- Macro: Equity markets had a quiet day yesterday with US markets closed for Labour Day holiday, Europe was slightly positive +0.23%. In Europe, it was a balanced day with six of eleven sectors higher, and 48.7% of stocks in positive territory. Industrials and Healthcare were best, with Utilities and Consumer Discretionary worst. Defence and Aerospace stocks like Leonardo (+4.5%), Rheinmetall (+3.5%) and Rolls-Royce (+2.8%) had a strong day, after it was reported that Europe is working on plans for post-conflict deployment of forces in Ukraine. In macro news yesterday Ireland’s Manufacturing PMI declined slightly to 51.6 from 53.2 in August, whilst for France the August final Manufacturing PMI reading was revised up slightly to 50.4 from 49.9 and for the Eurozone the Mfg PMI was raised to 50.7 from 50.5. The UK’s Nationwide House Price index fell -0.1% MoM in August, leading YoY increases to miss expectations by 0.6% at +2.1% YoY. Also, in the UK for July, mortgage approvals beat estimates at 65.4k. The Eurozone Unemployment rate remained stable as expected at 6.2%. Finally, preliminary Irish harmonised CPI rose to +1.8% YoY in August (vs +1.6% prior) Economic releases today include the French Budget balance; EU’s CPI preliminary read for August (2.2% YoY est.). And in the US, we get finalised US Manufacturing PMI, and the August ISM manufacturing survey (Aug 49.0 est., 48 prior), with July’s Construction Spending data (-0.1% est., -0.4 prior). From the Central Bankers, only Muller from the ECB is expected to speak today.
- Stock: Ryanair: (Overweight: PT €29.50, Upside 17.4%) Update on August traffic numbers.Uniphar: (Overweight: PT €4.75, Upside 17.5%) Review of H1 results. Nestle (Overweight: PT CHF86.67 Upside 14.8%) Dismissal of CEO. Datalex (De-listing) Further details on delisting Regulatory News | Datalex. Dalata (De-listing) Recap on H1 results and further information on acquisition.
- Debt: Bond yields finished 2/3 basis points higher yesterday in thin liquidity given the US Labour Day holiday. The long end continues to suffer with 30-year yields hitting multi-year highs.
- Macro Equity markets had a negative day yesterday with the S&P500 -0.69% and the Nasdaq -0.82% on their return to trading post Labour Day, amid rising Treasury yields and mounting uncertainty around the Federal Reserve and US trade policy. Europe faced a steeper decline down -1.5%. In the US, three sectors were in positive territory with 67% of stocks ending lower. Energy was the best performer (+0.23%), while Consumer Staples (+0.7%) and Health Care (+0.7%) stayed positive suggesting defensive positioning as we enter equity markets’ weakest month historically. The worst performing sectors were Real Estate (-1.74%) and Industrials (-1.06%) due to concerns about higher borrowing costs and slowing global growth. The biggest drag on the S&P was its 33% constituent, Information Technology (-0.97%) due to the sector’s sensitivity to the pressure rising yields put on growth stocks as well as China dependency risks. Alphabet was up +7% post market after a federal judge ruled in Google’s antitrust case that the company is not required to sell its Chrome web browser and is not barred from paying for browser placement, an arrangement it currently has with Apple (+3% post market). In European markets, ten of eleven sectors were negative, with Energy finishing flat. Similar to the US, Real Estate (-3.44%), Information Technology (-2.88%), and Industrials (-2.21%) were the worst performers. There were some positives however, with Luxury stocks LVMH (+1.85%) and Kering (+3.83%) higher. In macro news yesterday in Europe, Eurozone CPI increased 2.1% y/y in August vs 2% in July. Core CPI was unchanged at 2.3% and services inflation reduced from 3.2% to 3.1%. Services inflation is expected to fall further this year as wage growth slows, potentially enabling another rate cut in December. In the US, ISM Manufacturing contracted in August for a sixth successive month, albeit rising to 48.7 from 48, slightly less than the expected 49. New Orders improved, returning to expansion at 51.4, however production, exports, and employment continue to shrink signalling persistent challenges due to tariffs, higher costs, and weak demand. Economic releases today include US MBA Mortgage Applications, JOLTS Job Openings, Factory Openings, Durable Goods Orders and the Fed’s Beige Book. Eurozone and UK PMIs will be released this morning.
- Stocks: Carin Homes: (Overweight: PT €2.41, Upside 11.8%) Review of H1 results, with positive guidance change. Glanbia: (Overweight: PT €16.50, Upside 14.7%) We raise the PT following a meeting with the company and review of estimates.
- Debt: The selloff at the long end of bond markets continued apace yesterday as US investors returned from their long weekend.
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