After a pretty mixed session in Asia this morning (and with little newsflow to catch investors’ eye), European equities didn’t have any choice other than to follow the trend. UK is once again underperforming vs its peers and Germany continues to be the winner in the region (Angela Merkel’s decision to extend the job-preserving subsidies helping the cause today). The DAX was actually very near a 6m closing high yesterday so hopefully it doesn’t disappoint us again today. Other than that, Europe remain trading in the ranges. For your reference, EuroStoxx ranges at 3173/3451and Stoxx at 350/380. Vols have been pretty low since the open with EU indices back trading well below their AVAT levels (c.-30% vs 20d). Focus for the rest of the week will be Jerome Powell’s speech tomorrow at the virtual Jackson Hole summit.

Another session in the green after a positive call between US and China. Volumes slowly improving as we saw all EU indices trading above their 1d, 5d and 10d AVAT levels for the first time in a long time (though they have been slowing down throughout the session). We are seeing Spain outperforming (IBEX up +1.2%, vols up +27% vs yesterday) and the UK underperforming (FTSE -0.3%, made new intra-day all-time rel low vs the SXXE).  Sector wise, Travel and Leisure currently on top (supported by recent optimism over a covid vaccine) with IAG leading the way (IAG LN +5%). Chemicals amongst the losers having made an all-time intra-day relative high vs the SXXP yesterday.

We started the week on a positive note as we are seeing mostly green on our screens. The FTSE / IBEX are both back above 6000 and 7000 respectively and the SX5E is above its 50 & 200dma (although still in the past months range of 3054 to 3451, target is 3451 July high). Over the pond, big tech stocks will be again in spotlight after the S&P made a new all-time high and closing high on Friday. Apple trading higher premarket and getting very close to being as big as the Russell 2000 (AAPL $2.170T, RTY $2.22T). Elsewhere big week for Donald Trump as the Republican National Convention kicks off today. He plans to speak every night so get ready for a noisy week.  

Quite a disappointing day after macro data wasn’t the best. Eurozone PMIs were softer in August (vs the initial post-lockdown pace that we saw) and showed that some economies are moving back below the 50 expansionary benchmark. EZ Composite PMI was 51.6 (vs 54.9 in July) and Germany’s manufacturing was probably the highlight (seeing a further acceleration in activity with the second month of positive China demand commentary, 53 vs 51 previously). Moving to the UK, activity accelerated in August (Composite PMI 60.3 in August versus 57 in July) but worryingly, job losses continue to increase as the end of furlough draws closer. Also note that the employment trends are also deteriorating in the Eurozone.

I’m very much looking forward to the weekend already and I only came back from holiday yesterday. That sort of sums up the market feeling too by the look of things.

The FOMC minutes published last night were clearly not taken very well by investors and we are back in the red. The US slipped into the close, Asia down even harder and Europe currently following the trend. The SXXP and the SX5E both testing their 50dma level although the longer term supports remain more important for us. The SXXP range is 350-380 and it just traded 365.32 last so no real cause for alarm. Volumes overall still pretty lacklustre vs the last 20 days. We actually have decent flow in the pad so please call if you would like some colour.

I’ve been away for a week and a half and although I hate to say it, this has not been the most motivating return. Main themes haven’t really changed much and volumes are still very mid-summery (down ~35% vs the last 20 days). Europe remains in the ranges (yet still nice to see the SXXP up +1.3% from when I left). You will all have seen the S&P new all-time closing high overnight – this time it comes with a BUT!…. Encouraging as it is that it cleared February’s peak of 3386, not only were the Small and Mid Cap indices down on the day but the S&P Equal Weight index was down 48bps on the day and for the S&P 1500 it was a 75% down day (only 25% of stocks up on the day). All in all unconvincing and we can’t say yet that it is clearly bullish.

I feel like today could have easily been a bank holiday! 35 degrees out there, the SXXP currently +0.05% for the day and just like Tuesday, all EU indices have been swinging between flat and -/+0.5% throughout the session (Spain the only exception, currently down -0.8%). Volumes dead across the board (~20% below the last 20 days) hence looks like I’m not the only one ready for the weekend.

So before I get to go on holiday with them, my boyfriend’s parents insisted we both get Covid tests. Ouch. They are only for the strong. Not only was it incredibly unpleasant for my nose, but also my wallet. 140 euros each! Think how many bottles of Ribera del Duero you can buy with that?!? The pain of that made worse by seeing Eurofins share price up +15% today after their strong results. No need to wonder why – the queues were out of the door in Madrid for their test. Real world meets share prices in action!

Tick tock, tick tock. I’m going on holiday on Friday and I’m not sure if it’s just me but this week has been slow, very slow (and we are only half way there!). A lot of the themes remain the same and although it seems like the buy switch has flicked back on (cyclicals back outperforming and all EU indices up), volumes remain very August like. A lack of activity then but still some big milestones being made. The S&P made a 5 month high overnight and one that caught my attention was “Nasdaq underperformed but made another all-time high” haha – what odd times.

When are tech stocks going to stop?! We saw the Nasdaq Composite make another all-time high overnight and interestingly, this time it was not only the big cap tech stocks going up. The Nasdaq 100 Equal Weight Index also made a new all-time high and the Russell Microcap growth index made a 12m price high. Asia followed with a session in the green this morning but European equities are having quite a volatile session. All Indices ticked higher at the open but have been swinging between +/- 0.5% since then. Volumes very mixed with some indices trading above their AVATs, some below. On the desk we are clearly better to buy today but strangely it doesn’t feel as busy as it looks.