WeekWatch

The S&P 500 ended the week 0.5% above where it started, ending a four-week streak of falls – albeit only just.

After an initial election bounce, American equities have struggled in 2025. Part of this has been caused by the ongoing economic and policy uncertainty.

Reflecting this uncertainty, last week the Federal Reserve chose to keep interest rates at their current level.

Overall, the Fed reduced its economic projections for the year, while lifting its inflation forecasts. That said, the majority of officials still believe there will be two 0.25% reductions this year.

Fed Chairman Jerome Powell did note: “We do understand that sentiment has fallen off pretty sharply, but economic activity has not yet.”

One example of resilient economic activity could be jobless claims numbers, which remain relatively low so far.

An alternative metric for judging the US economic health is through company reports. Commenting on the latest company results, Peter McLoughin, Head of DFM Research at SJP, said: “Earnings season is now largely done, but the last week was a little bit worrying. There were a number of companies that issued profit warnings. At this stage there aren’t signs of this turning into a tidal wave of downgrades, and generally earnings continue to hold up in the double-digit growth range. But it’s still something we want to keep an eye on. Most companies remain cautiously optimistic, but a lot of them do note Washington's unpredictability isn't helping matters.”

Nevertheless, with US equities struggling, some are looking at other markets for opportunities.

Filippo Neuimaier, analyst at Redwheel, notes: “Europe faces a challenging macroeconomic backdrop. A complex geopolitical environment, risks of an energy crisis and the threat of being squeezed between the tensions of China and the US are all valid reasons to be cautious on the outlook for Europe today. We do, however, see pockets of real value within European equities that, in our view, have been caused by excessive pessimism about the economic prospects for the region.”

Neuimaier notes that European banks have actually outperformed the Magnificent Seven stocks over the past three years, despite the overwhelming narrative on US overperformance compared to Europe.

And there are further reasons to be optimistic on Europe. Last week the German Parliament passed a massive spending bill. After a couple of years of flatlining growth in Europe’s largest economy, the bill is expected to help create some growth especially for the defence sector.

In the UK, the Bank of England (BoE) mirrored the Fed, by holding interest rates. The Bank noted that global trade policy uncertainty has intensified since its last meeting. The interest rate decision was widely expected and so had limited impact on the FTSE 100, which rose 0.2% over the week. Economists are now generally expecting two interest rate cuts over 2025.

BoE Governor Andrew Bailey fed into this narrative, saying: “We still think that interest rates are on a gradually declining path."

Later this week, UK Chancellor Rachel Reeves will deliver her Spring Statement. She isn’t expected to make any dramatic tax announcements, though spending cuts are predicted. One thing to watch out for will be the Office for Budget Responsibility’s updated forecasts. Since the Budget last year, the UK’s financial situation has become more complicated, so any downward revisions to the forecast will feed into the upcoming summer spending review.

‘When can I afford to stop working?’ It’s the question most of us start asking ourselves when we reach our fifties or sixties.

So, if you didn’t start saving early, is it too late to build up any kind of retirement fund if you’re 60?

The answer is no. Earlier is better, especially when you’re at peak earning capacity (probably in your early 50s), but it’s never too late to start planning - and saving - for retirement, whatever age you are.

With – hopefully – many years ahead of you, it’s important to work out how you will fund them. Having sufficient savings for retirement gives you the flexibility to pursue hobbies, travel, spend time with family, and live later life to the full, knowing that your financial future is secure.

Pensions are very tax efficient. So, it can be worth setting one up, even at 60, since there’s still time to make the most of the tax advantages such as the tax relief added by the government on eligible contributions.

The key to stress-free retirement finances is building in as many flexible options as possible. A pension can play a very important part, but it’s not your only option.

Many people fund their retirement from a range of sources, including state pension and private pension pots, Stocks and Shares ISAs, earnings and property.

This can be beneficial, because money can be withdrawn from each of these in different ways.

The value of an investment with St. James's Place will be directly linked to the performance of the funds selected and may fall as well as rise. You may get back less than the amount invested.

The levels and bases of taxation, and reliefs from taxation, can change at any time. The value of any tax relief is generally dependent on individual circumstances.