Hi, my name is Carl Rogan and every Monday morning I will be bringing you my views of what happened during the previous week and what to look out for in the coming week.
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 …
Was a fifth week in a row of losses for major indices. The Middle East dominated events once again with Oil prices continuing to worry investors.
Monday was the most eventful and busiest day of the week for markets. The day began with another sell off as Oil prices continued to rise. Donald Trump then moved to ease fears by announcing progress with peace talks and the suspension of a plan to bomb Iranian energy infrastructure. This announcement saw an immediate bounce back by markets although Iran claimed no peace talks were taking place.
So high volumes on Monday but then the rest of the week fell into a familiar subdued pattern with uncertainty seemingly discouraging retail participation and volumes were much lower.
Energy companies were busy again but not at the same levels we’ve seen in previous weeks. Total Energies was the most traded stock on Monday before Spanish fashion company Puig took top spot on Tuesday after merger talks with Estee Lauder.
Santander was most traded on both Wednesday and Thursday and then on Friday Enagas was very popular, jumping 17% on the back of milder than expected new energy regulations announced by the Spanish regulator.
Santander was the most traded stock of the week and Madrid won back its crown as most traded market on Equiduct.
This week …
Is a shorter week with European markets closed on Friday for the Easter break. It will almost certainly again be dominated by events in the Middle East.
Inflation data is due from Germany, France and Italy whilst US retail sales numbers will be released on Wednesday. US jobs figures are due on Friday but won’t be processed by markets until after the Easter break.
The price of oil has now reached €115 a barrel and it’s likely we’ll either have some sort of peace agreement or a ground invasion of Iran by the end of the week.
A peace agreement would see markets rally whilst an escalation of the conflict will see markets fall further. BlackRock boss Larry Fink claimed last week that if oil reaches €150 a barrel it will trigger a worldwide recession.
The VIX index is now above 30 and it feels that uncertainty has reached such a level that many retail investors are choosing to adopt a wait and see approach before entering the market again.
Average Daily Volumes for the second half of March are down 20% on the first half of the month. Equiduct are still on course for March to be a record turnover month but the last couple of weeks have been noticeably quieter.
With mid term elections fast approaching and approval ratings plummeting amongst US voters, Trump needs to bring this conflict to a swift end. That will be easier said than done at this point and a ground invasion could be a hole he struggles to get out of. It will be interesting to see how things develop in the next week or so. The economic data coming out over the next week to ten days will give a good indicator about how much the US economy is being impacted by this war. Markets are approaching correction territory already and could well fall further, much further. Let’s see how the week progresses.
That’s all from me, until next week… Happy investing!
Carl
