Weekly house view | Roaring Kitty is back

Weekly house view | Roaring Kitty is back

The CIO's view of the week ahead.

The week in review

European “Roaring Kitty”, the social media finance influencer, re-emerged after a three-year hiatus and shares in a video game retailer he previously favoured duly soared, with the company taking the opportunity to announce plans to sell up to 45 mn new shares. In the wider market, signs of a cooling US economy calmed inflation worries, helping all three major US stock indexes rise to record highs. The Dow Jonesi surpassed the 40,000 mark. In Europe, 65% of Stoxx 600ii companies have beaten EPS expectations in the first quarter and, on a local currency basis, European stocks have outperformed their US peers over the last three months. In Asia, Japanese government bond (JGB) yields rose to their highest in more than a decade, as top Japanese companies agreed to wage increases of an average 5.58% and bets grew that the Bank of Japan could raise interest rates in coming months. Now Japanese insurance companies can buy JGBs and match their liabilities in yen.

Quote of the week

“Dealing as Europeans means you need consolidation as Europeans," said French President Emmanuel Macron, calling for consolidation in Europe's banking sector even if that meant a European rival buying a big French bank.

Key data

After accelerating in the first quarter, US inflation slowed to 3.4% on an annual basis in April from 3.5% in March as services and shelter inflation declined. US retail sales were weaker than expected in April. Japanese first quarter GDP contracted by 2.0% quarter-on-quarter annualised. In addition, Japanese GDP growth in the fourth quarter of 2023 was revised down to 0%. In China, growth in industrial production came in at 6.7% year-on-year in real terms, above consensus expectations, but retail sales growth was at only 2.3% year-on-year in April. Euro area GDP grew by 0.3% quarter-on-quarter in the first quarter.

[i] Source: Pictet WM AA&MR, Thomson Reuters. Past performance, Dow Jones Industrial Average index (net 12-month return in USD): 2019, 25.3%; 2020, 9.7%; 2021, 20.9%; 2022, -6.9%; 2023, 16.2%.
[ii] Source: Pictet WM AA&MR, Thomson Reuters. Past performance, STOXX Europe 600 (net 12-month return in EUR): 2019, 27.6%; 2020, -1.5%; 2021, 25.5%; 2022, -10.1%; 2023, 16.5%.
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