- Equity Markets: Global equities had a mixed day yesterday with strength in Europe off the back of resilient earnings but weakness in US tech. The S&P500 finished the day flat, the Nasdaq dropped -0.16% whilst European stocks rose +0.21%. In the US, three of eleven sectors were positive with 59% of stocks up on the day. Consumer Discretionary (+1.32%) and Industrials (+0.88%) were the strongest. Utilities (-0.99%) and Communication Services (-0.85%) were the weakest. Precious metal companies linked to gold had a particularly rough day with Newmont Corp dropping -9.0% after the aggressive gold sell off. On the flip side General Motors jumped +14.8% after the automaker reported better than expected Q3 earnings on profit of $3.1bn (est $2.7bn). In Europe, eight of eleven sectors were positive with 63% of stocks finishing higher on the day. Real Estate (+1.26%) and Consumer Discretionary (+0.71%) were the strongest. Materials (-0.64%) and Consumer Staples (-0.57%) were the weakest. Edenred SE, the payment solutions platform saw its shares rise +19.6% after the company announced solid earnings beat and a strong FY25 outlook of organic EBITDA above 10% and at least €1.34bn (est €1.33bn).
- Macro: In macro news yesterday, the US and Australia signed a deal relating to rare earth metals and other critical minerals with both countries investing to boost production of commodities. Prime Minister Anthony Albanese confirmed that $8.5bn worth of projects were already in the pipeline. The deal will help reduce the US’s dependency on Chinese rare earth imports. Trump also commented that he expects a positive upcoming meeting with his Chinese counterpart Xi Jinping and that it would yield a “good deal” on trade. However, in the same announcement Trump acknowledged that the meeting may not happen. This morning the UK’s September CPI came in flat (est 0.1%), taking the headline annualised rate to 3.8% (est 4.0%) and the core rate to 3.5% (est 3.7%). In relation to macro announcements today, MBA Mortgage Applications for the week ended 17th October are scheduled to be released. From central bankers we have the ECB’s Guindos and Lagarde speaking today.
- Stocks: Novo Nordisk: (Overweight. PT: DKK489 37.8% upside): Details of EGM announcement and proposed new Chair/Vice Chair/board members by Novo Nordisk Foundation. Barclays: (Overweight. PT £4.25: c. 16% upside): Update regarding Q3 results and upgrade to Overweight with new price target of £4.25 (from £3.70). L’Oreal: (Neutral. PT:€415, C.4% upside): Update regarding muted Q3 results.
- Debt: The European bond markets were stable yesterday with price action very muted within tight ranges. Bonds had a good day yesterday with yields lower across the curve. US Treasuries still feel comfortable sub 4%.
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