After three days of purging in US technology stocks, and palpable nervousness across the most fragile segment of risk assets, the cool-headed members of the financial community have dusted off the expression “healthy consolidation”. In finance, there are two kinds of consolidation. The healthy one, because it does not last too long and has been forgotten six months later. And the other kind, the one that turns into something far less pleasant for asset valuations. The good news is that the first category most often prevails on the stock market, whether it is genuinely healthy or not, for that matter. The word "healthy" implies that the market occasionally indulges in minor excesses, like yours truly, still full of champagne after the opening party for our new Paris offices. Consolidation serves to erase those slightly naughty escapades, but without lasting consequences (provided one has a packet of paracetamol close at hand in the case of a boozy evening).

The problem is that every more serious market sell-off has started with a consolidation. The one troubling investors this week is multifactorial. One after another, investors have lost several anchors of the bull market. On top of that, the usual correlations between certain assets have gone awry. The bet on lower interest rates is uncertain. The bet on the ultimate impact of AI is uncertain. The bet on the rise of cryptocurrencies is uncertain. The best hiding place against such uncertainty, precious metals, is no longer playing its usual role. That is a lot to digest, and it explains the three days of marked decline in the Nasdaq 100.

Beyond the psychological impact of the situation, there are complex mechanics at work. Large downward moves wipe out vast sums of money, which in turn trigger significant changes in investor behaviour: selling assets to offset losses, hedging, cutting risk, or rebuilding strategies that no longer work. Hence a clear snowball effect, especially when volatility produces some fairly crazy price swings (silver losing 25% yesterday, then extending its fall overnight before rebounding by 12% at 6:59am, for example).

Investors are therefore on high alert and perfectly capable of burning today what they were praising just two weeks ago. Not so long ago, it was fashionable to add as many zeros as possible to AI investment projects. That no longer works quite so well. Last night, Amazon announced bumper earnings and took the opportunity to say that it will no longer invest 145 but 200 billion dollars in AI this year. That is no small sum: we move from the GDP of Uzbekistan towards that of Qatar. A staggering amount, then, which has ended up frightening a market that has become less indulgent towards headline-grabbing announcements. They wanna see results.

Exacerbated volatility, therefore, and the final session of the week is already lurching around in all directions. I have no idea what the indices will look like at the close this evening, but everything that happens between now and the end of the session in Europe and in the United States risks being brutal and devoid of any real logic.

Beyond Amazon, other US companies reported earnings last night, with mixed fortunes that I will come back to shortly. In Europe, Sabadell, Orsted, Societe Generale, Vinci and Kone and are in focus today. Anthropic, whose new AI solutions are fuelling fears of a broad loss of value for traditional software publishers, struck again yesterday by announcing an update to its model and additional features, particularly in finance.

We will keep a close eye on all risk assets, especially cryptocurrencies, which are attempting a rebound after several abominable sessions.

In the Asia-Pacific region, Japan closes the final session of the week up 0.8%. Technology-heavy indices such as South Korea’s KOSPI and Hong Kong’s Hang Seng are down a little over 1%, after sinking earlier in the session. Australia is sharply lower, down 2%, dragged down by the pullback in mining stocks that feature heavily in the ASX index. Volatility remains high ahead of the European open, although the trend has improved somewhat as losses in Asia were pared back.

Today's economic highlights:

On today's agenda: the Halifax House Price Index in the United Kingdom; in Germany, exports, balance of trade, and industrial production; balance of trade in France; unemployment rate in Switzerland; the ECB Survey of Professional Forecasters in the Euro Area; in Canada, changes in full-time and part-time employment, unemployment rate, and participation rate; in the United States, the University of Michigan Consumer Sentiment. See the full calendar here.

  • GBP / USD: US$1.36
  • Gold: US$4,849.76
  • Crude Oil (BRENT): US$68.33
  • United States 10 years: 4.19%
  • BITCOIN: US$64,841.4

In corporate news:

  • GSK's better-than-expected Q4 2025 performance led AlphaValue/Baader Europe to maintain a "favorable stance" on the company, highlighting growth in HIV, Respiratory, Immunology, and Oncology sectors.
  • Glencore and Rio Tinto abandon their merger plans.
  • Shell faced a "rare double miss" in Q4 2025, prompting RBC to lower its EPS estimates for 2026 and 2027, while maintaining a sector perform rating.
  • BHP Group is simplifying operations while Rio Tinto explores complex deals, reversing previous investment narratives, according to Morgans.
  • HSBC plans to push out underperforming bankers after a bonus round as it moves toward a performance-linked pay model.
  • Shell CEO Wael Sawan stated that compensation claims from Kazakhstan have negatively impacted the company's investment appetite in the country.
  • Smithson Investment Trust received approval from the Central Bank of Ireland for its Smithson Equity Fund.
  • Zurich Insurance's bid for Beazley could lead to more deals in the insurance sector as companies seek exposure to specialty lines.
  • Bayer announces that its experimental anticoagulant reduces the risk of recurrent stroke by 26% and is undergoing accelerated review by the FDA.
  • The board of directors of Pirelli rejects Sinochem's spin-off plan to end the governance dispute.
  • Shell wants to export Venezuelan gas via Trinidad, according to its CEO.
  • CSG wins a contract worth over $300 million to supply armoured vehicles in Southeast Asia.
  • Allreal acquires an office building in Geneva for £140 million.
  • Hexagon Purus sells its aerospace business to SpaceX.
  • Atlantic Sapphire seeks sources of funding to continue its business until it becomes profitable.
  • Shares rising after hours following quarterly results: Roblox (+7%), Fortinet (+5%), Reddit (+4.5%)…
  • Shares falling after hours following quarterly results: Amazon (-11%), Illumina (-9%), Microchip (-6%), Atlassian (-4.5%)…
  • Hims & Hers sparks price war with low-cost GLP-1 pill, putting pressure on Novo Nordisk and Eli Lilly. Hims fell 11% after hours after the FDA threatened to take action against ‘illegal counterfeit drugs’.
  • Apple scales back plans for new AI-powered health coaching service, according to Bloomberg.
  • Nvidia is delaying the release of its new video game chip due to a shortage of memory chips, according to The Information.
  • Zscaler acquires SquareX to advance Zero Trust browser security.
  • Liftoff Mobile, part of the Blackstone stable, has reportedly postponed its IPO due to deteriorating market conditions.

See more news from UK listed companies here

Analyst Recommendations:

  • Compass Group Plc: Oddo BHF maintains its neutral recommendation and reduces the target price from GBP 28 to GBP 26.
  • Gsk Plc: Shore Capital maintains its buy recommendation and raises the target price from GBX 2300 to GBX 2500.
  • Shell Plc: Piper Sandler & Co maintains its overweight recommendation and reduces the target price from USD 93 to USD 89.
  • Schroders Plc: Jefferies maintains its hold recommendation and raises the target price from GBX 420 to GBX 480.
  • Greatland Gold: Macquarie maintains its neutral recommendation and raises the target price from AUD 13 to AUD 13.30.
  • Diageo Plc: Zacks maintains its underperform recommendation and raises the target price from USD 76 to USD 83.
  • Bunzl Plc: Goldman Sachs maintains its neutral recommendation with a price target reduced from GBX 2470 to GBX 2360.
  • Standard Chartered Plc: BNP Paribas maintains its neutral recommendation and raises the target price from GBX 1700 to GBX 2000.
  • Marks & Spencer Group Plc: Goldman Sachs maintains its buy recommendation and raises the target price from GBX 450 to GBX 470.
  • Wizz Air Holdings Plc: Oddo BHF maintains its neutral recommendation and raises the target price from GBP 11.80 to GBP 13.
  • Bbva: Oddo BHF maintains its outperform recommendation and raises the target price from EUR 23.10 to EUR 23.50.
  • Rheinmetall Ag: UBS maintains its buy recommendation and reduces the target price from EUR 2500 to EUR 2200.