My views are my own and they do not constitute investment advice. My views are derived from Equiduct’s unique data set which represents a clean retail signal free of distortion from institutional investors and therefore are telling of what the sentiment of European retail investors is.
Without further ado, let’s dive right into it!
Last week …
We were expecting a busier week and we weren’t disappointed as Equiduct turnover came in just short of €3billion.
More records were broken by Equiduct last week with a new monthly average daily volume record set of €578million. This was the third time in a year this record has been broken.
Santander also broke the record for turnover for a single stock in a calendar month on Equiduct by turning over €674million, beating the previous record set by ASML in January.
Q4 earnings was again a big driver of volatility with Indra Seria A surging 20% on Thursday to finish the day as the most traded stock on €68million turnover.
It was IAG’s turn on Friday as the stock dropped 7% turning over €62million. This wasn’t enough to prevent Santander being the most traded stock of the week however, with turnover of over €200million.
The banking sector was particularly busy last week, especially in Madrid. Spanish banks were well traded throughout February and Madrid was our busiest market, responsible for 40% of all trading on Equiduct.
Nvidia’s results were a focal point of the week and despite more stellar numbers, there was still plenty of tech sector uncertainty last week.
This uncertainty has been to the benefit of European markets as we continue to see a rotation away from expensive US tech companies. The STOXX 600 hit a new high last week as did the FTSE 100, whilst Milan and Paris also recorded decent gains over the week.
This week …
Looks set to be a very high volatility week for markets after the US attacked Iran over the weekend and Iran retaliated against multiple targets throughout the Middle East.
The strait of Hormuz, which 20% of the world’s oil passes through, became uninsurable overnight and is effectively closed. This has caused oil prices to jump over 10% and will have knock on affects across world markets.
A prolonged conflict could lead to oil prices heading north of €100 a barrel leading to higher inflation which would result in rising interest rates.
I’d expect to see energy and travel companies well traded this week alongside the weapons manufacturers. The banking and insurance sectors will also be heavily impacted.
The big question is how long this conflict will last. If it were to turn into weeks and months, then it will be a big shock to markets. The US will be hoping it can be ended quickly but so did Russia and that war is now over four years old.
Aside from the Middle East, we are set to receive a number of economic updates this week. We are due updates on European inflation, US retail sales and then US jobs figures on Friday.
I’m expecting Frankfurt to be a little busier this week with a number of Q4 updates due. Madrid finished last week with high volatility and I’m expecting more of the same.
It’s going to be a very busy week for markets and I wouldn’t be surprised to see another Equiduct record beaten. March has been busier than February in five of the last six years and if the pattern continues it will be a record Q1. Let’s see how the week progresses.
That’s all from me, until next week… Happy investing!
Carl
