Quarterly Outlook
Equity outlook: The high cost of global fragmentation for US portfolios
Charu Chanana
Chief Investment Strategist
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London Quick Take – 11 June - US and China Strike Preliminary Deal
Neil Wilson
Investor Content Strategist
Note: This is marketing material. This article is not investment advice, capital is at risk.
On this topic, Meta is investing $15bn for a 49% stake in data-labelling firm Scale AI, as part of efforts to bolster its position in artificial intelligence.
Tesla's robotaxi launch is being pushed back to June 22nd...it will probably be postponed again. It’s just not ready. Meanwhile, it looks like the lawyers have been busy... Elon Musk says he regrets some of the social media posts he made last week as part of his public dust-up with Donald Trump.
GameStop shares slipped after-hours trading after missing on revenues. Q1revenues declined 17% to $732.4 million, lower than analyst estimates of $754.2 million, seemingly on weak physical game sales. But...Nintendo Switch 2 sales are booming with 3.5mn units sold in its first four days. And one on AIM for you – Frontier Developments, which is behind the Planet Coaster, Planet Zoo and Jurassic World Evolution game franchises, jumped 17% after a 25% leap in revenues and strong improvement in profits. Market cap is about £123mn...could be takeover target for one of the big American firms?
Commodity scores on the doors...silver 13yr high, platinum 4yr high, cattle record high, sugar 4yr low...US rig count 4yr low and US Energy Information Administration says US oil production is set to decline next year for the first time since the pandemic, edging lower to 13.3 million barrels per day from 13.5 million barrels this year, largely as lower prices discourage new well completions.
London Quick Take – 11 June - US and China Strike Preliminary Deal
Key Points
- US and China agree framework deal to restore truce
- Tesla delays robotaxi launch to 22 June
- Musk ‘regrets’ some social media posts made about Donald Trump
- GameStop misses on earnings
- FTSE closes in on record high
US and China reached a preliminary chips-for-minerals agreement on implementing the Geneva consensus on trade relations, with US negotiators confident that the rare earth minerals and magnets issues will be resolved. Delegations will present the proposal to their leaders for approval and subsequent implementation. Chinese media don’t seem to have been crowing about it but Chinese equity markets rallied.
We’re not seeing a major reaction in stock markets. This is all about the two sides realising what they cannot do without – it's not a breakthrough on tariffs – just an agreement to uphold the temporary truce that was agreed in Switzerland. And a ‘good’ outcome from the talks had been largely discounted by markets over the last couple of days with Wall Street rising for a third day on Tuesday. And for US markets, it’s not just about trade – there is key inflation data coming today.
The FTSE 100 caught some bid early Wednesday to press up against its record closing high but overall moves appear muted for now. Financials, miners and housebuilders were among the top risers early doors as the Footsie starts to look like it’s bursting to make a break higher. Trade optimism is a tailwind of sorts, but probably more than anything it’s just about flows...only need small flow diversion from US to UK to really boost the market.
Companies
WPP – really interesting story here as outgoing CEO Mark Read offers up a warning on how the ad industry is racing to get to grips with AI before it replaces huge swathes of the sector...an industry on the cusp of making itself irrelevant?
On this topic, Meta is investing $15bn for a 49% stake in data-labelling firm Scale AI, as part of efforts to bolster its position in artificial intelligence.
Tesla's robotaxi launch is being pushed back to June 22nd...it will probably be postponed again. It’s just not ready. Meanwhile, it looks like the lawyers have been busy... Elon Musk says he regrets some of the social media posts he made last week as part of his public dust-up with Donald Trump.
GameStop shares slipped after-hours trading after missing on revenues. Q1revenues declined 17% to $732.4 million, lower than analyst estimates of $754.2 million, seemingly on weak physical game sales. But...Nintendo Switch 2 sales are booming with 3.5mn units sold in its first four days. And one on AIM for you – Frontier Developments, which is behind the Planet Coaster, Planet Zoo and Jurassic World Evolution game franchises, jumped 17% after a 25% leap in revenues and strong improvement in profits. Market cap is about £123mn...could be takeover target for one of the big American firms?
Commodity scores on the doors...silver 13yr high, platinum 4yr high, cattle record high, sugar 4yr low...US rig count 4yr low and US Energy Information Administration says US oil production is set to decline next year for the first time since the pandemic, edging lower to 13.3 million barrels per day from 13.5 million barrels this year, largely as lower prices discourage new well completions.
MSFT – first golden cross (50DMA above 200DMA) in a couple of years
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