The Week That Was

Global equities moved 1.1% higher last week in euro terms following a rally in the dollar tied to hawkish central bank messaging. The S&P 500 climbed 0.5% on the back of a strong rally in technology-related sectors.

European equities climbed 0.2% with travel & leisure stocks getting a boost from a US appeals court ruling that sports bets are not swaps.

Global bonds climbed 0.6% in euro terms, however, short-term US yields moved sharply higher on Friday following Fed Chair Warsh’s speech at Jackson Hole. Whilst this prompted some weakness in Gold, global commodities ended the week 0.7% higher on tightening supply conditions for copper and some agricultural commodities.

Summary Economic Releases

Source: Cantor Fitzgerald Ireland Research

The Week Ahead

Asian markets moved marginally lower this morning on geopolitical uncertainty and macro headwinds. China’s manufacturing PMI beat expectations but remained in contraction. The US will urge G20 finance ministers to reassess trade terms with China when they meet today amid its $1.2tn trade surplus. Brent spiked to $90.5 a barrel as the US struck Iranian rocket launchers in its first major military action in weeks. The euro firmed marginally against the dollar and Gold weakened.

Financial markets face another important week, with geo-political and macro developments likely to drive sentiment. In the US, ISM data for August is likely to indicate industrial activity continued to expand in the month of August, whilst labour market data is likely to point to a modest pick-up in hiring. Friday’s Payrolls data will take on additional importance following Kevin Warsh’s more hawkish message at Jackson Hole, with a resilient employment print above 54k potentially strengthening the case for further tightening. In Europe, core inflation for August is set to come in at 2.5% YoY and cement the case for a September ECB hike. Markets will also be sensitive to any US-Iran political developments alongside fresh polling data from Germany, where the AfD is currently on track to win its first state election on Sunday.

On the corporate side, Broadcom and Dell provide another important test of the durability of the AI investment cycle following a strong outlook from Nvidia’s guidance last week. Broadcom’s outlook for AI semiconductor revenues and custom accelerator demand will be closely scrutinised (modest/beat and raise FY28 guidance, Oct next catalyst), while Dell should provide a further read on enterprise demand for AI infrastructure. With expectations across the AI complex elevated, continued earnings delivery will be important in supporting valuations.

Domestically, Cairn reports interims on Wednesday, with investors focused on completions, margins and the demand outlook. Grafton’s HY26 results are on Thursday, with the market focused on growth in Ireland and Iberia, whilst the UK market is still expected to trade softly. The roadmap for the Government’s investment a/c will also garner attention today, as will NTMA bond issuance on Thursday.

This week’s developments should provide greater clarity on the policy outlook on both sides of the Atlantic. Whilst equity valuations have declined year to date and the macroeconomic backdrop remains supportive, this must be juxtaposed with the range of risks markets will have to navigate in the short term, including US midterms, German elections, French budget uncertainty and ongoing US-Iran tensions. As a result, increasingly balanced and diversified portfolio positioning is warranted to successfully navigate these risks.

Written by John Mullane, CIO, Cantor Fitzgerald Ireland

This is an extract from the Weekly Markets Report by Cantor Fitzgerald Ireland. For more detail on individual securities, or to discuss how we can support your investment needs, please get in touch.