News

US markets (S&P 500 Index –4.3%) experienced their worst day since June 2020 as US inflation subsided less than expected (data showed an annual inflation rate of 8.3% versus 8.1% expected). As such, investors are bracing for the US Federal Reserve to ramp up its rhetoric about taming inflation. Bets are rising that next week’s rate hike will be 75-basis-points or greater, with the market now pricing in +84bps at 21st Sept Fed meeting.

US markets (S&P 500 Index + 1.0%) recorded its fourth consecutive positive session. Energy was the best performing sector, followed closely by Technology, but the rally occurred across was broad. Fortinet (+4.2%) and Apple (+3.9%) were among the top performing Technology stocks, the latter boosted by reports that the new iPhone 14 presales are better than expected. European markets (Stoxx 600 Index, +1.8%) continued last week’s momentum on Monday, rising above its 50-day moving average and booking its largest three-day rally in two months. 

We initiate coverage of Moët Hennessy Louis Vuitton (LVMH) with a BUY rating. The company is the pre-eminent luxury goods producer globally, controlling a sprawling network of luxury labels, jewellery, alcohol and cosmetics. The company is controlled by Bernard Arnault and family.

LYC shares have had a volatile in 2022 after an amazing run in 2021 where the stock rose +155%. The volatile year also allows us to identify a support level that can create an attractive entry point over the last 6 months, we see ‘strong support’ at $8.40, while the stock struggles to hold above $9.98 which we see as being overbought. Lynas shares rebounded strongly from its July lows, helped by its strong full year result benefiting from doubling is price of rare earths it produces, and delivering a record $540.8m net profit after tax. Lynas has strong cash reserves to expand its growth investing addition $500m to expand its Mt Weld. Lynas being the largest producer of rare earths outside of China means they gained US department of defence deal of $120m and favourable financing to work with JARE Japan Australia Rare Earths.

US markets (S&P 500 Index +1.5%) rose strongly to end the week on a positive note, as markets recovered from a three-week slide. All sectors were in the green, with heavily beaten down stocks making the strongest gains as the most-shorted names were the best performers. Docusign rose +10.5% after its earnings beat estimates, Kroger also jumped+7.4% after lifting its annual forecast.

US markets (S&P 500 Index + 0.7%) closed higher on Thursday despite a Q&A session with Jerome Powell at the Cato Institute, where he reiterated that the Federal Reserve is not considering a change to the pace at which it will hike interest rates. With no change on the macro front, company specific news caused the biggest market moves. Rivian (+10.9%) shares surged after the company announced a partnership with Mercedes to build electric commercial vans in Europe. The leaking of a ‘turnaround plan’ memo from Snap (+9.3%) CEO Evan Spiegel helped the company post an almost double-digit gain.

Shares in childcare centre operator G8 Education (GEM) have been under pressure. And unlike most of the market failed to recovery from June lows. This comes as the childcare operator delivered a weaker result after a challenging start to the year greatly impacted by covid-19 and flooding fortunately things recovered in the second quarter and occupancy rates are now nearing 2019 levels.

US markets (S&P 500 Index +1.8%) have broken their 7-day losing streak, with every sector except energy (-1.2%) closing the session in the green. Utilities and Consumer Discretionary stocks led the pack, both rising 3.0% on the day. Oil stocks within the energy sector index were rocked by the fall in price of WTI Crude oil (-5.8%) over the past 24 hours. European markets (Stoxx 600 Index, -0.4%) fell on Wednesday, following declines in commodity stocks after data from China added to worries about a global economic slowdown. Shares in Ubisoft (UBI:EPA) tumbled 17.2% after investors lost faith that China’s Tencent (0700.HK) would conduct a full buyout of the company.

US markets (S&P 500 Index –0.4%) whipped between gains and losses but eventually closed lower in the first post-Labour Day session. The NASDAQ Index fell -0.7% marking its 7th daily decline in a row, on the back of ‘good’ economic news which translates badly for market sentiment at the moment. US services sector data came in stronger than expected for the month of August, implying the US economy is still in a strong position despite recent interest rate hikes, giving the Fed more room to hike rates further. Adding to the pessimism in stocks is the surge in bond yields. The yield on the 2-year U.S. Treasury jumped to a fresh daily high of 3.515% on Tuesday, almost touching the highs that occurred in 2007.