Category: Market Update
Market Update: The world gets riskier
Equity and bond markets came under pressure last week, as oil prices rose above $100 per barrel again. The downside was clearest in bond markets, with long-term government yields moving up sharply. Stocks held up a little better in aggregate in the early part of the week, but all the risks around make them look increasingly fragile.
Market Update: Markets going in circles
The summer lull has arrived early. Broad stock indices, bonds and even oil prices have bounced up and down over the last two weeks without any clear direction. The previous AI winners, particularly semiconductors (chips), are the exception: they have swung from strongly positive to strongly negative, despite there being no one specific negative catalyst for this sentiment shift. The themes are still as they have been for months: the war in Iran, US interest rates and AI growth potentially running out of steam. Investors still do not know what to make of them all. But pausing for breath is...
Market Update: Geopolitics refuses to leave the stage
Just as markets had downgraded the risks emanating from the Middle East, they flared up again. Yet again, however, it is telling how measured the market’s reaction has been to ships being set ablaze in the Strait and the consequent military responses.
Market Update: Second half starts with wary market mood
Global stocks recovered from last week’s sell-off, but are still only roughly flat from a month ago. Once again, the previous big winners – like US tech – are the most under pressure. The week before last, we put these moves down to institutional investors rebalancing their assets at the end of a strong quarter. Further pressures last week suggest something else might be going on.
Market Update: Markets heading for holidays…
Stock markets, predictably, wobbled last week. Investors have seen great returns this quarter despite intense global risks, so now many institutional investment managers must rebalance their asset weightings back to target – by selling the assets that have done well. Rebalancing selling pressures are temporary, but the extent of this sell-off suggests that markets might be less fun in the second half of the year. Drier liquidity conditions and market jitters could mean stable but slightly less spectacular returns ahead.
Market Update: Markets firm but fair
The deal between US and Iran, which extends the ceasefire and opens the Strait of Hormuz, was unequivocally good news for markets. Oil prices are sharply down, global stocks are up and long-term bond yields have calmed.
Market Update: IPOmania triggers market self-doubt
Equities started last week poorly but ended strong – a reversal of the week before. Trading liquidity was initially tight as investors contemplated a glut of newly issued shares, most notably today’s SpaceX IPO, but liquidity returned on Friday amid good news stories. Recent volatility has largely been in tech sectors. That is why UK and European markets were steady compared to the tech-heavy US, despite the European Central Bank (ECB) raising interest rates.
Market Update: Waning momentum – growing concerns
Until Friday lunch time, it was a fairly dull week for markets. News of an Israel-Hezbollah ceasefire eased concerns but did not materially change the Middle East stalemate. As at Friday afternoon though, traders were digesting a stronger than expected US employment report. May’s surprising bounce in job creation suggests a stronger US economy than might have been expected, given higher fuel prices.
Market Update: Calmer markets?
Global stocks pushed higher last week, led yet again by global tech stocks. Semiconductor chip makers were especially strong. On Thursday, Axios reported that US and Iranian officials had agreed a 60-day ceasefire extension, during which they would negotiate a resolution to Iran’s nuclear program. The ongoing talks have calmed nerves and substantially lowered oil prices – to below $90pb at the time of writing, down from $110pb at the start of last week.
Market Update: Assuming growth will win
Global stocks and global bonds ended last week positively, with the gains coming mostly in non-US markets. This was the first week since the end of March that big US tech stocks have underperformed. That underperformance comes despite continued strong results from the likes of Nvidia. Meanwhile, European government bonds did well; prices rose (and so yields fell), especially in the UK. That is not enough to counteract the sharp yield rise over the last two months, so the sense of market fragility remains. Still, last week was a very welcome respite.
Market Update: Trump in China and Starmer in peril
Markets are feeling hopeful. Iran is still mulling over Donald Trump’s proposal to end the war and reopen the Strait of Hormuz, but investors are betting on a done deal. Oil prices dropped from around $115 per barrel [pb] on Monday to below $100pb. Stock prices took another leg up – helped by strong corporate earnings and some decent economic data. In local currency terms, US equities continue to outperform, but a weaker dollar makes their weekly performance look much more in line with other markets.
Market Update: Reasons to believe
Markets are feeling hopeful. Iran is still mulling over Donald Trump’s proposal to end the war and reopen the Strait of Hormuz, but investors are betting on a done deal. Oil prices dropped from around $115 per barrel [pb] on Monday to below $100pb. Stock prices took another leg up – helped by strong corporate earnings and some decent economic data. In local currency terms, US equities continue to outperform, but a weaker dollar makes their weekly performance look much more in line with other markets.
Market Update: Markets making the best of it
The risks we wrote about last week keep rising. The continued US blockade of the Strait of Hormuz, along with reports that the US might restart attacks, sent oil prices above $120 per barrel in midweek trading. They have since settled down to around $110pb. UK and European stocks are slightly down over the week in sterling terms, but US equities are higher again as the Friday session starts. Japan and China are flat as they begin “Golden Week” holidays, with help from a sharp rally in the Japanese Yen. In aggregate, global equities have gained slightly.
Market Update: Resilient equity markets, rising risks
Risks have risen compared to a week ago, but global stocks are little changed. The Middle East conflict has simmered down into a tense stalemate, with ongoing dialogue but little progress. Global equity indices are in a holding pattern, although US stocks have now outperformed for two weeks. It is an uneasy calm, with oil prices and government bond yields rising back up.
Market Update: FOMOOP – Fear of missing out on peace
As we were writing, Iran declared the Strait of Hormuz “completely open” and markets rose sharply. This time, bond yields fell back too. Even before that announcement, equity markets had, more or less, decided that the war is over – thanks to US-Iran talks and the Israel-Lebanon ceasefire. US stocks rose above their late February peak for the first time since the conflict began. Investors are now focussing more on strong earnings growth than geopolitical risks.
Market Update: A potential return to normal
Donald Trump’s apparent olive branch to Iran helped to temporarily stabilise markets last week. Stock prices gained a little in the early part of the week, government bond yields fell back from recent highs, and energy prices dropped back from last Friday’s peak. None of these moves were that big, however, and, more importantly, all were brief.
Market Update: Markets hold their breath
Donald Trump’s apparent olive branch to Iran helped to temporarily stabilise markets last week. Stock prices gained a little in the early part of the week, government bond yields fell back from recent highs, and energy prices dropped back from last Friday’s peak. None of these moves were that big, however, and, more importantly, all were brief.
Market Update: Challenged optimism
The Iran War keeps dragging down markets. Israel’s strike on Iran’s South Pars gas facility, followed by Iran’s strike on a Qatari liquified natural gas facility – the largest in the world – saw crude oil spike above $115 per barrel and European natural gas prices surge. The FTSE 100 dropped 2.3% on Thursday, and European stocks similarly fell. Escalation has forced markets to reconsider their optimistic view on the extent of the war. At the same time, though, we suspect these events have made de-escalation more likely.
Market Update: It takes two to TACO
Stock markets pulled back over the last couple of days, as oil prices rose to around $100 per barrel (pb). Before that, equities had been holding up okay, particularly large cap stocks. Sterling has slipped about 0.5% against the US Dollar which has helped to offset some equity weakness, meaning global equity portfolios are only slightly lower. Bonds continue to be surprisingly weak, especially in the UK. The 15-year UK government bond now yields 5.16% (0.5% more than before the war).
Market Update: War disrupts energy markets
The Iran war has plunged markets into uncertainty with spot Brent crude oil above $105 per barrel (and having touched $120 pb) and European natural gas prices now more than doubled. European and Asian stocks have been hit harder than the US, and the dollar has risen – reversing recent trends.