• Macro: Equity markets had a negative day yesterday with the S&P500 -0.69% and the Nasdaq -0.82% on their return to trading post Labour Day, amid rising Treasury yields and mounting uncertainty around the Federal Reserve and US trade policy. Europe faced a steeper decline down -1.5%. In the US, three sectors were in positive territory with 67% of stocks ending lower. Energy was the best performer (+0.23%), while Consumer Staples (+0.7%) and Health Care (+0.7%) stayed positive suggesting defensive positioning as we enter equity markets’ weakest month historically. The worst performing sectors were Real Estate (-1.74%) and Industrials (-1.06%) due to concerns about higher borrowing costs and slowing global growth. The biggest drag on the S&P was its 33% constituent, Information Technology (-0.97%) due to the sector’s sensitivity to the pressure rising yields put on growth stocks as well as China dependency risks. Alphabet was up +7% post market after a federal judge ruled in Google’s antitrust case that the company is not required to sell its Chrome web browser and is not barred from paying for browser placement, an arrangement it currently has with Apple (+3% post market). In European markets, ten of eleven sectors were negative, with Energy finishing flat. Similar to the US, Real Estate (-3.44%), Information Technology (-2.88%), and Industrials (-2.21%) were the worst performers. There were some positives however, with Luxury stocks LVMH (+1.85%) and Kering (+3.83%) higher. In macro news yesterday in Europe, Eurozone CPI increased 2.1% y/y in August vs 2% in July. Core CPI was unchanged at 2.3% and services inflation reduced from 3.2% to 3.1%. Services inflation is expected to fall further this year as wage growth slows, potentially enabling another rate cut in December. In the US, ISM Manufacturing contracted in August for a sixth successive month, albeit rising to 48.7 from 48, slightly less than the expected 49. New Orders improved, returning to expansion at 51.4, however production, exports, and employment continue to shrink signalling persistent challenges due to tariffs, higher costs, and weak demand. Economic releases today include US MBA Mortgage Applications, JOLTS Job Openings, Factory Openings, Durable Goods Orders and the Fed’s Beige Book. Eurozone and UK PMIs will be released this morning.
• Stocks: Carin Homes: (Overweight: PT €2.41, Upside 11.8%) Review of H1 results, with positive guidance change. Glanbia: (Overweight: PT €16.50, Upside 14.7%) We raise the PT following a meeting with the company and review of estimates.
• Debt: The selloff at the long end of bond markets continued apace yesterday as US investors returned from their long weekend.

Opportunities this week:

• Ahead of AIB’s AGM on the 1st of May, there is some concern that the €1.2bn Directed Buyback that was announced on the 31st March 2025 may not happen. (OVERWEIGHT PT: €6.50)
• Last week Supermarket Income REIT made progress on its strategic initiatives, showing a willingness and ability to actively manage its portfolio and recycle its capital, this time though a joint venture aimed of enhancing its earnings profile. (OVERWEIGHT PT: 88p)
• Given the considerable uncertainty that increased protectionist trade policies present for Volkswagen’s earnings outlook, along the recent competition and demand issues, we have decided to drop coverage on the stock.