Global equities last week continued their recent choppy performance, with a gain of 1.8% in local currency terms reversing a fall of the same magnitude the previous week.
In sterling terms, a strengthening of the pound reduced last week’s increase to 0.8%
Europe, the UK and Japan led the gains, rising 2.0%, 1.7% and 1.4% respectively in sterling terms while the US and emerging markets lagged, with the former up 0.5% and the latter down 0.2%. As has been the case for much of the year, the fortunes of the tech sector were a major factor driving the disparities in regional performance. The last few weeks have been characterised by increased volatility within the tech sector as worries have started to emerge over the sustainability of the surge in earnings behind this year’s stunning performance of the semiconductor chip companies.
The US chip company Micron Technology – yet another tech company with a market capitalisation now over $1tn – fell 14% last week despite releasing stellar results only a few days earlier. This, however, still left the stock up 240% year-to-date. Magnificent Seven bounce back In another sign of the rotations underway within tech as the market continues to seek out both the latest AI hot story and the ultimate AI winners and losers, the Magnificent Seven – which have fallen out of favour this year big time – staged a bit of a come-back last week.