Market developments
Equities: Global equity markets endured a turbulent week, with escalating Middle East conflict, surging oil prices and growing skepticism around AI investment returns as dominant themes. Tesla was among the week’s most notable casualties, tumbling roughly 19% after its Q2 earnings missed estimates and free cash flow turned negative for the first time in two years. European equities fared somewhat better: the Stoxx 600 eked out a 0.5% gain, outperforming other global benchmarks, supported by energy and commodity-linked names, while the FTSE 100 rose just under 1%.
Fixed Income: Global bond markets were broadly pummeled this week as surging energy prices rekindled inflation fears and raised the prospect of further central bank tightening. U.K. gilt yields held above 5% for their longest consecutive stretch since July 2008, caught between fiscal uncertainty under new Prime Minister Andy Burnham and the oil-driven inflation shock.
Commodities: Oil was the defining commodity story of the week. Brent crude surged towards and briefly breached $100/barrel as the US-Iran conflict intensified and traffic through the Strait of Hormuz came to a near standstill following Iranian attacks on tankers, including a supertanker managed by Greece’s Dynacom.