Research Archive

Market Round Up: Global equities sold off yesterday as tech stocks struggled to regain momentum after several days on the decline. More defensive sectors such as Staples (+2.6% in Europe) and Energy (+2.3% in US) outperformed. The S&P500 -0.5% the Nasdaq -1.5% and the Eurostoxx was flat.After the market closed, Alphabet released its quarterly results with sales topping expectations driven by a 48% jump in cloud revenue to $17.7bn. However, the stock fluctuated in the aftermarket (-0.4%) after the company confirmed capex spend for FY26 is to hit $120bn (Est. $97bn) on AI spending. Eli Lilly shares rallied 11% after the pharma giant’s sales forecast topped analysts’ expectations. Despite posting record revenue, AMD shares declined 17% after the company’s sales forecast underwhelmed Wall Street. On the macro side yesterday, US MBA Mortgage Applications for the week ended 30th January fell by 8.9%, after a drop of 8.5% the previous week. The ADP Employment Change for January came in at 22k (Est. 45k). Preliminary MoM CPI for the month of January in the Eurozone came in line with expectations at -0.5% Asian markets have continued yesterday’s decline with Japan down -0.1%, Hong Kong 0.4% lower and China down 0.5%. The main pain has been in the tech sector, falling for the fifth day out of six. The Kospi index, which tracks AI investments led the overall drop, down 3.5% today

Day Ahead and Market Drivers: Equities: Looking at the macro, the focus today will be on the Bank of England and ECB interest rate call. For the BOE the market is pricing in no rate cut, keeping the base at 3.75%. In Europe the refinancing rate is also expected to stay at 2.15% whilst the facility rate will stay at 2.0%. Staying in Europe, French Industrial Production for December (Est +0.2%) and German Factory Orders for December (Est. -2.2%) will be published. In the US, Initial Jobless Claims for the week ended 31st January will also be published. Survey estimates suggest 212k of claims. Looking at earnings today, Shell have posted its results. In the US, the key print today will be Amazons Q4 results. Other names to look out for include Estee Lauder, Microchip Technology, Fortinet and KKR.

Stocks in focus: Shell: (Overweight, PT 3200p, 11% upside) – Q4 Results summary.

Bonds: Bonds traded solid yesterday as macro data supported yields. The German 10-year yield pulled back 3bps to 2.86% whilst similar drops occurred in Irish, Spanish and Italian markets. The US 10-year moved 1bp higher to 4.27%. From an auction perspective, France and the US are in focus with the former looking to issue €50.1bn, 3.2% 2035 notes and €29bn 3.5%, 2035 notes. In the US two auctions of $80bn and $69bn 4-week and 8-week bills will be issued. Post the ECB’s rate decision, President Lagarde will hold a press conference. The Fed’s Bostic will also speak today.

Commodities: Gold gained slightly yesterday, climbing 0.4% as risk off sentiment pushed the precious metal higher. However those gains have been wiped out this morning with the precious metal down 0.8%, having previously fell as much as 3.5% in early trading. Silver gained 3.8% yesterday but also pulled back aggressively this morning, falling as much as 17%, currently trading -11.8% weaker, wiping out the two previous day gains. WTI gained 0.9% yesterday but has erased those gains this morning, down 0.8% to $63.83.