Quarterly Outlook
Q3 Investor Outlook: Beyond American shores – why diversification is your strongest ally
Jacob Falkencrone
Global Head of Investment Strategy
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London Quick Take - 11 July - ATHs still but tariff worries persist
Neil Wilson
Investor Content Strategist
Note: This is marketing material. This article is not investment advice, capital is at risk.
Risk is taking a bit of a back seat this morning however with mainland European indices off a touch and US futures trailling a little bit as investors take a pause in this melt-up phase amid these tariff headlines re the EU and Canada. Delta Airlines offered a positive update and rallied 12% while jobless claims in the US fell to a 7-week low, offering some further optimism about the US economy – though stagflation pressures may be appearing soon. Nothing on the calendar today - thoughts turn to earnings season kicking off properly next week.
Tesla rallied over 4% on something-something to do with Grok and Robotaxis...not sure it matters much. MP Materials shares surged 50% on news that the US government would become the largest shareholder in the company, the only rare earths miner in the US. As noted in April when we first flagged Trump’s desire to invest in miners, MP Materials is the largest producer of rare earths outside China. The company owns and operates the Mountain Pass Rare Earth Mine and Processing Facility, the only rare earth mining and processing site of scale in North America. The company is also developing a rare earth metal, alloy, and magnet manufacturing facility in Fort Worth, Texas. Shares of Australian rare earth miners like Lynas and Iluka Resources jumped.
Meanwhile, the British economy goes backwards – if you are interested in monthly GDP figures the economy contracted 0.1% in May...there is a lot of noise in these monthly figures but it’s pretty clear things are going the wrong way. April was down 0.3% and there is a sense of worry – sterling weakened and should pullback some more. The dollar is on course to rise this week for the first time in three.
Finally, rounding up things, Bitcoin price was standing just below yesterday’s all time high $118,000, as ETF inflows surge and option traders target $120,000. BlackRock’s IBIT see’s continued strength, its holdings now beyond 700k. Silver is on the march again this morning, hitting a fresh 13-year high at $37.33 as traders eye $40, while gold remains rangebound. Oil has pulled back a bit further from its 200-day SMA.
London Quick Take – 11 July – ATHs still but for how long?
Key Points
- Trump threatens Canada with 35% tariff, EU set to receive letter
- FTSE 100 makes all-time high as Wall Street closes at fresh record
- UK economy shrinks in May, sterling weaker
Zeitgeist: Volatility (VIX) lowest since March, valuations above the start of the year – can earnings live up to beaten-down expectations? Pain trade is up as positioning is lighter than at start of the year - what's going to prick this bubble? Hard to say as fiscal largesse shows no signs of reversing whether US or UK and now the EU going gangbusters...spending neverendum + war footing favours real assets like stocks and commodities.
US President Donald Trump threatened a 35% tariff on Canada, to take effect from 1 August, while it seems progress with the EU may have stalled as it will be next to receive a tariff letter. This is where the market could react. He also raised the prospect of increasing levies on most other countries by 15% or 20%.
But investors don’t care. The S&P 500 and Nasdaq Composite closed at all-time highs on Thursday. The FTSE 100 rallied over 1.2% yesterday to hit an all-time high, driven by miners surging on copper tariff news. Glencore (+4.6%), Rio Tinto (+4.2%), and Anglo American (+4.1%) led gains. We’re basically flat this morning as the gains are booked – fresh push to 9k will require a leg in the US or have to wait until next week, but it’s just a matter of time.
But investors don’t care. The S&P 500 and Nasdaq Composite closed at all-time highs on Thursday. The FTSE 100 rallied over 1.2% yesterday to hit an all-time high, driven by miners surging on copper tariff news. Glencore (+4.6%), Rio Tinto (+4.2%), and Anglo American (+4.1%) led gains. We’re basically flat this morning as the gains are booked – fresh push to 9k will require a leg in the US or have to wait until next week, but it’s just a matter of time.
Risk is taking a bit of a back seat this morning however with mainland European indices off a touch and US futures trailling a little bit as investors take a pause in this melt-up phase amid these tariff headlines re the EU and Canada. Delta Airlines offered a positive update and rallied 12% while jobless claims in the US fell to a 7-week low, offering some further optimism about the US economy – though stagflation pressures may be appearing soon. Nothing on the calendar today - thoughts turn to earnings season kicking off properly next week.
Tesla rallied over 4% on something-something to do with Grok and Robotaxis...not sure it matters much. MP Materials shares surged 50% on news that the US government would become the largest shareholder in the company, the only rare earths miner in the US. As noted in April when we first flagged Trump’s desire to invest in miners, MP Materials is the largest producer of rare earths outside China. The company owns and operates the Mountain Pass Rare Earth Mine and Processing Facility, the only rare earth mining and processing site of scale in North America. The company is also developing a rare earth metal, alloy, and magnet manufacturing facility in Fort Worth, Texas. Shares of Australian rare earth miners like Lynas and Iluka Resources jumped.
Meanwhile, the British economy goes backwards – if you are interested in monthly GDP figures the economy contracted 0.1% in May...there is a lot of noise in these monthly figures but it’s pretty clear things are going the wrong way. April was down 0.3% and there is a sense of worry – sterling weakened and should pullback some more. The dollar is on course to rise this week for the first time in three.
Finally, rounding up things, Bitcoin price was standing just below yesterday’s all time high $118,000, as ETF inflows surge and option traders target $120,000. BlackRock’s IBIT see’s continued strength, its holdings now beyond 700k. Silver is on the march again this morning, hitting a fresh 13-year high at $37.33 as traders eye $40, while gold remains rangebound. Oil has pulled back a bit further from its 200-day SMA.
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