• Equity Markets: Equity markets moved lower yesterday as sentiment turned cautious and investors pulled back from riskier assets. S&P500 -0.53% and the Nasdaq -0.93%. Europe fell slightly less at -0.18%. In the US, four sectors were in positive territory with 39% of stocks ending higher. Energy (+1.32%) and Consumer Staples (+0.64%) were best, while Industrials (-1.31%) and Consumer Discretionary (-1.00%) were weakest. Netflix shares tumbled (-10.07%) to their lowest point since April 2022 as a tax dispute in Brazil dented Q3 earnings and fuelled investor worries regarding growth. In Europe, five of eleven sectors were in positive territory and 63% of stocks ended higher. Energy (+1.44%) and Real Estate (+1.20%) were best, while IT (-1.77%) and Industrials (-0.49%) were worst. L’Oréal shares fell (-6.72%) after the cosmetics giant reported third quarter like-for-like sales that missed lofty market expectations. Hermès declined (-2.27%) as a key leather goods division underperformed although Q3 sales growth remained strong across regions, with analysts pointing to the stocks stretched valuation. Novo Nordisk shares fell (-3.24%), extending Tuesday’s 1.4% decline, it announced plans to hold a shareholders’ meeting next month to elect new board members.
• Macro: In macro news yesterday, in Europe, the UK House Price Index YoY rose 3.0% (3.2% prior) for August and Ireland PPI for September fell -0.4% (0.0% prior) MoM and -2.6% (-3.0% prior) YoY. In the US, the MBA mortgage applications index fell 0.3%, after falling 1.8% in the prior week. Mortgage applications fell for the fourth consecutive week. From the ECB we had Lagarde, who emphasised that the European Union needs deeper integration of its fragmented financial markets, which are currently spread across hundreds of exchanges.
• Economic releases today include Eurozone Consumer Confidence and from the US Initial Jobless Claims and Existing Home Sales.
• Stocks: Flutter: (Overweight. PT: $293 c. 16% upside): Commentary relating to the acceleration in the prediction market sector.Apple: (Neutral. PT: $225 c. 13% downside): Update surrounding new regulatory challenges in both the UK and Europe. GSK: (Neutral. PT: 1660p 0.5% upside): Details on results from their INFRONT-3 clinical trial for latozinemab. Kerry Group (Overweight PT: €111.69 C.40% upside): Commentary following solid Q3 2025 results
• Debt:  Bond markets continue to trade resiliently despite the rally in oil after the latest round of US sanctions on Russian output, with UK Gilts being the big outperformer yesterday as yields fell following the better-than-expected UK inflation report.

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Risk assets endured a difficult week last week contending with an initial further move higher in global bond yields, hawkish comments from Federal Reserve Chairman Jerome Powell, and at the end of the week, weakness in the banking sector caused by uncertainty over the solvency position of US venture capital funding bank Silicon Valley Bank. The combination of all these factors resulted in average declines of circa 3.2% for global equity markets. In our recent Weekly Trader and Daily Note commentaries we have been highlighting the headwind that rising bond yields, as a result of a repricing higher for central bank terminal rates, were posing for risk assets. In the first part of last week this continued to be the case as core bond yields moved to multi-month highs. This move higher in yields continued to be driven by the recent higher-than-expected global inflation data, but was exacerbated by a more hawkish than expected tone from Fed Chair Jerome Powell during his semi-annual testimony to the US Senate Banking Committee. During his testimony, Chair Powell stated that the Fed is prepared to speed up the pace of rate increases if data indicates that a faster pace of tightening is warranted and that the ultimate level of interest rates may be higher than previously expected.