Carlsquare weekly market letter: Turnaround could last until year-end

Read the weekly market letter here:

Carlsquare weekly market letter

• Falling interest rates have boosted equities ahead of the reporting period. It is still a trader’s market where momentum went positive after the US jobless claims report last Friday. From a technical point of view, it can last to year-end.
• S&P500 earnings are expected to rise sharply in Q4 2023. Therefore, corporate guidance after Q3 results will be more important than usual.
• We see that Swedish banks should continue to report strongly in Q3 2023 and are therefore worth buying. The same applies to engineering companies that focus on long-cycle products, such as Atlas Copco and Volvo.
• The trigger for lower rates in the US was lower oil prices (WTI in the graph below), which fell after last week’s unexpected inventory build-up. Lower oil prices have an impact on inflation expectations and interest rates.

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