- Market Round Up: Global equity markets pushed higher yesterday, spurred on by tech stocks, in particular semiconductors after TSMC released strong quarterly results and guidance, coupled with aggressive capex spending to meet AI related demand needs. The S&P500 edged up 0.3%, the Nasdaq rose 0.3%, whilst the Eurostoxx 600 climbed 0.5%. US banks, namely Morgan Stanley (+5.8%) and Goldman Sachs (+4.6%) reported solid quarterly numbers with the former generating $785m (Est $634m) in fixed income underwriting whilst the latter raised its quarterly dividend by 12.5% to $4.50, with CEO David Soloman stating the bank would “remain dynamic” in relation to share buybacks. Initial jobless claims in the US for the week ended 10th January came in at 198k, slightly lower than the 215k estimated. In Asian markets this morning, it has been a relatively weaker start to the day with Japan down 0.3%, Hong Kong down 0.5% and China down 0.4. Weak sentiment this morning in China has been mainly driven by the government’s focus on clamping down on high frequency trading. The yen also started the day stronger, gaining 0.1% after Japan’s finance minister stated she was concerned about the currency’s weakness.
- Day Ahead and Market Drivers: Equities: It is a relatively quiet day on the macro side today. Earlier this morning German final CPI for December came in at 1.8%, in line with estimates. Later this afternoon US industrial production for the month of December will be updated with estimates of 0.1% MoM growth. On the earnings side, the biggest name to look out for today is State Street in the US, with the global investment and trustee firm set to release its Q4 results.
- Stocks in focus:IRES (Overweight PT €1.26 +31% Upside): Comment on recent CFO appointment.Rio Tinto (Neutral, PT 6120p 5% downside): Commentary on recent deals with Amazon AWS and BHP
- Bonds: Global bond markets have continued the strong start to the year, in particular across Europe given how much supply has come on board. European yields were flat yesterday whilst UK gilts have continued to outperform despite the 10-year note rising by 5bps yesterday. On the auction side today, the UK will offer c.£4bn in 90- and 180-day bills.From central bank speakers we have the ECB’s Escriva, as well as the Fed’s
Bowman and Jefferson. - Commodities: In the commodities space, gold dipped 0.4%, partially due to bullish equity sentiment whilst WTI fell 4.6% to $59.0 after the US confirmed it would hold off attacks against Iran for now, which if they had occurred would have led to disruptions across oil shipping and production
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