In summary
• Markets suffer a risk-off finish to last week on fresh COVID nerves
• A good German election result for business, but ‘debt brake’ fiscal reform still uncertain
• Generative Artificial Intelligence bellwether Nvidia is the focus for markets this week
• Two anniversary dates and a reminder of the importance of staying invested
Markets suffer a risk-off finish to last week on fresh COVID nerves
US equity markets saw a risk-off finish to the week last Friday. It followed investor attention on a report about a new coronavirus discovery in bats, from the infamous Wuhan Institute of Virology laboratory in Wuhan, China. According to the ‘Cell’ scientific journal website that reported the story the virus (named ‘HKU5-CoV-2’) has not been detected in humans yet, but this virus apparently enters cells using the same gateway as the Covid-19 virus. It was enough to fray investor nerves ahead of the weekend, helping to drag the US S&P500 equity index down -1.71% on Friday to post its worst day of 2025 so far. By contrast, in Europe equity markets closed before the worst of the US slump with the pan-European STOXX600 equity index ending up +0.52% on Friday, both in local currency price return terms. In US stock futures markets earlier this morning, there was a part recovery in sentiment underway, with US equity futures indices S&P500 and NASDAQ100 both around a half percent higher.
A good German election result for business, but ‘debt brake’ fiscal reform still uncertain
Following the German federal election yesterday, the provisional results have confirmed a victory for the centre-right Christian Democratic Union of Germany (CDU)/ Christian Social Union in Bavaria (CSU) parties with 28.6% share of the vote. That is not enough for outright control, so a coalition is needed. The CDU/CSU parties have ruled out forming a coalition with the second leading party – the far-right Alternative for Germany (AfD) (20.8%). That leaves coalition negotiations likely around the centre-left Social Democratic Party (SPD) (16.4%), and the Greens (11.6%). In terms of a calculation of seats in parliament for a governing majority, a co-called ‘Grand Coalition’ between the CDU/CSU and SPD would be seen by most political watchers as a positive for German business interests in aggregate – however, they would be short of the two-thirds majority needed to overturn the country’s fiscal ‘debt-brake’ rule so there is still some uncertainty around this for now.
Generative Artificial Intelligence bellwether Nvidia is the focus for markets this week
It is hard to overstate just how important the results from Nvidia will be this week when they are announced on Wednesday after the US market close. While more than 400 constituent companies within the US S&P500 equity index have already reported, the spotlight will be on results from Nvidia, the world’s second largest stock by market capitalisation and the generative Artificial Intelligence bellwether. While Nvidia shares have rallied over the month following the initial China-DeepSeek fallout, in comparison the stock has been somewhat rangebound since November. Three key factors for investors will be: (i) the pace of shipments of the company’s latest Blackwell generative artificial intelligence chip; (ii) the outlook for Blackwell’s successor chip, Rubin; and (iii) how the company are managing supply chain issues which have at times been flagged in previous results.
Two anniversary dates and a reminder of the importance of staying invested
Today sees two anniversary dates: it is three years to the day since the 2022 Russia-Ukraine conflict started with Russia’s invasion, and five years since the Covid-19 pandemic first started to seriously hit financial markets. Despite these and other headwinds in recent years, including of course the fastest and biggest hike in interest rates around the world in decades, equity markets have enjoyed strong cumulative performance over the past five years. Despite a difficult 2022, the MSCI World (developed markets) equity index in total return sterling terms has seen two years out of the past five (across 2020-2024) where annual calendar returns have been in excess of +20%, and four years out of the past five where returns have been above +10%. What should we take away from this? Navigating the ups and downs of financial markets can be daunting, but while staying invested when markets are volatile might seem counter intuitive, it can arguably be the best way to not crystalise losses and avoid portfolio underperformance over the longer-term.
Contact us
0203 418 0257
info@onekc.co.uk
References
Source: https://www.brooksmacdonald.com/individuals/resources/insights/weekly-market-commentary-generative-artificial-intelligence-bellwether-nvidia
Weekly Market Commentary: Generative Artificial Intelligence bellwether Nvidia is the focus for markets this week
In summary
• Markets suffer a risk-off finish to last week on fresh COVID nerves
• A good German election result for business, but ‘debt brake’ fiscal reform still uncertain
• Generative Artificial Intelligence bellwether Nvidia is the focus for markets this week
• Two anniversary dates and a reminder of the importance of staying invested
Markets suffer a risk-off finish to last week on fresh COVID nerves
US equity markets saw a risk-off finish to the week last Friday. It followed investor attention on a report about a new coronavirus discovery in bats, from the infamous Wuhan Institute of Virology laboratory in Wuhan, China. According to the ‘Cell’ scientific journal website that reported the story the virus (named ‘HKU5-CoV-2’) has not been detected in humans yet, but this virus apparently enters cells using the same gateway as the Covid-19 virus. It was enough to fray investor nerves ahead of the weekend, helping to drag the US S&P500 equity index down -1.71% on Friday to post its worst day of 2025 so far. By contrast, in Europe equity markets closed before the worst of the US slump with the pan-European STOXX600 equity index ending up +0.52% on Friday, both in local currency price return terms. In US stock futures markets earlier this morning, there was a part recovery in sentiment underway, with US equity futures indices S&P500 and NASDAQ100 both around a half percent higher.
A good German election result for business, but ‘debt brake’ fiscal reform still uncertain
Following the German federal election yesterday, the provisional results have confirmed a victory for the centre-right Christian Democratic Union of Germany (CDU)/ Christian Social Union in Bavaria (CSU) parties with 28.6% share of the vote. That is not enough for outright control, so a coalition is needed. The CDU/CSU parties have ruled out forming a coalition with the second leading party – the far-right Alternative for Germany (AfD) (20.8%). That leaves coalition negotiations likely around the centre-left Social Democratic Party (SPD) (16.4%), and the Greens (11.6%). In terms of a calculation of seats in parliament for a governing majority, a co-called ‘Grand Coalition’ between the CDU/CSU and SPD would be seen by most political watchers as a positive for German business interests in aggregate – however, they would be short of the two-thirds majority needed to overturn the country’s fiscal ‘debt-brake’ rule so there is still some uncertainty around this for now.
Generative Artificial Intelligence bellwether Nvidia is the focus for markets this week
It is hard to overstate just how important the results from Nvidia will be this week when they are announced on Wednesday after the US market close. While more than 400 constituent companies within the US S&P500 equity index have already reported, the spotlight will be on results from Nvidia, the world’s second largest stock by market capitalisation and the generative Artificial Intelligence bellwether. While Nvidia shares have rallied over the month following the initial China-DeepSeek fallout, in comparison the stock has been somewhat rangebound since November. Three key factors for investors will be: (i) the pace of shipments of the company’s latest Blackwell generative artificial intelligence chip; (ii) the outlook for Blackwell’s successor chip, Rubin; and (iii) how the company are managing supply chain issues which have at times been flagged in previous results.
Two anniversary dates and a reminder of the importance of staying invested
Today sees two anniversary dates: it is three years to the day since the 2022 Russia-Ukraine conflict started with Russia’s invasion, and five years since the Covid-19 pandemic first started to seriously hit financial markets. Despite these and other headwinds in recent years, including of course the fastest and biggest hike in interest rates around the world in decades, equity markets have enjoyed strong cumulative performance over the past five years. Despite a difficult 2022, the MSCI World (developed markets) equity index in total return sterling terms has seen two years out of the past five (across 2020-2024) where annual calendar returns have been in excess of +20%, and four years out of the past five where returns have been above +10%. What should we take away from this? Navigating the ups and downs of financial markets can be daunting, but while staying invested when markets are volatile might seem counter intuitive, it can arguably be the best way to not crystalise losses and avoid portfolio underperformance over the longer-term.
Contact us
0203 418 0257
info@onekc.co.uk
References
Source: https://www.brooksmacdonald.com/individuals/resources/insights/weekly-market-commentary-generative-artificial-intelligence-bellwether-nvidia
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