Please see todays Daily Investment Bulletin from Brooks Macdonald providing a brief analysis of markets:
What has happened
Global markets have been rather quiet over the last 24 hours given Presidents’ Day holiday in the US. The STOXX 600 index edged up by 0.16%, continuing its four-week streak of gains and reaching a new two-year high. The index now hovers just shy of its record high from January 2022, suggesting the potential for a new milestone in the near future.
A big week for corporate earnings
Attention is turning to a series of corporate earnings reports. Walmart is anticipated to report at noon London time today, setting the stage for Nvidia’s highly anticipated report after market close tomorrow. Nvidia’s performance is particularly noteworthy as it leads the S&P 500 with an impressive 46.6% surge this year, contributing to the ‘Magnificent 7′ stocks’ collective 10.65% year-to-date advance. In the UK, major banking institutions such as Barclays, HSBC, Lloyds, and Standard Chartered are scheduled to report earnings throughout the week. It’s expected that the UK’s five largest banks will announce a combined record-breaking £50 billion in profits, reaping the benefits of increased borrowing costs. While last year’s results hold importance, the focus is likely to shift towards future outlooks, especially with the Bank of England’s anticipated rate cuts. Despite a positive valuation outlook from analysts, the UK banking sector faces challenges from broader economic concerns and regulatory and political pressures.
What does Brooks Macdonald think
While this week may be characterized by a scarcity of macroeconomic data, it is nonetheless punctuated by a series of critical earnings reports that are likely to capture the attention of investors. We will see the market narrative shift from a macro-level, top-down approach to a micro-level, bottom-up analysis as investors seek to dissect the granular details of company reports. The guidance and forward-looking statements provided by these companies will serve as a barometer for the underlying economic health and could potentially offer insights into future market trends and corporate strategies.
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Andrew Lloyd DipPFS
20/02/2024