• Equity Markets: Equity markets ended negatively yesterday as investors look for new catalysts amid risks of a weakening job market and stubborn inflation. The S&P500 finished down -0.28%, and the Nasdaq fell -0.37%, Europe was down -0.19%. In the US, four of the eleven sectors were in positive territory and 43% of stocks ended higher. Energy (+1.23%) and Utilities (+0.73%) were the best performers. Materials (-1.59%) and Real Estate (-1.01%) were weakest. Micron Technology fell (-2.82%) as the company’s forecast underwhelmed investors, despite its better than expected first quarter revenue and profit estimates. In Europe, four of the eleven sectors were positive, with 38% of stocks ending higher. Energy (+1.48%) and Utilities (+0.61%) were strongest, while Consumer Discretionary (-0.90%) and Health Care (-0.73%) were weakest. LVMH fell (-2.69%) yesterday, after a broker mentioned that its third-quarter revenue forecast for LVMH is 2% below the market consensus and that it has also cut its full-year outlook for the luxury goods company.
• Macro: In economic news out of Europe yesterday, the IFO business climate index fell to 87.7 in September from a revised 88.9 in August, coming in below estimates of 89.4. supporting the view that higher U.S. tariffs are putting pressure on Germany’s economy. This morning, Germany’s Consumer Confidence came in at -22.3 (vs -23.3 est.). In the US, MBA mortgage applications rose for the third consecutive week to (+0.6%), after rising (+29.7%) in prior week. U.S. new-home sales jumped 20.5% to 800k (650k est.) in August to their highest level since early 2022, fuelled in part by builder's discounts and buyer incentives. For economic releases today, in the US we have Initial Jobless Claims, Durable Goods Orders and Existing Home Sales. From the central bankers, we will hear from the Fed’s Goolsbee, Williams, Schmid, Bowman, Barr, Logan and Daly as well as the ECB’s Kazimir.
• Stocks: Cairn Homes: (Overweight PT: €2.46: 27% Upside): Glenveagh / Cairn Homes H1 results read across. PayPal (Overweight PT: $97: 44% Upside): Details relating to a two-year agreement with Blue Owl Capital. Nestle (Overweight PT: CHF88.67: 24% Upside): Update on the strategic review of Vitamins business segment. TotalEnergies (Overweight PT:€62: 16% Upside): TotalEnergies has been chosen by the French government to operate the “Centre Manche 2” offshore wind farm.
• Debt: Despite a weaker than expected German IFO yesterday morning European bonds remain in a tight range with 10-year Bunds stuck around 2.75%.

Opportunities this week:

• Last week we met with the investor relations team of DCC to discuss its planned strategic change to focus on its Energy division. We believe its singular focus on a faster growing/higher return segment will serve investors well. BUY PT: £71.40
• Following our meeting with the IR team of UK peer Entain last week, who signalled the pipeline for US states to regulate gambling is light for 2025, we are removing Flutter from our Analyst Conviction List. We retain our BUY rating, PT: $300.
• We had a very positive meeting with the investor relations team from Smurfit Westrock last week which served to boost our conviction in the opportunity it has to improve the legacy Westrock business. BUY PT: $61.