- Equity Markets: Global equities delivered mixed performance yesterday, with the U.S. declining while European indices advanced, buoyed by strong Q3 earnings reports. The S&P 500 fell by -0.63%, the Nasdaq declined -0.47%, whereas European equities rose +0.69. In the U.S., only one sector ended the day in positive territory, with just 26.8% of stocks posting gains. Information Technology (+0.13%) was the sole sector in the green. Financials (-2.75%) and Energy (-1.12%) were the weakest performers. Select semiconductor stocks such as Micron (+5.5%) and ON Semiconductor Corp (+5.2%) showed resilience despite growing concerns over a potential AI-driven market bubble. Conversely, Hewlett Packard shares dropped -10.1% following a downward revision to its annual profit forecast, attributed to margin pressures. European markets saw broader strength, with nine out of eleven sectors posting gains and 63% of companies closing higher. Consumer Staples (+3.0%) and Industrials (+1.1%) were the strongest, while Financials (-0.2%) and Energy (-0.1%) were the weakest. Nestlé surged +9.3% after reporting a return to positive volume growth and announcing an acceleration of its cost-cutting initiatives.
- Macro: On the macroeconomic front yesterday, French Prime Minister Lecornu survived two no-confidence votes, reinforcing some political stability. The CAC 40 responded positively, gaining 1.4% on the day. In the UK, industrial production rose modestly in August, up 0.4% MoM (vs. est. 0.2%), recovering from a -0.9% decline in July. Manufacturing output increased by 0.7% MoM. In the U.S., the Philadelphia Fed Business Outlook for October came in at -12.8 (vs. est. 10.0), a sharp reversal from the September reading of 23.2. Additionally, President Trump confirmed plans to meet President Putin within the next two weeks to discuss a potential resolution to the Ukraine conflict, following a reportedly productive two-hour call.Looking ahead today, market participants will focus on final September CPI data for the Eurozone, with expectations for a stable reading of 0.1% MoM and 2.2% YoY. In the U.S., September Housing Starts are anticipated at 1,320K, up from 1,307K in August. Preliminary Building Permits data for September is also scheduled for release.
- Stocks:
- Diageo: (Overweight PT 2,370p 32% upside): Update ahead of Q1 earnings on 6th November. Novo Nordisk: (Overweight PT DKK489: 33.6% upside): Update relating to President Trump’s comments on drug prices in the US, in particular Ozempic.
- Debt: Classic “Flight to Quality” bid in bond markets (although one must increasingly use those words lightly) as US Treasuries power through the 4% level.
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