Finance Insights Vol 9

admin Insight

Author — Martin Young, CEO of Farringdon Asset Management

Global Macro Review

  • Major market hit all time highs while crude slips slightly.

S&P 500

5222

FTSE 100

8444

Gold

USD 2353

Crude oil (WTI)

USD 78.41/Barrel

US Markets

  • US expanded the last chips act financing last week.
  • There are plans between US, Europe, Japan and South Korea to pump 81 billion new chip plans.
  • Chips production is ramping up steadily.
  • US hiked China EV tariffs from 27% to 102%. Tesla may benefit from this.
  • Europe may follow suit to hike tariffs after moves by US hiking tariffs.
  • Farringdon view is to watch semi-conductor ETF closely as plans to increase chips production is likely to lead to semiconductor valuation crashing over the next year or two.

UK Markets

  • Major drivers of UK market is that the UK economic growth grew by 0.6%
  • The growth bumps UK out of recession.
  • There are speculations that UAE energy company attempt to buy out BP has failed. Deal is off the table.
  • This sent BP share price up.
  • FTSE is dominated by commodities company.
  • The rise in commodities company valuation has led the FTSE 100 to reach all time high levels.

Chinese Markets

  • Currently, Chinese government is pumping more stimulus into the market.
  • The Chinese government issued ultra duration bonds up to 50 years’ worth 138 billion.
  • Government is using the cash for fiscal stimulus.
  • Farringdon view is that stocks look good in short term while stocks should face headwind in mid to long term with tough economic prospects.

Russia War

  • Putin replaced it defence minister.
  • The new defence minister is in favour of mass state intervention.
  • There is a possibility that Russia may run out of ammo by end of next year.
  • Probability of peace talk by end of next year is high.

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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.

Finance Insights Vol 9