Barclays says the next phase for equity markets will be determined by upcoming Big Tech earnings and a series of central bank meetings. The bank warned that rising oil prices and bond yields have reached levels where downside risks are becoming more pronounced, with Brent crude climbing back to around $100 per barrel and pushing inflation expectations higher. Barclays expects the Federal Reserve to leave rates unchanged next week but emphasize its fight against inflation, while the European Central Bank has indicated another rate increase remains possible at its September meeting. The Bank of Japan is also expected to attract significant attention following recent hawkish signals, a shift Barclays said is reminiscent of the summer 2024 carry trades unwind episode. The bank recommends a more defensive approach and the use of portfolio hedges, noting that the margin for error is low at current market levels.
Barclays PLCBarclays itself is the source of the analysis, recommending defensive positioning and hedges, which could benefit its advisory business.
Alphabet Inc Class CBarclays says Big Tech earnings will drive markets, but no specific mention of Alphabet; central bank policy could affect tech stocks broadly.