• Equity Markets:Equity markets had quiet day yesterday with the S&P500 +0.06% and the Nasdaq +0.39%, as news of strong IT demand offset continued government shut-down concerns. Meanwhile Europe rose +0.53%. In the US, four sectors were in positive territory and 55% of stocks ending higher. Materials and IT were best. Energy and Consumer Discretionary were weakest. Tesla fell -5% after reporting record sales that were already priced in. In Europe, six of the eleven sectors were in positive territory, with IT and Consumer Discretionary best, with Energy and Real Estate worst. The Semiconductor industry rose 4.1%, led by ASML (4.3%) and ASM International (+6.5%) as OpenAI and AI in general continue to drive positive demand outlooks.
• Macro: In macro news yesterday, in Europe, the EU Unemployment Rate was 6.3% in August (+0.1% from prior). In the US, Weekly Jobless Claims and Factory Orders were delayed due to the government shutdown, though the Challenger Job Cuts September YoY change was -25.8% vs +13.3% previously, more saliently, hiring plans were for 117K jobs in September, down 71% from a year earlier and hit the lowest point since 2011. From the central bankers, the Fed’s Logan said inflation is on its way back to 2% target, but there are risks, and the Fed needs to be very cautious about rate cuts. The ECB’s Kazaks said uncertainty remains very high, and that the current rate level is very appropriate. Economic releases today include French Industrial and Manufacturing Production (Aug), Final Services and Composite PMIs for Ireland, France, Germany, UK, US, and the Eurozone. Non-Farm Payrolls and Labour data may be released later, when the headline Payrolls number is expected to be 52K. After this the ISM Services data is released (Sept 51.7 est.). From the Central Bankers, today’s speakers include the BoJ’s Ueda, the BOE’s Bailey, the ECB’s Schnabel, Sleijpen, Wunsch & Lagarde. And from the Fed we have Williams, Logan and Jefferson
• Stocks: Kerry Group (Overweight PT:€111.69, 46% Upside): Key takeaways from yesterday’s onsite investor day in Naas.
• Debt: Bond markets were little changed yesterday, with Bunds remain trapped in the range with more concerns about a deteriorating US labour market protecting the downside.

Opportunities this week:

• Last week we met with the investor relations team of DCC to discuss its planned strategic change to focus on its Energy division. We believe its singular focus on a faster growing/higher return segment will serve investors well. BUY PT: £71.40
• Following our meeting with the IR team of UK peer Entain last week, who signalled the pipeline for US states to regulate gambling is light for 2025, we are removing Flutter from our Analyst Conviction List. We retain our BUY rating, PT: $300.
• We had a very positive meeting with the investor relations team from Smurfit Westrock last week which served to boost our conviction in the opportunity it has to improve the legacy Westrock business. BUY PT: $61.