Quarterly Outlook
Q4 Outlook for Investors: Diversify like it’s 2025 – don’t fall for déjà vu
Jacob Falkencrone
Global Head of Investment Strategy
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London Quick Take – 15 Oct - Stocks stutter amid trade fears, France gets a double lift from LVMH and pension reform
Neil Wilson
Investor Content Strategist
Note: This is marketing material. This article is not investment advice, capital is at risk.
Key Points
- Wall Street pulls back despite strong bank earnings as tech weighs, European stock markets mixed
- Gold makes fresh high as Fed chair Powell indicates further rate cuts to come
- UK chancellor Rachel Reeves looks again at cutting cash ISA allowances
- LVMH jumps 12% after returning to growth, lifts CAC and luxury sector
Rachel Reeves, the Chancellor, is pitching Britain as a paragon of stability and growth at the IMF today. Good luck with that. There is the small matter of one of the most consequential budgets in a generation to get through first. It would be interesting to hear what most business leaders felt about it. Shore Capital pull no punches: The Treasury does “not understand the damage they are causing to this country’s consumer economy.”
Reeves is also reportedly looking again at slashing the allowance for cash ISAs to boost investment in UK equities. It will take a lot more than tweaking around with allowances for retail investors to do this. And I'm not sure about the second order effects – do you move up the risk curve or just plump for less tax efficient cash rates? This has been discussed a lot already but suffice to say a stick is maybe not as good as a carrot.
Oil blockade: Trump did not seem to be dialling back the trade rhetoric. “I believe that China purposefully not buying our Soybeans… is an Economically Hostile Act. We are considering terminating business with China having to do with Cooking Oil, and other elements of Trade, as retribution”.
European stock markets opened marginally higher in early trade on Wednesday. The FTSE 100 is largely tracking sideways after the latest pullback, but is still up 2% in the last month. LVMH gave a boost to the luxury sector with shares popping 12% as it reported organic growth for the first time this year. Burberry shot 6% higher on the read across from the French firm’s results, while Kering was 7% higher. LVHM saw solid demand in Europe and Asia and noticeable improvement in purchasing trends in Asia, except in Japan. The lift sent the CAC up 2%. Paris was also trading higher and French bond yields lower as newly reappointed PM Lecornu said he’d ditch President Macron’s flagship pension reforms in a frantic bid to pass the budget for 2026.
Wall Street was slightly lower Tuesday with tech leading the decline as trade war tremors continue to be felt across markets. Nvidia slipped over 4% to drag the Nasdaq Composite down three-quarters of a percent. Wall St bank earnings were very strong – Wells Fargo was the top riser on the S&P 500, up 7%, while Citi and Bank of America posted decent gains though JPM fell 2% as Jamie Dimon warned of more ‘cockroaches’ in the private credit market following the collapse of subprime auto lender Tricolor and car parts supplier First Brands. JMP took a $170mn hit from the Tricolor collapse.
Fed chair Jay Powell indicated the central bank could be close to nearing a point where it can stop reducing the size of its bond holdings, and hinted at more rate cuts on the way. Gold rose to a fresh record high.
SPX – bounced clean off the trendline on Friday as support held just at the 6,500 and the rally on Monday ran up against the 20-day line around 6,666. Yesterday we saw the 50-day line tested on the downside around the 6,550 level and this held so now we look to see if we can track back up the channel but those two SMAs look to offer some interesting
Reeves is also reportedly looking again at slashing the allowance for cash ISAs to boost investment in UK equities. It will take a lot more than tweaking around with allowances for retail investors to do this. And I'm not sure about the second order effects – do you move up the risk curve or just plump for less tax efficient cash rates? This has been discussed a lot already but suffice to say a stick is maybe not as good as a carrot.
Oil blockade: Trump did not seem to be dialling back the trade rhetoric. “I believe that China purposefully not buying our Soybeans… is an Economically Hostile Act. We are considering terminating business with China having to do with Cooking Oil, and other elements of Trade, as retribution”.
European stock markets opened marginally higher in early trade on Wednesday. The FTSE 100 is largely tracking sideways after the latest pullback, but is still up 2% in the last month. LVMH gave a boost to the luxury sector with shares popping 12% as it reported organic growth for the first time this year. Burberry shot 6% higher on the read across from the French firm’s results, while Kering was 7% higher. LVHM saw solid demand in Europe and Asia and noticeable improvement in purchasing trends in Asia, except in Japan. The lift sent the CAC up 2%. Paris was also trading higher and French bond yields lower as newly reappointed PM Lecornu said he’d ditch President Macron’s flagship pension reforms in a frantic bid to pass the budget for 2026.
Wall Street was slightly lower Tuesday with tech leading the decline as trade war tremors continue to be felt across markets. Nvidia slipped over 4% to drag the Nasdaq Composite down three-quarters of a percent. Wall St bank earnings were very strong – Wells Fargo was the top riser on the S&P 500, up 7%, while Citi and Bank of America posted decent gains though JPM fell 2% as Jamie Dimon warned of more ‘cockroaches’ in the private credit market following the collapse of subprime auto lender Tricolor and car parts supplier First Brands. JMP took a $170mn hit from the Tricolor collapse.
Fed chair Jay Powell indicated the central bank could be close to nearing a point where it can stop reducing the size of its bond holdings, and hinted at more rate cuts on the way. Gold rose to a fresh record high.
SPX – bounced clean off the trendline on Friday as support held just at the 6,500 and the rally on Monday ran up against the 20-day line around 6,666. Yesterday we saw the 50-day line tested on the downside around the 6,550 level and this held so now we look to see if we can track back up the channel but those two SMAs look to offer some interesting
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