Last week …
Saw volumes rise for the third week in a row as markets start to get busier again after the summer holiday period.
Monday was the busiest day of the week as a combination of an AI stock sell off, rising oil prices and government bond yields, resulted in a volatile day for the markets. US 10-year treasury yields rose above 5% for the first time since 2007 whilst Japan’s 10-year yield hit a 30 year high!
Friday was the second busiest day of the week, with energy prices impacting markets resulting in sector sell offs for the automobile industry and telecommunications sector. The afternoon was particularly busy with and extra boost from the quadruple witching day.
Wednesday had been the quietest day ahead of the US interest rate decision after close. As expected, US interest rates were raised as were Japanese rates whilst the BOE held UK rates unchanged. The BOE did warn that rises would be coming if oil prices do not come down soon however.
Wednesday also saw an automobile sector sell off with Stellantis, Renault and Volkswagen all well traded. Prices recovered a little on Thursday before a bigger sell off on Friday. The main driver had been a profit warning from Volkswagen with contagion dragging other car makers down too.
Friday also saw a telecommunications sector sell off as analysts downgraded Deutsche Telekom and Orange. Telefonica was the second most traded stock of the day turning over €23million.
This week …
Is much lighter on Economic events. Donald Trump’s meeting with China’s Xi Jinping on Thursday will be the highlight of the week. Markets will be watching closely for any developments in talks on AI, trade and other areas.
Previous meetings between the two have been fairly uneventful but you just never know with Donald Trump.
We also have rate decisions from Switzeland, Norway and Sweden on Thursday so there is potential for volatility in those markets on Equiduct this week.
Oil prices will be a big driver again this week with prices above $100 dollars a barrel having implications for a wide range of sectors. Last week saw automobile stocks suffer whilst the week before luxury good companies were the subject of falling prices. The longer oil prices stay high, the more popular electrical vehicles will become, the more expensive travel will become etc etc. It’s difficult to judge what the true price should be with suggestions this week that more oil is getting through the Strait of Hormuz than realised. Houthi attacks on Saudi oil infrastructure is also not helping things.
Will we get any further tech sector volatility this week? Alarm bells were ringing with warnings from the biggest AI companies last week about the pace of development. Will Trump and Xi agree to slow things down? Unlikely. Even if they do, will they trust each other to keep to it? Let’s see what this week brings.
That’s all from me, until next week… Happy investing!
Carl Rogan
