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 shorter week due to the Easter break but we still saw plenty of volatility.
Markets surged upwards on Wednesday after the US backed down on threats to “wipe out a whole civilisation” and a two-week ceasefire was agreed.
The STOXX 600 had its best day in over four years whilst it was the second busiest day in Equiduct’s history as we turned over more than a billion euros.
This followed a record Q1 and a new monthly turnover record being set in March.
Unfortunately, the positivity was short lived with Iran closing the Strait of Hormuz again by the end of the day due to Israeli attacks on Lebanon.
Thursday and Friday were back to much lower volumes as uncertainty again gripped markets. It was a bullish week overall with the S&P 500 up 3.5%.
Santander was again the most traded stock on Equiduct last week and was our most traded stock in Q1 by a long way, turning over one and three quarters billion euros.
Energy stocks continue to be heavily traded and Friday also saw quite a bit of activity in weapons manufacturers such as Indra and Rheinmetall.
This week …
Is a tricky one to predict. Peace talks between Iran and the US over the weekend made little progress and now Donald Trump is refusing to let any traffic through the Strait of Hormuz.
Therefore, I’d expect oil prices to rise and markets to drop at the start of the week at least. The rest of the week will depend on how the situation develops.
We also have the start of the Q1 earnings season this week with a number of US banking giants announcing results. In Europe, we’ll get updates from the likes of ASML, LVMH, Kering and Hermes.
The week is otherwise light on Economic events but there is plenty of potential for volatility here.
I was more than a little surprised by the reaction of markets last week to the ceasefire agreed on Tuesday night. The surge of optimism and huge rise in markets on Wednesday made little sense.
Yes, a ceasefire had been agreed after a nasty escalation had looked likely. However, the ten-point plan that was reportedly put forward by Iran was full of things the US were never going to agree to.
Even if it had been a little more palatable to the Americans, Donald Trump changes his tune so often it’s really difficult to attach too much significance to anything he says now.
In my opinion, he’s probably regretting starting this war now and will be desperate for an off ramp. It’s hard to envisage how he does this without losing face though at this point.
So I don’t see this conflict ending anytime soon. This could result in a period of uncertainty in markets and potentially lower volumes as retail investors wait for things to settle.
Q1 earnings results could stimulate markets on the other hand. Like I said, a difficult week to predict. Let’s see how it unfolds.
That’s all from me, until next week… Happy investing!
Carl
