Transcript
A (0:02)
Good morning everyone and welcome to Julius Baer's Moving Markets podcast. It's Thursday the 7th of May and my name is Helen Frear. Filling us in on the latest in financial markets today. I will speak first of all this morning to Bernadette and Dare. And my second guest today will be Norbert Rooker and we'll be talking about energy markets. So that is coming up shortly. But over to you first of all, Bernadette, for the market news. Good morning.
B (0:30)
Good morning, Helen.
A (0:31)
News that the US and Iran were talking about a fresh proposal to end the almost 10 week conflict yesterday eased tensions somewhat and helped global equities erase losses which have been caused by the conflict and push them to new highs. We'd already seen this by the end of the Europe session, hadn't we?
B (0:51)
Yeah, that's right, Helen. The pan European Stoxx 600 index closed 2.3% higher and it was similar elsewhere in Europe. FTSE 100 was up 2.2%, bouncing back from Tuesday's heavy losses. The CAC added almost 3% and the DAX was up 2.2%. All the major sectors except oil and gas stocks finished yesterday's session in the green. Some company specific news. Novo Nordisk raised its annual profit guidance as it revealed its blockbuster weight loss drugs had performed better than expected in the first three months of the year. And the Danish jewellery maker Pandora shares finished up about 15% after first quarter sales beat analysts expectations. And that was despite weak consumer sentiment in the U.S. u.S. Weighing on results. The company's been under pressure from U.S. import tariffs as well as the surge in the silver price which has weighed on margins. But it announced yesterday that it's going to be applying for tariff reimbursement under the International Emergency Economic Powers act in the US Coming back to that possible deal you mentioned, Helen, according to Axios, Washington has presented a one page memorandum of understanding that would gradually reopen the Strait of Hormuz and lift the American blockade on Iranian imports. Detailed negotiations regarding Iran's nuclear program will apparently, apparently come later in the process and nothing has yet been agreed.
A (2:09)
Okay, but if we turn to US markets, it's not just a possible deal boosting markets. About 80% of companies in the S&P 500 index have reported better than estimated earnings in the current season. So I guess it's unsurprising that the rally continued there yesterday too.
B (2:28)
Indeed, Helen. And another positive factor was lower oil prices. Brent crude trading around $102 a barrel that helped to reduce inflation concerns. That's boosting the bond markets and also reviving momentum in the artificial intelligence trade. Ten year treasury yields fell 7.6 basis points to 4.35% yesterday and two year yields fell over 7.5 basis points. And these prospects for lower rates also boosted the appeal of gold, which gained for the third day to trade at around $4,700 an ounce. And the dollar is back where it was at the start of the war. But turning to stocks, The S&P 500 climbed one yesterday. The Nasdaq Composite was up over 2% and both indices reached new intraday and closing highs. The Dow Jones closed up 1.24%. We saw a surge in US artificial intelligence linked stocks. Chipmaker Advanced Micro Devices rose 18.6%. And that was boosted by its latest forecast that the total addressable market for data center computer processing units could reach US$120 billion by 2030, which would mean growing more than 35% ANN annually. ARM holdings was up 13% and the server maker Super Microcomputer Inc. Was up nearly 25%. Stocks did come slightly off their highs after President Donald Trump said the deal is not finalised. And perhaps it's in his words a big assumption that Iran would accept the proposal. But markets were certainly rallying on the back of this.
