General Market News

European space stocks surged on Thursday following SpaceX's filing for a stock market listing on Wednesday. The IPO filing by Elon Musk's company has lifted sentiment across the entire space sector, driving significant gains for satellite and aerospace companies.

• Eutelsat rose 20% while OHB surged 32% during the week following the SpaceX IPO announcement
• The SpaceX listing is described as a 'mega IPO' that is generating positive spillover effects for European satellite stocks
• Traders attribute the sector-wide rally to increased investor excitement about the commercial space industry

The U.K. and Gulf Cooperation Council announced a free trade agreement that Bahrain's industry minister called a 'monumental achievement.' The deal will remove an estimated £580 million ($780 million) in annual duties and is expected to boost the U.K. economy by £3.7 billion ($4.9 billion) yearly over the long term. The agreement makes the U.K. the first G7 country to secure a trade deal with the GCC, whose six member states have a combined GDP exceeding $2 trillion.

• The deal removes tariffs on U.K. exports including cars, turbojets, aerospace parts, cheddar cheese, and chocolate, with £360 million in duties eliminated immediately upon implementation
• The GCC comprises Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE, representing over 57 million people and more than $2 trillion in combined GDP
• The agreement comes during regional tensions from the U.S.-Iran conflict, with Gulf ministers emphasizing the bloc remains 'open for business' and focused on stability and economic growth

U.S. Treasury yields resumed their upward climb on Thursday after a brief respite, with the 10-year note rising over 3 basis points to 4.60% and the 30-year yield advancing to 5.13%. The increase reflects ongoing investor concerns about inflationary pressures, particularly from rising oil prices amid Middle East tensions.

• The 10-year Treasury yield increased more than 3 basis points to 4.6014%, while the 30-year yield rose over 1 basis point to 5.1334%, reversing Wednesday's declines when yields had dropped 6-9 basis points
• Oil prices climbed higher with U.S. crude futures at $99.61 per barrel (up 1.4%) and Brent at $106.42 (up 1.3%), driven by Middle East conflict concerns affecting shipping and energy markets
• Investors await April housing data, with new housing starts expected at 1.41 million (down from 1.502 million in March) and building permits forecast at 1.39 million (up from 1.363 million)

Hedge funds at the Sohn Investment Conference in Hong Kong identified AI infrastructure and Gen Z consumer trends as top investment themes for 2025. Managers highlighted opportunities in AI data centers like CoreWeave, semiconductor supply chain companies such as Taiwan's Compeq Manufacturing, and consumer brands including pet food maker i-Tail Corp and instant noodle producer Samyang Foods. These picks reflect strategies to capitalize on the tech boom and shifting spending patterns among younger consumers.

• AI infrastructure plays include CoreWeave (expected revenue growth from $1B in early 2024 to $55B by 2028), Taiwan's Compeq Manufacturing (PCB maker facing supply shortages, trading below 15x valuation), and Japan's Kandenko (positioned for AI data center construction boom)
• Gen Z consumer trends driving interest in Thai pet food maker i-Tail Corp, as Gen Z spends over $6,000 annually on pets (2.5x more than baby boomers), and South Korea sold more pet strollers than baby strollers last year
• South Korean instant noodle maker Samyang Foods seen benefiting from rapid international sales growth in Europe and U.S., along with margin expansion appealing to younger consumers

ECB policymaker Olli Rehn indicated the central bank may raise interest rates at its June 11 meeting to preserve credibility after oil price spikes from Strait of Hormuz disruptions pushed euro area inflation above the 2% target. However, he noted few signs that high inflation is becoming entrenched, with medium-term inflation expectations still anchored at 2% and wage growth moderating.

• The ECB is expected to hike rates in June, with markets pricing one or two additional moves over 12 months, bringing the deposit rate to 2.50%-2.75%
• While short-term inflation expectations show 'vibration', Rehn sees no significant deviation in medium- to long-term expectations and limited evidence of second-round effects
• The decision will depend on new economic projections and potential U.S.-Iran ceasefire developments, with Rehn urging preparation for prolonged conflict and warning against overly generous fuel subsidies

Retail investors are developing new trading strategies around Trump administration volatility, using acronyms like 'TACO' (Trump always chickens out), 'FAFO' (f*** around, find out), and 'FOMO' (fear of missing out) to navigate rapid policy reversals. These patterns have emerged as markets whipsaw between tariff threats, military actions in Iran, and other geopolitical shocks, creating short-term trading opportunities based on anticipated presidential backtracking.

• Gold has fallen from a record $5,600/oz in January to around $4,500 while oil nearly doubled to $126/barrel on Brent crude, showing a shift from traditional safe-haven assets to energy exposure during geopolitical tensions
• Deutsche Bank's pressure index shows market stress climbed to its highest level in March since Trump's second term began, as investors test how much volatility the administration will tolerate before reversing policy
• Cross-asset whiplash is intensifying as traditional correlations break down, with traders rapidly flipping positions based on headlines while higher oil prices threaten to feed inflation and push bond yields higher

Nvidia, the world's most valuable company at $5.34trn, reported record-breaking quarterly revenue of $81.6bn and profits exceeding $58bn for the three months to April 2026, surpassing Wall Street estimates. The chipmaker, central to the AI boom, forecasts revenue from two chips could reach $1trn by 2027, though concerns persist about customer concentration and circular investment within the AI industry.

• Quarterly profits topped $58bn, more than triple the amount from a year earlier, driven by AI infrastructure demand expected to reach $3-4trn this decade
• Nvidia projects $91bn in sales for the current quarter and believes its Blackwell and Rubin chips could generate $1trn in revenue by 2027
• Concerns remain over reliance on a few major clients (Google, Microsoft, Amazon, Meta) and circular investment patterns where Nvidia invests in its own customers

Wind and solar power combined generated more electricity than gas globally for the first time in April, according to UK think tank Ember. Together, renewables produced 22% of global electricity compared to 20% from gas, marking a significant milestone in the energy transition. The shift reflects a broader trend accelerated by energy security concerns and the economic advantages of renewables over imported gas.

• Combined wind and solar output grew 13% year-on-year globally, with strong gains in China (+14%), the EU (+13%), Britain (+35%), the US (+8%), and Australia (+17%)
• April typically favors renewables due to spring conditions in the Northern Hemisphere, where most solar capacity is concentrated, combining strong wind output with rising solar generation
• The current energy crisis has strengthened the economic case for renewables while adding political urgency to accelerate deployment and reduce reliance on gas imports

UK regulator Ofcom criticized TikTok and YouTube for insufficient child safety measures, finding 73% of 11-17 year-olds were exposed to harmful content over four weeks, primarily through recommendation feeds. While competitors Snap, Meta, and Roblox pledged stronger protections against online grooming, Ofcom said TikTok and YouTube failed to make meaningful new commitments and urged the UK government to strengthen online safety laws.

• TikTok was cited most often for harmful content exposure, followed by YouTube, with their recommendation feeds identified as the main route through which children encounter harm
• Snap, Meta, and Roblox committed to new protections including blocking adult strangers from contacting children by default, AI tools to detect suspicious conversations, and parental controls on messaging
• 84% of children aged 8-12 use services requiring users to be at least 13, highlighting weak age verification enforcement; Ofcom called for clearer legal requirements to keep underage users off platforms

U.S. President Donald Trump is expected to sign an executive order on AI and cybersecurity creating a voluntary framework for AI developers to share models with the government 90 days before public release. The move comes amid growing pressure from MAGA activists for stricter AI oversight following releases of powerful models like Anthropic's Mythos, while tech industry leaders resist mandatory regulations. The debate reflects a split among Trump supporters between populist factions seeking government approval requirements and tech industry advocates favoring voluntary collaboration.

• The voluntary framework would ask developers to provide models to government 90 days pre-release and give pre-public access to critical infrastructure providers like banks
• MAGA activists including Steve Bannon are pressing for mandatory government security tests of AI models, citing concerns that new systems like Mythos and GPT-5.5-Cyber could supercharge cyberattacks
• Tech executives like Marc Andreessen oppose mandatory requirements, arguing that holding back AI models may provide short-term advantage but won't keep technology from adversaries long-term, and that the U.S. needs to deploy AI to strengthen defenses

David Hunter, Chief Macro Strategist at Contrarian Macro Advisors, predicts a severe financial crisis involving an initial 80% market crash followed by 25% inflation in the early 2030s. He forecasts a final parabolic melt-up peaking by Labor Day 2026, with gold reaching $6,800 and silver hitting $180, before a deflationary collapse triggers unprecedented central bank money printing. The crisis stems from unsustainable global debt levels projected to exceed $450 trillion, which cannot be serviced at high interest rates.

• Hunter expects central banks to inject up to $50 trillion globally (with the Fed's balance sheet reaching $30 trillion) to prevent banking system collapse, sparking 25% inflation and interest rates in the high teens by the early 2030s.
• The crisis trigger is expected from overseas leverage, particularly Japan (where 10-year yields hit 2.79%, highest since 1996) and untested private equity/credit exposure in pension funds, rather than originating in the U.S.
• Gold is projected to reach $6,800 before the crash, drop 50% to $3,500 during the deflationary bust, then surge to $20,000 during the subsequent inflationary decade, creating a 'generational buying opportunity' at the bottom.

Federal Reserve policymakers expressed concern at their April meeting that elevated energy prices and Middle East conflict could keep inflation above the 2% target for longer than expected. The Fed held interest rates steady at 3.5-3.75%, with PCE inflation estimated at 3.5% in March, up from 2.8% in February. Three FOMC members dissented, opposing language suggesting a bias toward rate cuts.

• Oil prices have hovered around $100 per barrel (up from $70 before the Iran war) while gas prices surged 43% year-over-year to $4.55 per gallon as of the article date
• Market expectations have shifted toward potential rate hikes, with a 51% probability of rates remaining unchanged through December and 36.7% chance of a 25-basis-point hike
• Three Fed members (Hammack, Kashkari, and Logan) dissented from the April statement, preferring removal of language showing an easing bias amid persistent inflation risks

The European Commission launched a consultation on May 20, 2026, to assess whether its Markets in Crypto-Assets Regulation (MiCA), established in 2024, remains adequate given the rapid evolution of cryptocurrency markets and changing global regulatory landscape. The review invites feedback from stakeholders and the public through August 31, 2026, as a July 1 compliance deadline approaches requiring unauthorized crypto firms to cease EU operations.

• MiCA created a harmonized EU framework governing cryptocurrency assets, stablecoins, and crypto service providers, but regulators question if it fits the 2026 market reality
• The consultation runs until August 31, 2026, and includes both public feedback and targeted technical questions for issuers, service providers, and financial institutions
• A July 1 deadline requires all crypto asset service firms operating in EU member states without proper authorization to close operations

U.S. stocks rallied sharply on Wednesday, with the Dow jumping 640 points (1.3%) as oil prices dropped over 5% and Treasury yields retreated amid easing Middle East tensions and ahead of Nvidia's earnings report. The rally reversed three consecutive days of losses driven by inflation and geopolitical concerns, with technology and semiconductor stocks leading gains.

• WTI crude fell 5.66% to $98.26 per barrel and Brent dropped 5.63% to $105.02 following reports that U.S.-Iran negotiations were in 'final stages', easing supply concerns
• The 10-year Treasury yield declined over 8 basis points after the 30-year yield had reached its highest level since 2007, reducing pressure on high-valuation tech stocks
• Airline stocks rallied on lower fuel costs while energy stocks lagged; Nvidia's earnings report after the close was viewed as a critical test for AI-related spending and tech sector valuations

The U.S. Federal Reserve proposed creating a new type of limited payment account that would allow fintech firms to access the Fed's payment infrastructure while receiving fewer protections than traditional banks. The accounts would not include intraday credit, discount window access, or interest on reserves, as the Fed seeks to balance broader payment system access with financial stability concerns.

• New accounts would grant fintechs access to Fed payment rails without the full safety net available to traditional banks
• Firms with these accounts would be excluded from intraday credit, the Fed's discount window, and would not earn interest on reserves held at the Fed
• The proposal reflects the Fed's effort to expand payment system access while managing systemic risk as non-bank financial firms seek direct access to Federal Reserve infrastructure

Federal Reserve officials grew increasingly hawkish at their April meeting, with a majority indicating potential rate hikes may be needed if inflation persists above the 2% target. The shift is driven by inflation pressures from the US-Israel-Iran war, which has pushed oil prices up over 50%. Incoming Fed Chair Kevin Warsh will inherit a divided committee, with four dissents at the last meeting—the most since 1992.

• April's meeting was the second consecutive gathering where more policymakers favored potential rate hikes over cuts if inflation remains elevated, with many wanting to remove language suggesting future rate cuts
• The Federal Open Market Committee kept rates unchanged at 3.50%-3.75%, but featured four dissents (most since 1992)—one for a rate cut and three against continued dovish language
• Energy prices have surged over 50% due to the Iran conflict, with inflation pressures now spreading beyond energy to wider goods and services categories

The U.S. federal budget deficit is projected to reach approximately $2 trillion in fiscal year 2026, according to Treasury Department and bond market estimates. This would rank as the third-largest deficit in U.S. history, surpassed only by the COVID-19 pandemic deficits of $3.1 trillion in 2020 and $2.8 trillion in 2021. The growing deficit reflects increased spending on entitlement programs and rising interest costs on the national debt.

• The deficit projection of $2 trillion represents an increase from the $1.8 trillion deficit recorded in the previous fiscal year and exceeds earlier Congressional Budget Office estimates
• U.S. public debt surpassed 100% of GDP in April 2025 for the first time since World War II, with the CBO projecting it will reach 108% by 2030 and break the 1946 record of 106%
• Rising deficits are driven by increased spending on Social Security and Medicare as the population ages, plus mounting interest costs expected to top $1 trillion annually

The April 28-29 FOMC meeting minutes revealed a divided Federal Reserve, with a majority of members wanting to remove the easing bias from policy statements amid persistent inflation concerns tied to the Iran conflict and elevated energy prices. While the Fed held rates steady with only one dissent favoring a cut, three members opposed maintaining the easing bias language, and a majority indicated rate hikes could be appropriate if inflation stays above 2%.

• The Fed cited the Middle East conflict as a key driver of asset prices, with near-term inflation expectations rising due to elevated crude oil prices, though longer-term expectations remain anchored near the 2% target through 2027.
• Staff forecast inflation to remain elevated through first half of the year before declining to near 2% by end of 2026, but warned of upside risks given five years of above-target inflation and potential for price pressures to become embedded.
• Stephen Miran dissented in favor of a 25 basis point cut citing overly restrictive policy, while Hammack, Kashkari, and Logan opposed the easing bias. Markets priced in only 30% probability of rate hikes by Q1 2027, with cuts now expected in late 2026 or early 2027.

Federal Reserve officials indicated at their most recent meeting that interest rate hikes would likely be necessary if inflation remains persistently above 2%, according to minutes released Wednesday. The meeting featured four dissenting votes, the most since 1992, reflecting disagreement over policy direction amid inflation pressures from the Iran war. The Fed held rates steady at 3.5%-3.75% but debated whether to maintain language suggesting rate cuts as the next move.

• A majority of Fed officials said policy firming would be appropriate if inflation continues running above 2%, while the Iran war has pushed most inflation measures above 3% and core inflation is expected to reach 3.3% annually in April
• Four 'no' votes were cast at the meeting, the most since 1992, with three regional presidents objecting to language suggesting an easing bias, preferring to keep rate hike options open
• Kevin Warsh has replaced Jerome Powell as Fed Chair, with Powell remaining on the Board of Governors for the first time a Fed chair has done so in nearly 80 years, while markets price in rate hikes by late 2026 or early 2027

The U.K. announced a trade deal with the Gulf Cooperation Council (GCC), becoming the first G7 nation to secure such an agreement. The deal is projected to add £3.7 billion annually to the U.K. economy and increase wages by £1.9 billion per year in the long run. It marks the fifth major trade agreement under Prime Minister Keir Starmer's government.

• The agreement will remove an estimated £580 million in annual duties on U.K. exports to the GCC (comprising Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and UAE), with £360 million eliminated immediately upon implementation.
• British exports including cereals, cheddar cheese, chocolate, and butter will become tariff-free under the deal's terms.
• The deal provides a political boost for PM Starmer amid leadership challenges and economic pressure from the Iran war, following previous agreements with India, the U.S., the EU, and South Korea.