back less than you originally invested.


Source of financial market data: MorningstarDirect.