The Week That Was

Global equities fell 1.8% in euro terms last week on the back of a sell-off in semiconductor stocks and increasing tension in the Middle East. The S&P 500 fell 1.6% as a new Chinese AI model challenged the narrative that its LLMs are 8-12 months behind US frontier models, whilst Meta’s decision to sell excess compute also weighed on sentiment in tech. European equities ended the week largely flat with weakness in the tech- and travel-related names being largely offset by a rally in energy stocks. Global commodities climbed 3.6% in euro terms with Brent oil climbing 16% to $88 a barrel as the effective peace deal between Washington and Tehran collapsed. This also resulted in bond yields moving higher but only modestly following a better-than-expected inflation print in the US, which points to the Fed remaining on hold this year.

Summary Economic Releases

The Week Ahead

Asian markets are broadly flat at a headline level this morning as tech-related weakness in South Korea is largely being offset by strength in China. The latter’s equity market is being buoyed by state fund buying and renewed optimism around tech as Moonshot AI announced plans for an IPO despite accusations that it extracts results from top US LLMs to advance its capabilities. Brent oil climbed back above $90 a barrel, whilst European gas prices rose to a four-month high as the US conducted its ninth straight day of attacks aimed at degrading Iran’s ability to attack commercial vessels in the Strait of Hormuz. We see the re-escalation as temporary as any sustained spike in inflation would negatively impact the Republicans’ chances in the mid-terms.

A raft of earnings releases from US corporates is likely to be the dominant driver of market price action in the week ahead. The season has enjoyed a strong start led by US financials, which rallied 1.0% last week; however, investor focus will increasingly shift to tech in the coming days. Intel is expected to deliver a modest beat/raise, reflecting continued demand linked to agentic AI, whilst Alphabet is forecast to report a slight moderation in Search revenue growth amid softer advertising trends. Offsetting this, Cloud revenue is expected to accelerate on the back of a strong backlog, with margins continuing to expand and capital expenditure guidance likely to remain unchanged. In Europe, Ryanair produced a weaker-than-expected set of Q1 2025 results, Nestlé is expected to post organic revenue growth of 3.4% and TotalEnergies should benefit from higher oil prices, trading profits and solid production growth.

From an economic perspective, the swearing-in of Andy Burnham as UK Prime Minister today could prove a source of volatility for both sterling and gilt markets given uncertainty around his fiscal policy priorities. In the Eurozone, a softening labour market is expected to keep the ECB on hold at Thursday’s meeting, although the recent reacceleration in commodity prices may encourage a more hawkish tone and lend support to expectations of a potential rate hike in September. Eurozone Consumer Confidence data on Thursday and industrial activity figures on Friday are both expected to improve to their strongest levels since March, though they are unlikely to fully capture the impact of the recent geopolitical deterioration. Meanwhile, US PMI data due on Friday are expected to remain firmly in expansionary territory, despite a modest slowing in services activity, pointing to continued resilience in underlying economic growth.

Opportunities this week:

• Ryanair (Overweight PT €30.50, 17% upside): Q1 2027 results
• TotalEnergies (Overweight PT €76, c. 8% upside): Q2 results preview and recap on thesis
• Irish Continental Group (Overweight PT €7.80, +23% upside): recap on April trading statement and look-through for H1 results

Written by John Mullane, CIO, Cantor Fitzgerald Ireland

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.