- Market Round Up: Global equities traded higher overall yesterday with noticeable strength recorded in US tech (+1.6%). The S&P500 climbed 0.5%, the Nasdaq moved 0.9% higher whilst the Eurostoxx600 gained 0.7%.Novo Nordisk rose 5.3% after US competitor Him & Hers Health said it would stop selling its copycat Wegovy drug. Novo also confirmed that it would be suing Him & Her’s Health over copyright infringement. Alphabet is set to raise $15bn from a seven-part US high-grade dollar bond sale, to help its aggressive CAPEX spend on data centres, which supported a rally in chip stocks. There was little to no macro prints yesterday but from a political standpoint UK Prime Minister Sir Keir Stamer resisted calls from Scottish Labour leader Anas Sarwar to step down, after two of the Prime Ministers staff, Chief of Staff Morgan McSweeney and Director of Communications Tim Allan both resigned over mounting pressure relating to the 2024 appointment of Peter Mandelson. Japanese stocks reached record highs (+2.3%) yesterday after PM Sanae Takaichi secured a commanding election win. Asian equity markets have continued yesterday’s rally, led by tech stocks. Japanese equities are trading 2.0% higher, led by Softbank (+10.5%), Hong Kong is up 0.4% and Mainland China is up 0.1%. The Chinese Yuan surged to its highest level against the US Dollar since May 2023 after the government encouraged banks to limit their holding of US treasuries.
- Day Ahead and Market Drivers: Equities: It’s another light day on the macro front today. In the US, we will have Retail Sales for the month of December alongside an update for the Import Price Index. On the domestic front, the AIB Construction PMI Index will be updated for January, which, if positive may have a good read through for the likes of Cairn Homes, Kingspan and Grafton Group. Looking at earnings today, starting in the US Coca Cola will post its Q4 results, as will Robinhood Markets, AIG and Ford. Across Europe we have results from Kering, BP, Barclays, Ferrari and AstraZeneca.
- Stocks in focus:Barclays (Overweight PT £5.20, +10% Upside) – Commentary post Q4 and FY25 results, and increase in PT from £4.25 to £5.20.
- Bonds: US treasury yields fell on Monday after National Economic Council Director, Kevin Hassett stated that lower US job numbers can be expected in the months ahead. UK gilts and the pound struggled over political concerns whilst the opposite was true for Japanese bonds with the 30-year stabilising around 3.9%.On the auction side today, the US will look to sell $86bn in 6-week bills alongside $58bn in 3-year notes at a 3.625% coupon. Germany will also look to issue two sets of €5bn 5-year bonds. Central bank speakers today include the Fed’s Hammack and Logan.
- Commodities: Gold broke across $5k yesterday after a turbulent fortnight. The precious metal gained 1.9% ($5,057) over the day (+5.8% over two days). Traders have since looked to cash in profits as it is trading down -0.4% this morning. Silver also rallied strong yesterday, up 6.9% before slipping 1.0% this morning. In energy markets, WTI gained 1.3% yesterday after tensions between the US and Iran ticked higher. The US Department of Transportation advised ships to stay clear of Iranian waters in the Strait of Hormuz, reviving a risk premium. WTI is currently flat this morning.
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