Daily Note Archives

Equity Markets:Global equity markets rebounded strongly yesterday, supported by easing tariff tensions between the US and China and a tech rally spurred by another AI deal between OpenAI and Broadcom. The S&P500 increased +1.56%, the Nasdaq jumped +2.21% whilst European stocks finished the day up +0.44%. In the US, nine of eleven sectors were positive with 71% of stocks higher on the day. Information Technology (+2.47%) and Consumer Discretionary (+2.29%) were the two strongest sectors. Consumer Staples (-0.36%) and Health Care (-0.09%) were the weakest. Broadcom saw its shares jump 9.9% after the custom chip designer signed a multiyear agreement with OpenAI to add 10 gigawatts worth of AI data centre capacity to the market by 2029. In Europe nine of eleven sectors were positive with 64% of companies up on the day. Information Technology (+1.77%) and Materials (+1.67%) were the strongest. Communication Services (-0.51%) and Consumer Staples (-0.30%) were the weakest. Big Yellow Group PLC, the self-storage company saw its share price climb 17.1% after news broke that Blackstone is considering a cash offer for the business.

Macro: In macro news yesterday trade tensions appeared to ease between the US and China with both parties willing to talk but insisting for the other to start negotiating first. Both Trump and Xi are set to meet next month in South Korea with an expectation that a deal can be reached at or before the summit. However overnight Asian markets, European and US futures markets have struggled after China imposed retaliatory trade measures on the US by imposing curbs on the American shipping units of Hanwha Ocean Co. Earlier this morning macro data in Germany included final CPI for September which came in at 0.2% MoM (Est 0.2%) and 2.4% annualised (Est 2.4%). In the UK the change in Jobless Claims in September came in at 28.5k, up from the 17.4k prior. The ILO 3-month unemployment rate in the UK came in at 4.8% to end of September (Est 4.7%). In macro news today all focus will be on the ZEW Survey out of Germany. The expectation for the October Survey is an index of 41.1. And from the US we have the NFIB Small Business Optimism index, with stable expectations. There are several central bank speakers today. From the Fed we have Collins, Waller Bowman and Powell. From the BOE we have Bailey and Taylor. And from the ECB we have Villeroy, Kocher, Makhlouf and Cipollone

Stocks: Rio Tinto (Overweight PT 5590p 10.6% upside): Pre-earnings production results released.

Debt: Bond yields finished a little lower on the day yesterday despite the rebound in risk assets.