Quarterly Outlook
Q3 Investor Outlook: Beyond American shores – why diversification is your strongest ally
Jacob Falkencrone
Global Head of Investment Strategy
Access both platforms from your single Saxo account.
London Quick Take – 24 September – Defence stocks get a lift from Trump as equity markets retreat
Neil Wilson
Investor Content Strategist
Note: This is marketing material. This article is not investment advice, capital is at risk.
There is obviously a bit of a concern about how sustainable a deal is where you invest $100bn and the company immediately uses that money to buy your products. Where is the market?
Mining stocks in the US - The US seeks an equity stake in Lithium Americas while renegotiating a $2.3bn DOE loan, with Reuters saying up to 10%. Its Thacker Pass mine is a top US lithium deposit. Shares were up 78% in postmarket. It comes after the MP Materials deal. I flagged this back in April.
Quantum stocks showed no signs of slowing down - Rigetti up 11% and D-Wave up 7% to extend a sharp rally 2-week rally. That’s after IonQ, another stock in the space, reported a “significant quantum internet milestone”.
Gold traded firmer but was a little off yesterday’s record highs. China is said to be pushing central banks to buy and store gold in the country via the Shanghai Gold Exchange.
Key Points
- Defence stocks rise after Trump comments on Ukraine, Russian incursions to Nato airspace
- Nvidia pares back gains following its $100bn investment in OpenAI
- UK growth is slowing ahead of the Budget
- Quantum stocks extend rally amid broad optimism for the sector
Stocks in London were down early doors on Wednesday with the FTSE 100 testing the 9,200 level, down about a third of a percent, after nudging around the 9,260 area yesterday. Defence stocks were among the big gainers after Donald Trump agreed Nato countries should shoot down Russian aircraft that violate their airspace, and backed Ukraine to reclaim all its territory lost to Russia - with EU funds of course. Babcock and BAE Systems both climbed over 1%, bucking a Europe-wide downturn for equity markets. Likewise, whilst the DAX fell half a percent Rheinmetall rallied almost 2%. Leonardo was up similarly in Italy and Saab rose 4%. Nato seems ready to shoot down the next incursion – Turkey shot one down in 2015and WW3 was averted. I would be surprised if Russia heeds the warning – expect a big pullback in equity markets - ex-defence, which would surge - if a Russian jet is downed, but this should be treated as an opportunity. Utilities and defensive names are also firmer in London, while financials and anything cyclical lead the decliners this morning. I'm not convinced banks would do all that badly from war though...
UK growth is slowing – yesterday's flash composite PMI fell to a 4-month low. The good news is that price pressures are easing and this should make the Bank of England readier to cut rates this year – markets are way too hawkish on the BoE right now and Pimco is right to say the UK won’t be a big outlier on inflation (FT), whatever the OECD is saying. Sterling should have further to fall.
Wall Street closed down on Tuesday, snapping a three-day win streak as Fed chair Jay Powell warned that equity markets were “fairly highly valued”. There is also some chatter about a possible government shutdown on 30 September.
Tech led the declines with the Nasdaq composite down almost one percent, while the S&P 500 closed half a percent lower, with Nvidia shares -2.8% a day after it announced a $100 billion investment in OpenAI. Amazon fell 3% and Tesla was down 2%. Oracle was down more than 4%.
UK growth is slowing – yesterday's flash composite PMI fell to a 4-month low. The good news is that price pressures are easing and this should make the Bank of England readier to cut rates this year – markets are way too hawkish on the BoE right now and Pimco is right to say the UK won’t be a big outlier on inflation (FT), whatever the OECD is saying. Sterling should have further to fall.
Wall Street closed down on Tuesday, snapping a three-day win streak as Fed chair Jay Powell warned that equity markets were “fairly highly valued”. There is also some chatter about a possible government shutdown on 30 September.
Tech led the declines with the Nasdaq composite down almost one percent, while the S&P 500 closed half a percent lower, with Nvidia shares -2.8% a day after it announced a $100 billion investment in OpenAI. Amazon fell 3% and Tesla was down 2%. Oracle was down more than 4%.
There is obviously a bit of a concern about how sustainable a deal is where you invest $100bn and the company immediately uses that money to buy your products. Where is the market?
Mining stocks in the US - The US seeks an equity stake in Lithium Americas while renegotiating a $2.3bn DOE loan, with Reuters saying up to 10%. Its Thacker Pass mine is a top US lithium deposit. Shares were up 78% in postmarket. It comes after the MP Materials deal. I flagged this back in April.
Quantum stocks showed no signs of slowing down - Rigetti up 11% and D-Wave up 7% to extend a sharp rally 2-week rally. That’s after IonQ, another stock in the space, reported a “significant quantum internet milestone”.
Gold traded firmer but was a little off yesterday’s record highs. China is said to be pushing central banks to buy and store gold in the country via the Shanghai Gold Exchange.
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