• Equity Markets: Equity markets had a soft day yesterday with the S&P500 down -0.35% and the Nasdaq -0.14%, as investors were wary ahead of the Fed’s rate decision. Europe was also off slightly at -0.07%.  In the US, only one sector was in positive territory and only 31.2% of stocks ended higher. IT and Industrials were best. Communication Services and Materials were weakest. Investors continue to react negatively to Netflix’s (-3.4%) bid for Warner Bros Discovery (+4.4%). Whilst Semis was a bright spot with Nvidia up +1.7% and Micron up +4.1%, leading the SOX Semiconductor Index up 1.1%. In Europe, five of eleven sectors were in positive territory, with Industrials and Financials best, whilst Real Estate and Consumer Discretionary were weakest. Semi manufacturing company ASM International rose 6.9% as a large international investment bank added it to its Top Pick list.
• Macro: In Europe, German industrial production rose significantly more than expected in October +0.8% YoY, versus the -0.4% expected and the -1.4% previous reading. For the EU the Sentix Investor Confidence index for December, improved slightly to -6.2 from -7.4. This morning, we had the BRC Sale Like for Like data from the UK for November at +1.2% YoY, below the 2.5% estimate, Ireland’s Construction PMI for November declined to 46.7% from 48.1% and from Germany, its Trade Balance data for October was €16.9bn above €15.7bn est and €15.3bn previously as a result of weaker imports rather than strong exports. In the US, the NY Fed’s 1-Yr Inflation Expectation level remains above the 2% target at 3.2%.Economic releases today from the US are the NFIB Small Business Optimism Index (Nov), and more importantly the JOLTS Job Openings (Oct est. 7115K).
• Stocks: TotalEnergies: (Overweight PT €65.0,+15% Upside): Switching to dual listing in New York as well as consolidation in the North Sea Oil and Gas sector. L’Oreal (Overweight, PT €415, +13.5% Upside): Recent acquisition of a further 10% in Galderma Group AG.
• Debt: Bond yields headed higher from the get-go yesterday as a combination of higher JGB yields, hawkish Schnabel comments and stronger German Industrial Production data weighed on prices.

Opportunities this week:

• Last week, Shell held its bi-Annual Capital Markets Day. Given the positive change in guidance provided and the solid upside to our £32.30 price target we are adding the name to our Analyst Conviction List.
• More customer friendly results in the US for FanDuel, along the wider equity market selloff, has Flutter's shares down almost 20% over the past month. We reiterate our BUY rating on the stock, given there is now 28% upside to our $293 price target.
• Our meeting with CRH's IR team last week highlighted management's generally positive outlook for the year ahead, following this, and some recent weakness in the shares, we reiterate our Buy rating with an unchanged price target £87.50.