There is certainly a tad more hope and optimism out there, but with earnings season upon us, we wait with anticipation as to what the immediate future holds. It’s not so much the numbers that we are looking out for, but the unfolding outlook.
The reports from Meta and Microsoft this week have been strong which is encouraging for a sector that has been badly hit due, initially, to DeepSeek and then Trump’s tariff announcements. Other members of the so-called Magnificent Seven, Apple and Amazon saw their share values drop last night. These stocks are more consumer sensitive, of course.
The oil price is falling, and gold is soaring. Commodities are a good inflation hedge and with inflation likely to remain elevated due to tariffs, it’s worth considering commodities as an option within portfolios. However, with the potential for slowing global growth, the demand for some commodities may weaken. As with most assets, it is a balancing act at the moment, but it’s certainly something piquing our interest.
With global growth expected to slow, markets are becoming more hopeful of interest rate cuts as data begins to weaken. There are signs that around the margins this is starting to happen. It’s too short a time frame to be sure, but certainly the expectation is for a deterioration in both sentiment and hard numbers around Western economies.
Someone asked the other day, “What does Trump want to achieve?” Later, we’ll explore the underlying thought process around tariffs.
The conflict between Ukraine and Russia rumbles on, although Russia is intensifying its efforts to force the hand of Ukraine in terms of giving up some of its territory. Reportedly, the US and Ukraine have agreed to a minerals deal in principle. Trump has now started to be more aggressive towards Putin, in calling him out about Russia’s increased aggression towards Ukraine. Any sustainable peace treaty, of course, will be good for markets and the global economy.
On today’s agenda:
- Meta and Microsoft shares soar
- Commodity crisis or an opportunity?
- Slower global growth expected
- Federal Reserve, interest rates and financial market crisis
- The forecasts for interest rates
- What does Trump want to achieve?
- Performance overview
- Summary
Meta and Microsoft shares soar
The so-called Magnificent Seven stocks have taken a battering since Trump’s liberation day announcements of trade, yet both have announced significant revenue uplifts. The main reason cited is the growth of their AI businesses. Both beat market expectations.
Sentiment going into this earnings season for technology stocks was weak, with many commentators and analysts warning of a further decline in prices.
Continues…
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