Update Equities: Geopolitics and defence
Following US strikes in Iran, the question remains on what’s next for the Israel/Iran war or whether a sustainable ceasefire has been agreed. Meanwhile, global leaders met in the Hague for a high stakes Nato summit, where increased defence spending was a key discussion.
Despite escalating tensions, global equity markets rose this week, driven by the US and emerging markets, while European markets remained broadly flat. The energy sector was hurt by volatile oil and gas prices amid a lower-than-expected consumer confidence report and geopolitical uncertainty. The shares of many oil major and energy services companies suffered.
Leading semiconductor-design company Nvidia reached an all-time high following the company’s annual general meeting. At the meeting, Nvidia’s CEO reiterated strong demand for artificial intelligence and the company’s related growth opportunities.
This week, pharmaceutical company Novo Nordisk continued its poor year-to-date performance, caused by the termination of the partnership between Novo Nordisk and the telemedicine platform Hims & Hers. Novo accuses its former partner of the illegal “mass compounding” of its drug and misleading marketing around unauthorized versions of Wegovy, its flagship treatment for obesity. While this means a loss of one of its distribution channels, the move aims to protect patient safety.
Shares in steel maker Arcelor Mittal remained flat as markets showed complete indifference to the company’s announcement to abandon some of its green initiatives. The company, one of the biggest emitters of CO2 emissions in Europe, stated that the business case to convert two large German steel plants to green production was lacking, even turning down subsidies offered for the transformation.