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London Quick Take – 21 Oct -Apple surges on iPhone sales to lead Wall Street higher, UK government borrowing in a pickle
Neil Wilson
Investor Content Strategist
Note: This is marketing material. This article is not investment advice, capital is at risk.
Finally, UBS sounds bullish on global equities: “We think investors should review current allocations to equities and ensure they are at least consistent with, or modestly higher than, their long-term strategic asset allocation targets. If investors are currently under allocated to equities, we believe they should reallocate excess cash, bond, or high yield credit holdings toward stocks.”
“We prefer areas that are exposed to secular growth, like the US, China, (particularly China’s tech sector, which we rate among the Most Attractive sectors globally), as well as global technology, transformational innovations (AI, Power and resources, and Longevity), and pockets with clear catalysts that could drive earnings upgrades (Japan and global banks).”
Companies
Earnings today come thick and fast – 3M, Coca-Cola, GE Aerospace, Verizon, Lockheed Martin, General Motors and Netflix.
Unilever fell almost 1% as it pushed back the timetable for its ice cream split due to the government shutdown.
BitMine Immersion Technologies announced purchasing an additional $820mn of ethereum, takings its total holdings to around 3.2mn tokens – worth about $13bn currently. Its share price implies a market cap of over $15bn, suggesting limited premium in the stock price for now.
Morgan Stanley raised its price target on Opendoor Technologies but is still not exactly bullish, going to a Street high $6 from $2 with the stock last at $7.37. This is definitely one where retail is at odds with Wall Street.
I had a look at tomorrow's earnings from Barclays.
Key Points
- Apple surges to record high on robust iPhone 17 demand
- S&P 500 closes gap to 9 October closing price, day before trade-inspired selloff
- Netflix reports earnings after the closing bell; LMT, KO, GM and MMM among major stocks reporting
- UK government borrowing rises in blow to chancellor ahead of the Budget
Budget watch: UK borrowing figures are a horror story – the highest in the financial year to date since the pandemic. And for what? The economy is growing, supposedly, so where is all this excess required? I can think of a few things that we do not need to have. It means that such headroom Reeves had is gone, it means that fiscally we are in a dire mess, and it means that tax rises are not just assured, but I feel it is likely that the government feels the only course of action is to break a manifesto pledge to raise income tax (or NICs or Vat). Without pulling on one of these big three levers the government risks asymmetric growth impacts from squeezing particular interest groups like businesses, or the rich, or the property market, say. It also risks having to come back for more again – somehow Reeves pulled off the trick of doing one of the biggest tax grabs in history last year whilst simultaneously being one of the biggest fiscal loosenings ever.
Gilt yields are steady this morning as US Treasuries rallied, pushing the 10yr Treasury yield down below 4%, which is acting as an anchor for the moment. Cable continues to slide to the downside after Friday’s rejection of the 50-day SMA at 1.347, with the 20-day now acting as near-term resistance around 1.340. UK equities are trading with a slight bullish bias, the FTSE 250 up marginally (+0.2%) and the FTSE 100 also higher at +0.3% in early trade.
Gap filled – the S&P 500 rallied 1% to close the gap from the steep nosedive on Friday 10 October. It finished Monday at 6,735, exactly matching the closing price from 9 October, the day before the drop. On that day the market opened at 6,740 and hit a high of 6,762 that day before closing down 2.7% at 6,552. The S&P 500 sits 0.3% below its 8 October record high. Apple shares rallied 3.9% to a record high, helping to lift the broad market and pushing the Nasdaq Composite up a solid 1.37%, on reports showing iPhone 17 sales are booming.
Japanese equities rallied to a fresh record as Sanae Takacihi was confirmed as Japan’s first female prime minister. She’s credited as being a ‘fiscal dove’ and for stimulus measures to boost the economy. The Nikkei 225 nearly hit 50k for the first time before paring gains on the session to finish just 0.15% higher.
Elsewhere, gold rallied to another record before paring gains as investors bought the Friday dip...bitcoin fell to $108k this morning after rallying the broad risk-on wave on Monday.
Gilt yields are steady this morning as US Treasuries rallied, pushing the 10yr Treasury yield down below 4%, which is acting as an anchor for the moment. Cable continues to slide to the downside after Friday’s rejection of the 50-day SMA at 1.347, with the 20-day now acting as near-term resistance around 1.340. UK equities are trading with a slight bullish bias, the FTSE 250 up marginally (+0.2%) and the FTSE 100 also higher at +0.3% in early trade.
Gap filled – the S&P 500 rallied 1% to close the gap from the steep nosedive on Friday 10 October. It finished Monday at 6,735, exactly matching the closing price from 9 October, the day before the drop. On that day the market opened at 6,740 and hit a high of 6,762 that day before closing down 2.7% at 6,552. The S&P 500 sits 0.3% below its 8 October record high. Apple shares rallied 3.9% to a record high, helping to lift the broad market and pushing the Nasdaq Composite up a solid 1.37%, on reports showing iPhone 17 sales are booming.
Japanese equities rallied to a fresh record as Sanae Takacihi was confirmed as Japan’s first female prime minister. She’s credited as being a ‘fiscal dove’ and for stimulus measures to boost the economy. The Nikkei 225 nearly hit 50k for the first time before paring gains on the session to finish just 0.15% higher.
Elsewhere, gold rallied to another record before paring gains as investors bought the Friday dip...bitcoin fell to $108k this morning after rallying the broad risk-on wave on Monday.
Finally, UBS sounds bullish on global equities: “We think investors should review current allocations to equities and ensure they are at least consistent with, or modestly higher than, their long-term strategic asset allocation targets. If investors are currently under allocated to equities, we believe they should reallocate excess cash, bond, or high yield credit holdings toward stocks.”
“We prefer areas that are exposed to secular growth, like the US, China, (particularly China’s tech sector, which we rate among the Most Attractive sectors globally), as well as global technology, transformational innovations (AI, Power and resources, and Longevity), and pockets with clear catalysts that could drive earnings upgrades (Japan and global banks).”
Companies
Earnings today come thick and fast – 3M, Coca-Cola, GE Aerospace, Verizon, Lockheed Martin, General Motors and Netflix.
Unilever fell almost 1% as it pushed back the timetable for its ice cream split due to the government shutdown.
BitMine Immersion Technologies announced purchasing an additional $820mn of ethereum, takings its total holdings to around 3.2mn tokens – worth about $13bn currently. Its share price implies a market cap of over $15bn, suggesting limited premium in the stock price for now.
Morgan Stanley raised its price target on Opendoor Technologies but is still not exactly bullish, going to a Street high $6 from $2 with the stock last at $7.37. This is definitely one where retail is at odds with Wall Street.
I had a look at tomorrow's earnings from Barclays.
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