• Equity Markets: Equity markets ended slightly negative yesterday with market reaction muted following the Fed rate decision to cut 25bps. The S&P500 finished down -0.10%, and the Nasdaq fell -0.33%, Europe was down -0.03%. In the US, six of the eleven sectors were in positive territory and 57% of stocks ended higher. Financials (+0.96%) and Consumer Staples (+0.90%) were the best performers. IT (-0.70%) and Industrials (-0.45%) were weakest. Nvidia fell (-2.62%) as China’s internet regulator has instructed the nation’s largest tech firms to halt purchases of Nvidia AI chips and cancel any current orders. In Europe, five of the eleven sectors were positive, with 48% of stocks ending higher. IT (+1.39%) and Health Care (+0.54%) were strongest, while Energy (-0.99%) and Materials (-0.66%) were weakest.

• Macro: Yesterday the Fed cut the Federal Funds Rate target range by 25 basis points in line with expectations, marking the first reduction since December ‘24. The central bank recognises a slowdown in the labour market and indicated that it will stay guided by incoming data, while monitoring inflation risks. Policymakers are now anticipating two more quarter-point rate cuts this year, whilst expecting slightly higher inflation next year, and have modestly raised their median growth forecast for 2026. US, MBA mortgage applications rose 29.7% over the week, after rising +9.2% in prior week as US mortgage rates fell to the lowest level in nearly a year. U.S. housing starts on the other hand declined by -8.5% (-4.4% est.) last month to their lowest level since May, as an oversupply of homes dampened builders' enthusiasm to increase production.
• Economic releases today in Europe include the BOE’s interest rate decision, which is expected to remain steady at 4.0%, while in the US, we have Initial Jobless Claims and the Conference Board leading economic index.
• Stocks: Nestle: (Overweight PT CHF86.67 Upside 21%) Nestle announced that its long-standing chairman Paul Bulcke, will step down following the recent firing of its CEO. He is being replaced by former Inditex chairman Pablo Isla. Supermarket Income REIT: (Overweight PT 90p Upside 14.5%) SUPR reported a solid set of FY earnings following a year of strategic corporate changes and portfolio enhancements.
• Debt: The Fed cut rates by 25bps but pushed back against talk about more aggressive easing going forward. The US 10 Year yield jumped 6bps as a result. The new dot plot now prices in a further 50bps of cuts between now and the end of the year.

• Asset Allocation
• Focus Feature: Paschal Donohoe on What's Next for Ireland. We hosted an exclusive sit-down conversation with then Minister for Finance, Paschal Donohoe, at our Dublin offices in November, in which the Minister shared his valuable insights with Finance Correspondent for The Currency, Sean Keyes.
• Analyst Conviction List: The investment case for our preferred names
• The Fund Edit: Latest update on our range of investment funds, ETFs and trusts
• Ethical Investing: Green Effects providing sustainable investment returns
• Corporate Finance News: Head of Corporate Finance, Conor McKeon, reviews a year of successful exits & provides a look forward to 2023

Opportunities this week:

• Cairn last week provided an upbeat trading statement for its first half of the year, we retain our Overweight rating on the stock and our target price to €2.41 (c. 11% upside).
• Following a busy week of low-key announcements and given uncertainties in the pharmaceuticals sector, we are revising our price target on GSK from 2010p to 1820p.
• Last week Kingspan shares traded slightly higher to €71.95 (+1.48%) despite negative market news related to the Grenfell Tower Investigation. We reiterate our overweight recommendation and target price of €88.00.