Author — Martin Young, CEO of Farringdon Asset Management

Global Macro Review

• Major markets recovered slightly at the end of the trading week.

• Markets dipped substantially at the start of the week due to inflation data unexpectedly increasing.

• Gold rose to all time high levels of USD 2,400.

• Drivers are China consumers, investors and central bank buying gold as a hedge to uncertainty and threats of decline in US interest rates.

US Markets

• A bloomberg pulse survey suggests that the S&P 500 will continue to grow, backed by better US corporate earnings release.
• It has been most positive since October 2022 which was a month before the S&P 500 last turn positive.
• The Dollar remained strong in 2024. The dollar index gained 4% Year to date despite racking a larger debt.
• Drivers are due to the surging US bond yields which have reached nearly 5%.
• With signs of AI rally nearing its end, Nvidia and Super Micro Systems plummeted on Friday.
• TSMC shares also dipped 13% as the company cuts 2024 earnings expectations.
• Mark Zuckerberg warned that computing power is no long and issue for AI model training.
• However, the main issue os power demand.
• Despite Elon Musk attempt to sell full self-driving system, Tesla shares were down sharply from USD 170 to USD 147 over the past 5 days.

European Markets

• Bank of England mentioned that the United Kingdom outlook is more like the European Union rather than the US.
• UK inflation data came in hotter than expected at 3.2%
• Target for UK inflation remains at 2%
• The FTSE 100 is on a 4 day winning streak which is best performing since February 2024.
• It looks likely that the 8000 target will be met.
• Farringdon view is that there is not much room for growth for the FTSE 100 as it reaches it approaches the peak price of about 8100.

Farringdon Market View

• The Fed will maintain interest rates to combat inflation.
• Rate cuts may happen towards the second half of the year (June or later)
• Advisors should take profit from investment like Nvidia.

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Farringdon Capital Ltd is incorporated in the Dubai International Financial Centre (DIFC) under number 4190, and regulated by the Dubai Financial Services Authority (DFSA).

The information contained in this document is for information only and should not be taken as a recommendation to buy or sell. Investors are reminded that past performance is no indication of future performance.