• Market Round Up: Yesterday, equity markets were slightly subdued with the S&P up 0.16%, the Nasdaq up 0.26% and the Eurostoxx 600 up 0.21%. Concerns have been raised about Fed independence following the launch of a DoJ investigation into Fed Chair J. Powell. Google’s parent Alphabet rose on confirmation that Apple had chosen its Gemini AI model to power the next generation of Apple’s Siri voice assistant, thus cementing Google’s position in Generative AI. There were no outstanding moves in the US aftermarket for larger US stocks. Asian markets this morning are mixed with Tokyo 2.41% after its holiday, China down 0.60% and Hong Kong +0.80%. Japan rose on growing speculation that PM Sanae Takaichi may call a snap election to capitalise on her high public ratings. There were no outstanding moves in the US aftermarket for larger US stocks.Asian markets this morning are mixed with Tokyo 2.41% after its holiday, China down 0.60% and Hong Kong +0.80%. Japan rose on growing speculation that PM Sanae Takaichi may call a snap election to capitalise on her high public ratings.
• Day Ahead and Market Drivers: Equities: Yesterday’s Sentix Investor Confidence Index at -1.8, was better than the -5.0 expected. And this morning’s Irish Construction PMI was 48.4 vs 46.7 previously and continues to rise from the September low, which may augur well for Glenveagh’s sales release on Thursday.    Results season kicks off this morning with JP Morgan and BONY Mellon releasing Q4 results around midday. In the UK we have sales releases from Whitbread, Persimmon and Grafton which should help investors gauge the pulse of the UK investor in housing and leisure, especially following the weaker UK BRC sales data release this morning
• Stocks in focus: Grafton Group (Overweight PT £12.05, 31% Upside): update following the release of its Q4 sales release. Visa (Overweight PT $387, 12.8% upside): thoughts on Trump’s 10% credit card rate cap proposal.
• Diageo: (Overweight PT 2250p, 32% upside): initial view on the company’s Asian asset restructuring. Bonds: European bonds fell yesterday as the market digests €66bn of supply this week. Today we get further supply of shorter dated paper from Italy, Japan and the UK. German Industrial production rose 0.8% well above the -0.7% expected which may give the bond markets pause for thought, though exports from Germany remain weak at -2.5% in November. The NY Fed’s 1-year Inflation expectation continued to rise to 3.42% from 3.2% last month, potentially hampering rate cutting expectations. And Kashkari, who is a hawk will also be speaking, but any hawkish tone may be offset by Barkin, a centrist Fed member.
• Bonds: Eurozone bond yields declined slightly yesterday by 2~3bps, amid ECB rate cut expectations growing slightly on little economic news, but with the ECB’s Muller and Villeroy making the case for rate stability in the Eurozone. Fed member Williams sees favourable inflation, GDP and employment trends with the Fed being well positioned.It is a busy day for government bond auctions with longer dated bonds due from Italy, Germany, UK, Austria and the Netherlands, with short-dated paper due from Spain.   The key focus in the day ahead will be on US Core CPI for December which is expected to be 0.3% MoM and 2.7% YoY, with Services expected to remain the main driver of persistent inflation. Consumer earnings and the Housing Market will also be in focus with Average Weekly Earnings and New Home Sales (-10.6% MoM). Non-voter Fed member Musalem, who tends on the hawkish side, is speaking today, as is Barkin
• Commodities: Oil had a quiet day (+0.64%) as domestic politics took over, and this morning it is up a further 0.67%. Gold this morning is off slightly by -0.29% after a strong day (+1.95%) yesterday. Other metals resumed their recent rise with silver +7.2% and copper +1.6%.

Opportunities this week:

• This morning, Ryanair issued a solid set of results for the first half of FY25 in which second quarter operating profits declined by 2% YoY but beat consensus by 2%. (BUY PT: €19.50)
• Last week Grafton Group announced an acquisition in an attractive segment of the Spanish market and issued full year guidance ahead of consensus estimates. (BUY PT: £12.30)
• Last Wednesday, Microsoft reported its Q1 2025 results where it exceeded expectations with double-digit growth in revenue, operating profit, and EPS but reacted negatively to Q2 guidance. (BUY PT: $479)