Daily Note Archives

Market Round Up: Yesterday, markets were generally weaker again in the US with the S&P500 -1.23% and the Nasdaq continuing its weak run down -1.59%, as AI related stocks continued to pull back with the Software sector down 5%. In Europe the Eurostoxx 600 was also down -1.05%. The ECB and BoE held rates as expected. In the US the Challenger Job cuts data spiked up again to 108k job cuts, with almost 50% of the cuts from three companies: Amazon, UPS and Dow Inc. Also released on the Jobs front was the JOLTS Job Openings and Layoffs level for December, with openings falling MoM and below estimates and higher MoM and above estimates. Finally, regarding employment in the US Initial Jobless Claims rose MoM and more than expected in the week ending Jan 31st. Ireland’s unemployment rate held steady at 4.7% and the UK’s January Construction PMI rose to 46.4 from 40.1 well above expectations of 42, which may point to a better market for UK exposed Grafton Group and Kingspan. Overnight Amazon reported earnings that were solid and better than expected, but its guidance for Q1 EBIT was light versus consensus and a Capex guide of $200bn was well above market estimates, which continues the theme seen with Alphabet and Microsoft. The stock fell 11% in the aftermarket. This morning Asian markets are mixed with Tokyo up 1.3%, but Hong Kong and China are down 1.1% and -0.6% respectively. The Yen strengthened 0.2% ahead of Japan’s weekend’s general election.

Day Ahead and Market Drivers: Equities: On the macro front this morning’s German Industrial Production was weaker than expected at -0.6% vs 1.9% YoY estimated, and later today we get the University of Michigan Sentiment index for February where the expectation is for a lower level. On the results side it is relatively quiet with AerCap and Philip Morris reporting Q4 numbers.

Stocks in focus: Greencoat Renewables (Overweight, PT €0.99 44% upside) – Update from meeting with management. Rio Tinto (Neutral PT 6120p 10% downside) – No deal for Glencore and thoughts on Rio’s copper business.

Bonds: In Europe bond markets saw a bullish flattening of the Bund curve with outperformance of US Treasuries and Gilts driven by a dovish BoE vote. US long bond yields dropped 9bps, on weak jobs data. In the post ECB rates meeting, ECB’s President Lagarde reiterated that the ECB is “in a good place”.It is a quiet day on the Government bond auctions front with only the UK issuing shorter dated paper. The ECB’s Kocher and the BoE’s Pill will be speaking.

Commodities: Following a c. 3% negative move in oil prices yesterday, this morning oil prices are higher by 1.3% ahead of planned talks between Iran and the US later Friday amid escalated tensions. Gold is up 1.7% and silver futures are down c. 6% after falling 9% yesterday, as the metal continues to pull back from recent highs. Bitcoin is up 3% this morning after a 28% drop over the last 10 days.