Author — Martin Young, CEO of Farringdon Asset Management

Global Macro Review

• FTSE 100 is at all time high level driven by BHP takeover attempt of Anglo-American Mining.

Copper Valuations

• Current copper valuation is over USD 10,000 a tonne due to a decline in mines BHP will control after the takeover of Anglo-American Mining.
• Copper is now seen as the final obstacle for EV revolution after other EV related metal supplies have massively improved.
• Farringdon View on Copper is that there will be short term shortages and potential increases in price soon.

US Markets

• The S&P rallied by 2.6% last week.
• The magnificent 7 has contributed to S&P 500 rally even though bond yields have rose.
• Market expectation for magnificent 7 earnings is an increase of 36% vs 1% for the rest of the market.
• Markets may see no interest rate cuts in 2024 as markets witness 3 straight months of rise in inflation.
• However, market is still projecting one or two rate cuts for 2024, down from 6 at the start of the year.
• The Fed has stopped unwinding its balance sheet as they have start to borrow money.
• This is to prevent market turmoil which happened in UK under Lizz Truss mini budget.
• The US is running unsustainable budget deficit which increase last year to over 6% of GDP despite low unemployment and high growth.
• US debt to GDP is on the same levels with Italy, behind Japan.

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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.