The Week That Was

Global equities advanced strongly last week, led by the US and Emerging Markets, as resilient corporate earnings, signs of progress towards a resolution of the war in the Middle East, and supportive economic data underpinned risk appetite. The S&P 500 posted its sixth consecutive week of gains, closing 2.5% higher in local currency terms, buoyed by strong earnings, particularly from the semiconductor space.

European equities ended the week up a modest 0.4%, with Tech and Consumer Discretionary among the standout performers, whilst the Energy sector declined on increased optimism about the potential for a resolution to the US-Iran conflict. Global bonds were largely unchanged on the week, however UK 30-year yields moved to a 28-year high on political uncertainty. Global commodities fell 1.2% in euro terms, primarily driven by a retracement in oil prices.

Summary Economic Releases

The Week Ahead

Asian stocks moved higher overnight, buoyed by a rally in the tech sector and strong factory gate prices in China, whilst brushing aside Trump’s rejection of Iranian peace proposals. Oil prices did move higher, with Brent up 4.0% to $105, whilst the dollar also strengthened against the euro. If the Strait remains closed deeper into the summer, higher oil prices could see earnings expectations catch down to the macro reality, warranting more cautious positioning from investors, particularly given equity markets are back at all-time highs.

Earnings season moves into its latter innings in the week ahead, however there will remain several market-moving releases. In the US, Applied Materials and Cisco will report, with focus on the latter set to centre on AI-related updates tied to networking demand, hyperscaler spending trends and the pace of enterprise infrastructure upgrades. AI chip maker Cerebras Systems will come to market this week, which should be a key test of investor sentiment towards the space ($26bn valuation), ahead of the expected IPOs of Anthropic and potentially OpenAI later in the year. The key names in focus from a European standpoint this week include Siemens and Vodafone.

From an economic perspective, Tuesday will see the release of US core CPI, which is expected to rise modestly to 2.7% YoY for April. However, a sharper increase in the headline rate to 3.7% will present challenges for Kevin Warsh as he begins his term as Fed Chair later in the week (Friday). On Wednesday, the ZEW Survey is anticipated to show that economic sentiment fell to its lowest level since December 2022, largely reflecting concerns tied to ongoing tensions in Iran. By Thursday, attention will increasingly turn to geopolitics, where the summit between President Xi and Trump could have implications for rare earth supply chains, tariffs and the ongoing war in Iran. The impact of the war is also likely to weigh on consumer spending, which should be visible in April Retail Sales released that day. Finally, a step up in QoQ GDP in the UK is expected on Thursday, however this is unlikely to be enough to relieve pressure on Keir Starmer following a poor showing in the local elections last weekend.

Opportunities this week:
• Barclays (Overweight, PT 550p, c. 26% upside) – ACL and High Risk Advisory Portfolio inclusion
• Grafton Group (Overweight, £12.05, +37.4% upside) – Look ahead to Q1 results
• ICG (Overweight, €7.80, +18.2% upside) – Reflection on solid Q1 trading statement

This is an extract from the Weekly Markets Report by Cantor Fitzgerald Ireland. For more detail on individual securities, or to discuss how we can support your investment needs, please get in touch.