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 marginally quieter than the week before with turnover of €2.7billion. The week started with fresh tariff volatility over Greenland before slowing a little then peaking on Thursday after Trump again backed down.
I’m not one to say “I told you so!” but last week I very much did tell you so if you remember:
“So there is definitely the possibility of volatility in European markets on Monday morning. It’s quite difficult to gauge to what extent markets will react at this point. Firstly, the tariffs wont come in to affect until the 1st of February which means the TACO trade (Trump Always Chickens Out) has to be a possibility. Q1 2025 saw tariffs being threatened on countries left right and centre causing widespread volatility in markets. However, the threat of tariffs turned out to be a negotiation tactic as the tariffs that ended up being imposed were far less than first anticipated in the majority of cases.
A pattern has emerged of Trump making threats on a range of different topics, only to be persuaded to change his mind or to limit the threatened consequences if he thinks he has got a deal in his favour.”
Markets saw two days of back-to-back losses with US indices experiencing their biggest one day drop in three months on Tuesday. The rally came on Thursday after Trump’s U-turn on tariffs on Wednesday night.
BBVA and ASML were again the most traded stocks. We also had a Dutch IPO last week as Czech defence firm CSG launched on the Amsterdam stock market and were the 7th most traded stock on Equiduct on Friday.
Nordic markets were busier than usual last week due to a number of them being threatened with Traiffs by Trump. Stockholm was particularly well traded.
This week …
Has all the ingredients to be busy again. The main economic event this week is the US interest rate decision after the close on Wednesday. Usually, we’d expect to see slightly subdued trading on the day of the decision as investors await the outcome. However, analysts have it priced as a 95% chance rates are held this time so investors may not feel the need to be so cautious.
We are in the heart of the Q4 earnings season now and this is likely to be the main driver of volatility this week. The big US tech companies Apple, Meta, Microsoft and Tesla all release updates this week. Oil industry giants Exxon Mobil and Chevron release results on Friday. In Europe, some of Equiduct’s most traded stocks are also due to announce results including ASML, ING, Sanofi and Caixa.
Growth figures are also due for a range of European markets on Friday including Spain, Germany, Italy and France. Plenty of potential for volatility this week then and that’s ignoring the chance of Donald Trump coming up with something new to rock the markets before next weekend.
Equiduct will almost certainly reach a new milestone this week as we are bang on course for a record turnover month. The previous record was a little over €11billion set back in October last year. If average daily volumes continue as they have been then we could smash that figure by a billion euros come Friday.
We still await the Supreme Court’s ruling on the legality of Trump’s Tariffs whilst geopolitical tensions continue to bubble away in several different locations around the world.
Will the FED spring a surprise this week and cut rates? What will Trump’s next move be with Greenland? Will he pivot back to Iran or South America this week? It should be another interesting week ahead.
That’s all from me, until next week… Happy investing!
Carl
