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European stocks finish the week with more records

Traders study their monitors

It’s been another day of record highs for European markets, with the DAX breaking above 16,000 for the first time, the Stoxx 600 setting another record, and the FTSE 250 pushing above 23,800. The CAC 40 is also closing in on its own record high, a level that it reached in September 2000.


If investors are concerned about rising delta variant cases globally there’s little evidence that it is prompting any undue worry, although markets in Asia have been a little more cautious.

The FTSE 100 has also managed to make progress making a new 18 month high, and posting its fourth successive weekly rise, its best run of gains since last November. Babcock is among the outperformers after agreeing to sell its Frazer Nash consultancy unit for £293m.

The tug of war for Vectura has seen management recommend shareholders accept a £1bn bid from Philip Morris International, in what is proving to be a controversial decision, given PMI’s position as a major tobacco manufacturer. The deal has prompted criticism from a range of health charities, and while one can understand the reservations around the optics and ethics of the deal, the reality is that there is a need for progress to be made in the development of medicines and devices to deal with breathing problems especially with the prevalence of covid-19.

It’s all too easy to resort to self-righteous criticism when it comes to who can and can’t invest into new technologies whether it be renewables, or whether it be in other areas such as medicine. Vectura is currently in a partnership with UK-based Inspira to develop an inhalant base drug to deal with Covid-19, with one criticism being that PMI might be seen to profit from treating the very illnesses its products have created. That may well be true, but is that a reason to prevent the deal from happening and arriving at a solution quicker. That’s like saying a criminal can’t be rehabilitated for past crimes.

Ultimately for all the heat and light being generated by this contentious topic it will be up to a majority of Vectura shareholders to decide, and it’s unlikely to be an easy decision.   


US markets opened modestly higher as we come to the end of another record-breaking week for the Dow and S&P 500, with yet more record highs for both.   

Expectations over Disney’s Q3 numbers were already high heading into the summer season, with the reopening of the parks even with the lower capacity constraints and higher costs that were likely to come with that. Even with those high expectations Disney was able to meet and beat them. Q3 revenue came in at $17.02bn, while profits came in at $0.80 a share, both beating expectations. The parks division generated operating income of $356m, however the company said it was still seeing disruption in film and TV production. The extra costs involved in this are expected to reach $1bn. A range of new content helped Disney+ beat expectations on new subscribers, coming in at 116m, above expectations of 113.1m.

Airbnb latest Q2 numbers have seen booking surge on pent up demand, while also reporting a surprisingly positive sales outlook for Q3, although it was below market expectations. Q2 gross bookings came in at $13.4bn, generating quarterly revenue of $1.3bn, a 10% gain from the same period a year ago, as 83.1m total bookings were made. Leading into the numbers, expectations were for this to remain steady. Its US domestic market has driven this rebound in demand, with its international markets continuing to struggle. The company reported a loss of $0.11 a share, beating expectations of a loss of $0.36 a share.  

The prospect that the CDC will approve a wholesale booster shot program has given the likes of Moderna and BioNTech a lift in a week that has seen the shares fluctuate wildly over concerns around their valuations.  


We were all set for another pretty decent week for the US dollar, which only hit a four month high a couple of days ago, as markets become more comfortable with the prospect of the US Federal Reserve tapering its bond buying program before the end of the year. We’ve since seen it take a little bit of a pullback today after the weakest Michigan consumer confidence number since 2011, saw some US dollar selling kick in. This has been reflected in US yields, which have slipped back today but are still on course to finish higher for the second week in a row.

The Swiss franc has been the worst performer this week, while the pound has also slipped back due to concerns about the resilience of the Q2 bounce back in economic activity.


Gold prices started the week by flash crashing to a one-year low on Monday, largely as a result of low and thin liquidity, however the fall was short lived and we’ve spent most of this week looking to unwind those losses, with this afternoons weak US Michigan consumer confidence taking us all the way into positive territory as yields and the US dollar dropped back sharply.

Concern about crude oil prices has seen the US government criticise OPEC+ for not reversing all of the production curbs that were brought in at the start of the pandemic. We’ve also seen the EIA warn about demand due to concerns about the spread of the delta variant in Asia. This has seen oil prices tread water after the big losses last week.

It’s been another decent week for bitcoin, three weekly gains in succession, and its best run since February, as it consolidates above $40,000, with ethereum also becoming increasingly comfortable above $3,000.

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