• Macro: Equity markets were positive yesterday, recovering from Friday’s fall as investors positioned themselves ahead of a likely Fed rate cut next week. The S&P500 was up +0.21%, the Nasdaq +0.45%. Europe was up +0.51%. In the US, five sectors were positive and 48% of stocks ended higher, with money flowing from defensive sectors back to growth stocks. Information Technology (+0.67%) and Consumer Discretionary (+0.53%) were the best performers, while Real Estate (-0.68%) and Utilities (-1.07%) were weakest. Broadcom continued its rally from Friday’s 9.4% gain, finishing up +4.3%. This comes after last week’s strong earnings and news of a $10b AI chip order from a new client, reported to be OpenAI. In Europe, seven of eleven sectors were in positive territory, and 67% of stocks ended higher. Technology (+1.51%) and Industrials (+1.38%) were best, with Health Care (-0.73%) and Communication Services (-1.15%) worst. ASML increased +2.5% on news it will become the largest shareholder in French startup Mistral AI after taking a €1.3bn stake In macro news yesterday, French President Emmanuel Macron will have to appoint a fifth prime minister in less than two years. Francois Bayrou will resign following a vote of no confidence on Monday, after failing to win support for his plans to cut the public deficit which reached 5.8% of GDP last year, almost double the EU’s 3% limit. In Germany, industrial output increased +1.3% in July, the first increase since March, however headwinds remain from US tariffs and weak domestic demand. In macro news today, in the US, a large downward revision to the March jobs count is expected, solidifying Fed rate cut expectations. The Bureau of Labour Statistics will release revisions potentially reducing payroll gains by as much as 800,000 for the 12-month period ending in March of this year. A rate cut of 25bps is currently projected with 90% probability. From the central bankers we will hear from the BoE’s Breeden.
• Stocks: Kerry Group: (Overweight PT €111.69 Upside 41%). Summary of meeting with IR to discuss H1 results and outlook. . Datalex: (De-listing) EGM approved delisting, ahead of 11th September, which is its last day on the Euronext Dublin
• Debt: Core bond yields declined a couple of basis points yesterday, following Friday’s rally, and ahead of an expected sizeable downward revision to non-farm payrolls data to March 2025.

Opportunities this week:

• The recent selloff in Kingspan’s shares has the stock trading near a YTD low, providing an attractive entry point for investors looking to add exposure to the name. (BUY PT: €93)
• Over the past couple of months Dalata has made a number of positive moves, including communicating management’s 2030 vision to the market, adding capacity in Dublin, and a pipeline addition in London. (BUY PT: €5.40)
• Last week DCC announced a shift in its strategy, resulting in a planned transition to a more streamlined business that will be fully focused on the energy sector. (BUY PT: £71)