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 – 25 September – Was Monday the top? FTSE slides after mining-led rally, Babcock shooting straight
Neil Wilson
Investor Content Strategist
Note: This is marketing material. This article is not investment advice, capital is at risk.
Babcock – one of the big defence plays that rallied 4% yesterday – says trading in the first five months to 31 August 2025 was “encouraging”, with the group delivering organic revenue growth and underlying operating margin progress in line with expectations.
Halma raised full-year guidance after making strong progress in the first half. The health tech company says it will deliver low double digit percentage organic revenue growth this financial year, an improvement on previous guidance for upper single digit percentage growth.
HSBC said it had used IBM’s Heron quantum processor for a better understanding of the probability that corporate bonds would sell at a given price, potentially enhancing market efficiency. The experiment delivered up to 34% improvement in predicting the probability of winning customer inquiries in the European corporate bond market...could be taken as a positive for the space (RGTI, QBTS, QUBT, IONQ).
Alibaba shot up 8% on its new AI model - China AI is keeping pace. At the same time Nvidia faltered, coming under pressure for a second day on the back of the OpenAI investment news. Oracle slipped on reports it’s raising up to $15bn in debt.
Lithium Americas soared on news of the White House stake, helping to push up the Global X Lithium & Battery Tech ETF. US new home sales hit their highest in three years - iShares U.S. Home Construction ETF (ITB) rallied. Micron didn’t too much after earnings beat – but it had been posting a series of record highs going into the print.
Amazon – which has had a tough year relative to some of the other Mag7 – won an upgrade. Wells Fargo went to buy from hold and raised its PT on the stock to $280. Morgan Stanley cut Adobe and upgraded ServiceNow. Like fellow Software-as-a-service stock Salesforce, it’s been a difficult year for Adobe.
Meta - Instagram now has 3 billion monthly active users, CEO Mark Zuckerberg said on his account on Wednesday.
Key Points
- FTSE 100 gives back mining-led rally
- Copper prices surge
- Sterling wobbles on weak gilt auctions and BoE comments
- Wall Street falls for 2nd day in a row
The FTSE 100 looks a touch delicate after yesterday's mining binge has produced a bit of a hangover, with little pain relief coming from the US as Wall Street notched a second day of losses.
Yesterday, Antofagasta led a charge by miners on the FTSE 100 to lift the index out of the early morning slump, shooting up about 9% after Freeport-McMoRan set out the production impact from the suspension of its Grasberg Block Cave mine in Indonesia, the world’s second largest copper mine. The firm said it would lower third-quarter consolidated sales by approximately 4% for copper and 6% for gold compared to its July estimates. Q4 production will be even worse, with output of copper and gold seen as "insignificant" compared to previous forecasts of 445mn pounds of copper and 345,000 oz of gold. Copper prices surged as a result of the update, lifting all boats. The rally for miners – Anglo American and Glencore also rose smartly – was enough along with the gains in defence stocks to prevent the FTSE sliding, with the index closing up 0.3% at 9,250.
This morning, stocks opened a bit lower in London, with broad weakness across European equity markets tracking declines on Wall Street yesterday. The FTSE 100 fell around half a percent to wipe out Wednesday’s gains despite some further modest gains for the miners, although Antofagasta is giving back a bit and precious metals miners Fresnillo and Endeavour slipped as gold moved quite a bit lower yesterday. Defensive heavyweights are seeing some bid, with Shell up only a touch as crude oil hits a three-week high, but otherwise it's about 80/20 decliners to risers.
The S&P 500 declined for a second day, dropping 0.28% as it pulls back from its record high of 6,693.75 hit on Monday. Concerns about a possible government shutdown may be ratcheting up the risk a bit – reports in Politico that the White House has instructed agencies to prepare for mass firings – so-called reduction-in-force plans. There is certainly reason to believe that the Trump administration is a) prepared to play hardball and b) prepared to use a shutdown to lower government spending.
Are things rolling over? This is a classic grind higher - but AI bubble worries are all to see. Was Nvidia's $100bn deal with OpenAI the top? It could be. Yardeni points out that the S&P 500 forward price-to-earnings ratio is at a near record high of 22.8 - the tech bubble burst after it reached a peak of 25.0 in late 1999. Q3 earnings season is almost upon us and could be again surprisingly good.
Sterling was down yesterday but recovering a touch this morning after BoE governor Andrew Bailey hinted at further cuts...like I keep saying the market is way too hawkish on what the MPC does now. The 50-day SMA around 1.3470 is now acting as resistance for cable bulls. It's not just the Bank of England in focus though as there are signs of weakness from a couple of recent gilt auctions suggesting investor doubts creeping in ahead of the Budget...watch gilts.
Yesterday, Antofagasta led a charge by miners on the FTSE 100 to lift the index out of the early morning slump, shooting up about 9% after Freeport-McMoRan set out the production impact from the suspension of its Grasberg Block Cave mine in Indonesia, the world’s second largest copper mine. The firm said it would lower third-quarter consolidated sales by approximately 4% for copper and 6% for gold compared to its July estimates. Q4 production will be even worse, with output of copper and gold seen as "insignificant" compared to previous forecasts of 445mn pounds of copper and 345,000 oz of gold. Copper prices surged as a result of the update, lifting all boats. The rally for miners – Anglo American and Glencore also rose smartly – was enough along with the gains in defence stocks to prevent the FTSE sliding, with the index closing up 0.3% at 9,250.
This morning, stocks opened a bit lower in London, with broad weakness across European equity markets tracking declines on Wall Street yesterday. The FTSE 100 fell around half a percent to wipe out Wednesday’s gains despite some further modest gains for the miners, although Antofagasta is giving back a bit and precious metals miners Fresnillo and Endeavour slipped as gold moved quite a bit lower yesterday. Defensive heavyweights are seeing some bid, with Shell up only a touch as crude oil hits a three-week high, but otherwise it's about 80/20 decliners to risers.
The S&P 500 declined for a second day, dropping 0.28% as it pulls back from its record high of 6,693.75 hit on Monday. Concerns about a possible government shutdown may be ratcheting up the risk a bit – reports in Politico that the White House has instructed agencies to prepare for mass firings – so-called reduction-in-force plans. There is certainly reason to believe that the Trump administration is a) prepared to play hardball and b) prepared to use a shutdown to lower government spending.
Are things rolling over? This is a classic grind higher - but AI bubble worries are all to see. Was Nvidia's $100bn deal with OpenAI the top? It could be. Yardeni points out that the S&P 500 forward price-to-earnings ratio is at a near record high of 22.8 - the tech bubble burst after it reached a peak of 25.0 in late 1999. Q3 earnings season is almost upon us and could be again surprisingly good.
Sterling was down yesterday but recovering a touch this morning after BoE governor Andrew Bailey hinted at further cuts...like I keep saying the market is way too hawkish on what the MPC does now. The 50-day SMA around 1.3470 is now acting as resistance for cable bulls. It's not just the Bank of England in focus though as there are signs of weakness from a couple of recent gilt auctions suggesting investor doubts creeping in ahead of the Budget...watch gilts.
Companies
Babcock – one of the big defence plays that rallied 4% yesterday – says trading in the first five months to 31 August 2025 was “encouraging”, with the group delivering organic revenue growth and underlying operating margin progress in line with expectations.
Halma raised full-year guidance after making strong progress in the first half. The health tech company says it will deliver low double digit percentage organic revenue growth this financial year, an improvement on previous guidance for upper single digit percentage growth.
HSBC said it had used IBM’s Heron quantum processor for a better understanding of the probability that corporate bonds would sell at a given price, potentially enhancing market efficiency. The experiment delivered up to 34% improvement in predicting the probability of winning customer inquiries in the European corporate bond market...could be taken as a positive for the space (RGTI, QBTS, QUBT, IONQ).
Alibaba shot up 8% on its new AI model - China AI is keeping pace. At the same time Nvidia faltered, coming under pressure for a second day on the back of the OpenAI investment news. Oracle slipped on reports it’s raising up to $15bn in debt.
Lithium Americas soared on news of the White House stake, helping to push up the Global X Lithium & Battery Tech ETF. US new home sales hit their highest in three years - iShares U.S. Home Construction ETF (ITB) rallied. Micron didn’t too much after earnings beat – but it had been posting a series of record highs going into the print.
Amazon – which has had a tough year relative to some of the other Mag7 – won an upgrade. Wells Fargo went to buy from hold and raised its PT on the stock to $280. Morgan Stanley cut Adobe and upgraded ServiceNow. Like fellow Software-as-a-service stock Salesforce, it’s been a difficult year for Adobe.
Meta - Instagram now has 3 billion monthly active users, CEO Mark Zuckerberg said on his account on Wednesday.
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