• Equity Markets: Global equities sold off aggressively yesterday as lofty tech valuations and uncertainty regarding potential Fed rate cuts prompted investors to take profits. The S&P 500 fell 1.7%, the Nasdaq dropped 2.3%, while European stocks declined 0.6%. In the U.S., ten of eleven sectors were negative, with only 25.8% of stocks higher on the day. Energy (+0.3%) was the sole positive sector, while Consumer Discretionary (-2.7%) and Information Technology (-2.4%) were the weakest performers. Robinhood Markets fell 8.6% after failing in its bid to block a Massachusetts state gambling law. On the positive side, Cisco shares rose 4.6% after reporting solid earnings supported by AI-driven demand. In Europe, ten of eleven sectors were also negative, with 38.5% of stocks higher on the day. Real Estate (+0.2%) was the only positive sector, while Industrials (-1.7%) and Consumer Discretionary (-0.8%) were the weakest. 3i Group (-17.4%), the private equity firm, experienced a sharp decline despite posting “excellent” results, after issuing a cautious outlook.
• Macro: In macro news, following the end of the U.S. government shutdown, it was announced that President Trump is readying substantial tariff cuts aimed at addressing high food prices. In the UK, preliminary Q3 GDP came in weaker than expected at 0.1% (est. 0.2%), taking the YoY rate to 1.3% (est. 1.4%). Following the miss, confidence is growing that Chancellor Rachel Reeves may consider a U-turn on raising headline tax rates in the upcoming budget. UK Industrial Production for September fell 2.0% (est. -0.2%), while Manufacturing Production dropped 1.7% (est. -0.3%). Irish CPI for October came in at 2.8%. From the Fed, Musalem said that officials should move more cautiously on rates, given inflation remains above target. Hammack noted that policy should stay “somewhat restrictive.”
• Economic releases today include U.S. Retail Sales for October will be published today, with survey estimates at -0.2%. At the same time, PPI Final Demand for October will also be released, with estimates of 0.2% MoM.
• Stocks: Allianz: (Neutral TP €339, c. 6% downside): Update following release of strong Q3 results, with PT increase to €339. Ryanair: (Overweight TP €29.50 c. 9% Upside): Details of a positive meeting with the company following Q2 results. Supermarket Income REIT: (Overweight PT 90p 12% Upside): Brief note on 20 store acquisition from Carrefour in France.
• Debt: Treasuries fell, and traders pulled back on bets that the Federal Reserve is set to bring down interest rates next month as policymakers cautioned against further reductions.

Opportunities this week:

• We are reiterating our BUY rating on Nike after recent pullback and ahead of a busy Summer of events for the brand. (BUY PT:$112)
• With de-stocking headwinds largely in the rear view for Kerry Group, we are reiterating our BUY rating on the stock. (BUY PT: €92)
• Following a week when Apple dominated the headlines due to the launch of its Apple Intelligence. We believe it is worthy reiterating our BUY recommendation on Microsoft as we expect them to continue playing a leading role in the wider adoption of AI. (BUY PT: $479)