• Equity Market: Global equity markets had a mixed day yesterday with the US down and Europe up. The S&P500 fell -0.55%, and the Nasdaq dropped -0.95% after Fed chairman Powell offered little hint of an October rate cut. European stocks climbed +0.28%. In the US six of eleven sectors were positive with 55.3% of stocks up on the day. Energy (+1.71%) and Real Estate (+0.81%) were the strongest. Consumer Discretionary (-1.44%) and Information Technology (-1.14%) were the weakest. Generac Holdings, a manufacturer of backup generation products for residential, commercial, and industrial markets saw its share price fall -10.3% after a law firm opened an investigation into the business on behalf of shareholders, relating to potential corporate wrongdoings of officers and/or directors. In Europe ten of twelve sectors were positive with 62.3% of companies ending higher on the day. Energy (+1.53%) and Consumer Discretionary (+1.44%) were the strongest. Healthcare (-1.15%) and Communication Services (-0.33%) were the weakest. Kingfisher (+14.63%) had a noticeably strong day after its H1 results surpassed analysts' expectations, with management raising guidance whilst also accelerating the company’s share buyback program.

• Macro: In macro news yesterday global manufacturing data came in weaker across the board. Manufacturing PMI for September in France was 48.1 (Est. 50.1), in Germany 48.5 (Est. 50.0), in the Eurozone 49.5 (Est. 50.7), in the UK 46.2 (Est 47.1) and in the US 52.0 (Est 52.2). In the US, Fed chairman Powell said the outlook for the labour market and inflation both face risks, acknowledging that Fed policymakers still face a challenge with further rate cuts, in particular in October, therefore the Fed needs to moderate policy towards a more balanced approach. Estimates still price in a 92% probability of a rate cut at the October meeting.In macro news today, it’s a relatively quiet day however in Europe where the focus will be on the German IFO Business Climate data. Survey estimates for September expect a rise from 89.0 to 89.4. In the US, MBA Mortgage Applications for the week ended 19th September will be released. Last week’s saw a sharp 29.7% rise week on week. Additionally, August New Home Sales will be updated with the current estimate at 650k, versus July results of 652k. From central bank speakers the Bank of England’s Green will be speaking later this evening followed by the Fed’s Daly.

• Debt: European bond markets remain range-bound with Bunds oscillating around 2.75% and spreads very contained.

Opportunities this week:

• We are reiterating our BUY rating on Deere as we believe that near-term consensus earnings estimates for the company are too conservative and that the long-term tailwinds for the business are not reflected in its discounted valuation.
• Last week, we issued an updated research note on Grafton Group, reiterating our BUY rating with an unchanged price target of £11.50, which provides 24% for investors.
• Following the stock’s poor performance last week (-5.4%) and ahead of its Q3 numbers that will be released on 25th April (Thursday) we are highlighting our Buy recommendation on Microsoft.