Positive signs of a more balanced growth in global activity are emerging, with a focus on industry and geography rather than solely relying on the US service industries. The Eurozone is showing signs of improvement in activity, led by service industries, supported by low unemployment rates and improvements in real wages against a backdrop of moderate inflation. This has led to optimism among investors who are hoping for interest rate cuts from the ECB in June.
The DAX and KAC indices have both shown positive growth, up 0.5% and 0.2%, respectively. In contrast, the POTSI index has seen only modest growth compared to other indices. Rafi Gozlan, Chief Economist at IBI Investment House, notes that there is a return to horizontal improvement in global activity following a negative trend in the second quarter due to increasing bond yields and moderated expectations for interest rate cuts in the US.
In Asian markets, the Nikkei index has recovered after a recent decline, while the Shanghai and Hang Seng indices have fallen slightly. In the US, Wall Street indices closed higher on Friday, with Tesla seeing a significant jump following CEO Elon Musk’s announcement of the Robotaxis project. Berkshire Hathaway continues to be a major player in the investment market, with significant holdings in companies like Apple.
Quarterly reports are due this week, with investors hoping for strong corporate earnings across various sectors and regions. In the US debt market, government bond yields rose due to rising inflationary pressures and uncertainty about future policy actions by the Federal Reserve. The commodity market also saw fluctuations as oil prices spiked due to fears of security escalation with Iran while gold prices reached record highs driven by geopolitical tension and high US interest rates.
The AI market is undergoing transformation as Jefferies predicts Microsoft as a big winner in the generic AI market but analysts like Gil Luria and Deutsche Bank are less optimistic about Nvidia’s future growth potential. The upcoming publication of important figures such as the consumer price index and producer price index will impact market trends across various sectors and regions.
Overall, while there are mixed positive and negative trends across various indices, stocks, bonds, foreign exchange markets
