Please see this week’s market views from eToro’s global
Trough earnings missing the tech catalyst
Our mid-Q2 earnings season check in shows profits again beating low expectations, but with mixed results so-far from the hoped for AI-led tech growth rebound. Whilst consumer and cyclical stocks have seen positive surprises, and pressure is coming off profit margins. S&P 500 seeing a borderline revenue recession (-1%) and trough earnings (-7%) with outlook for a gradual growth rebound in coming quarters to support the big valuation-led rally this year. See Page 4
A historic week for central banks
Tech back leading stocks higher as near end of Fed and ECB rate hikes, with ’surprise’ tightening baby-step from BoJ, China stimulus hopes, and low US PCE inflation report. Q2 results mixed with tech-relief from GOOG and META and some disappointment from MSFT. MCD to MA results and 2.4% Q2 GDP growth showed US consumer strength. See our Q3 Markets Outlook HERE and at twitter @laidler_ben. See Page 2
The benefits of the broadening rally
Value opportunities from healthcare to travel as bull market broadens, but we think Value is an overall trap without GDP trough visibility, whilst tech-led Growth has more in tank. See Page 2
Global economy coming out of surgery
GDP forecasts firmed, inflation concerns eased, and central banks near done. This macro combo keeps us positive but focused on ‘defensive growth’ and cautious on cyclicals. See Page 2
All-weather extreme climate stocks
With extreme weather more common we see natgas, HVAC, generator, home improvement, auto repair, and solar beneficiaries and pricing offsets to ag and insurance losers. See Page 2
Food prices are not coming down
Supply-side weather disruption driven 20% surge in our breakfast commodities basket threatening to extend the cost-of-living crisis. See Page 2
Crypto sits out big macro events
BTC price slipped under $30,000, ignoring the big macro event week but holding on to asset-class leading YTD gains. DOGE led major coins on TWTR payment hopes. Whilst XRP saw profit taking after big SEC-lawsuit gains. Two crypto regulation bills saw US Congress support, whilst OPEN AI CEO launched WRLD token. See Page 3
Commodity rally continues
Commodities rebound extended, boosted by strong US Q2 GDP, China stimulus hopes, and weather-driven supply disruption. Brent oil up for 5th week ahead of Aug. 4th OPEC+ meet, but energy stocks are seeing profits halve YoY in reporting season. Ag leads gains with OJ new all-time high and cocoa 12-year high. See Page 3
The week ahead: AAPL, Jobs, Europe, August
1) AAPL and AMZN (Thu) tech giants lead another big earnings week. 2) Europe focus is on 14th BoE rate hike and EU GDP and price slowdown data. 3) Friday’s US jobs report est. fall to under 200k, would keep Fed happy. 4) End of positive July and start peak-summer August doldrums. See Page 3
Our key views: A positive markets breather
Markets due a breather after the strong 1H, with weaker seasonality, low volatility, and coming growth slowdown. But fundamentally positive on lower inflation and coming rate cuts. Focus on defensive growth and long duration assets from healthcare to big tech. Cautious growth exposed cyclicals, commodities, and banks.See Page 5
Please see this week’s market views from eToro’s global