Please see this week’s market views from eToro’s global
Healthy pause not a sinister correction
We see recent market weakness as a healthy and expected pause in the record-breaking recovery rally. Average years’ see three 5% pullbacks. The two main sell-off drivers of higher bond yields and oil prices are likely nearing peaks. Whilst China concerns are far from new. We look ahead to stronger earnings growth and well-supported valuations. Bigger risk is being out of markets. We focus on ‘defensive growth’ tech, healthcare, bonds, crypto, and cautious Value. See Page 4
Stocks hit by triple-whammy
Stocks hit by a triple whammy of 15-year high US 10-yr bond yields, $85/bbl. oil, and renewed China growth and debt concern. US retail sales surged, taking Q3 GDP NOWCast to a huge 5.8%. UK saw one off inflation fall. Moody’ cut US banks outlook. Largest retailer WMT beat results and upped outlook. Buffett’ BRK buys homebuilders. Dutch payments giant ADYEN slumped after poor results. See our Q3 Markets Outlook HERE and at twitter @laidler_ben. See Page 2
Valuation worries but not panic
US stock valuations at a record premium to our fair-value, but we see coming support from lower bond yields, recovering earnings, and with plenty cheaper alternatives across markets. See Page 2
China’s limited contagion risks
China is an economic giant but capital markets minnow. Opposite to super-sized US markets. Lessens contagion risk, whilst its policy flexibility and valuation are contrarian support. See Page 2
The oil rally may ‘self-correct’
Oil prices in new and higher range but more gains will be harder and risk triggering demand fears or testing OPEC supply unity. See Page 2
A lot is riding on NVIDIA
Results (Wed) from the $1 trillion mkt. cap. Semis giant could give tech sector needed boost from strong-for-longer chip and AI growth. See Page 2
Crypto flash crash trigger by SpaceX sale
Sharp crypto weakness was triggered by SpaceX BTC sale report, but asset class also not immune to broader market weakness. Meme coins DOGE and SHIBxM led down. COIN saw rare regulatory good news on crypto futures approval. ARK Invest spot BTC decision delayed by SEC. The TON coin broke into top-20 largest. See Page 3
Commodities hit by China fears
China economic growth, property, and debt concerns hurt commodities. Led down by industrial metals and oil, with Brent below $85. Ag mixed as OJ surged on Florida supply concern, and coffee fell on good Brazil harvest progress. Bidding war broke out for US Steel (X), and STLAM.MI latest to invest in lithium. See Page 3
The week ahead: Jackson Hole, NVDA, Politics
1) Fed’s Jackson Hole (Thu) meeting focus as global bond yields soar. 2) Semis and AI giant NVDA reports (Wed), with whole sector watching. 3) Global PMI macro health-check for US, EU, JP, UK, AU. 4) The first Republican primary TV debate kicks off 15-month presidential race. 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
