General Market News

More than half of wealthy individuals in Asia-Pacific cite recession as their top concern over the next three years, with nearly half also worried about equity market corrections, according to a Lombard Odier survey. The survey covered over 390 high-net-worth individuals with at least $1 million in investable assets across the region. These concerns come amid global uncertainty including U.S. trade policies and geopolitical conflicts affecting energy prices and inflation.

• Nearly 40% of respondents lack succession planning despite prioritizing wealth preservation, with Japan, Philippines, Malaysia, and Hong Kong among the least prepared markets
• Succession challenges stem from Asian patriarchs retaining control without engaging next generations, who often pursue independent careers and show little interest in taking over family businesses
• The survey was conducted between December 2025 and February 2026, covering more than 390 Asia-Pacific residents with minimum $1 million net investable assets

The FDA's advisory panel will meet Thursday to vote on whether COVID-19 vaccines for the 2026-2027 season should target the dominant XFG variant. The decision comes amid FDA staff concerns about limited data availability, as virologic surveillance and sequencing volumes have significantly declined from state and local public health departments. The meeting proceeds with no membership changes under Robert F. Kennedy Jr., signaling procedural normalcy after recent vaccine policy disruptions.

• COVID tracking data has deteriorated sharply: the CDC's COVID dashboard currently lacks weekly data due to low sequencing submissions, with the most recent update over a month old showing XFG strains accounted for more than half of U.S. cases through April 11.
• The WHO recommended in early May that manufacturers target either the LP.8.1 strain (currently recommended for 2025-26) or other circulating variants like XFG or NB.1.8.1.
• Four COVID vaccines are approved in the U.S. from Moderna, Pfizer-BioNTech, and Novavax-Sanofi, with the protein-based Novavax shot requiring longer manufacturing time than mRNA-based alternatives.

The U.S. and Mexico have begun formal negotiations to revise the USMCA trade agreement, with Washington demanding stronger regional content requirements including a U.S.-specific minimum content level for vehicles built in Mexico. The talks, excluding Canada until late July, aim to boost U.S. manufacturing amid Trump administration tariffs of 25% on autos and 50% on steel that have effectively ended duty-free North American trade.

• The U.S. is proposing new rules requiring a specific minimum percentage of U.S. content in Mexican-built vehicles, beyond the current USMCA requirement of 40-45% content from higher-wage factories (effectively U.S. or Canada)
• U.S. negotiators are pushing for 'melted and poured' steel requirements in North America to receive preferential tariff treatment, aimed at reducing Chinese steel components flowing into Mexican manufacturing
• The USMCA underpins nearly $1.6 trillion in annual trilateral trade, but its future depends on negotiations through late July amid Trump's global tariffs on autos (25%) and steel/aluminum (50%)

China's Shanghai Futures Exchange is designing futures contracts for AI tokens, the building blocks of AI models, as the country races against U.S. exchanges developing GPU compute futures. China's daily token usage has surged 1,000-fold to over 140 trillion by March 2026, driving demand for hedging instruments among AI supply chain companies.

• Shanghai Futures Exchange is in early design stages for token futures contracts, taking a different approach than U.S. exchanges (CME Group and ICE) which are launching GPU compute power futures
• China's daily AI token usage exploded from minimal levels in early 2024 to over 140 trillion by end of March 2026, a 1,000-fold increase
• Chinese experts view token futures as critical to competing with the U.S. in both AI technology and financial markets, with some calling for accelerated launch despite market fragmentation obstacles

Maintenance at Kazakhstan's Kashagan oilfield, which has a capacity of approximately 0.4 million barrels per day, has not yet begun as shareholders continue discussions, according to the country's energy minister. The maintenance is expected to start in early June and last more than 30 days, which will reduce Kazakhstan's overall oil output and exports.

• Kashagan oilfield has production capacity of about 0.4 million barrels per day
• Planned maintenance scheduled to begin in early June and extend for more than 30 days
• The maintenance work will reduce Kazakhstan's total oil output and export volumes during the period

European stocks are expected to open lower on Thursday, with major indices projected to fall 0.6% to 1.1%, as investors assess mixed signals from U.S.-Iran peace negotiations amid ongoing military tensions in the Middle East. Uncertainty stems from conflicting reports about a potential deal and continued U.S. strikes in Iran despite ceasefire discussions.

• U.K. stocks expected to open down 0.9%, Germany down 1.1%, France down 1%, and Italy down 0.6% according to IG data
• U.S. Secretary of State Marco Rubio indicated talks with Iran are 'progressing' while U.S. forces launched fresh strikes in Iran on Wednesday, described as 'defensive' to maintain ceasefire
• Investors await April's U.S. personal consumption expenditure price index at 8:30 a.m. ET, with expectations of 0.5% monthly and 3.8% yearly increase

Foreign investors purchased Japanese stocks for the eighth consecutive week through May 23, investing a net 1.08 trillion yen ($6.77 billion) as the AI boom drove demand for tech-related equities. The sustained inflows reflect growing international interest in Japan's equity market, with foreigners having invested nearly 11.7 trillion yen year-to-date, significantly outpacing last year's 742.1 billion yen for the same period.

• Weekly foreign purchases of 1.08 trillion yen ($6.77 billion) marked a nearly 14% increase from the prior week's 948.4 billion yen
• AI-related stocks led gains, with SoftBank Group surging 17.62% and chip designer Socionext rallying 12.26% following Nvidia's strong revenue forecast
• Foreign investors also bought 1.35 trillion yen of Japanese long-term bonds after the prior week's outflows, attracted by higher yields as the bond selloff eased

Chicago Federal Reserve President Austan Goolsbee stated that energy inflation from the U.S.-Israel war with Iran has proven more persistent than initial forecasts predicted, creating stagflationary pressures particularly for energy-importing Asian economies. Oil prices remain significantly elevated compared to pre-war levels despite recent easing.

• Brent crude traded at $96 per barrel and WTI at $90.21, compared to pre-war levels of $72 and $67.02 respectively, representing substantial sustained increases
• Initial futures market estimates expected energy prices to decline much more than actual levels, indicating forecasting errors on inflation persistence
• Asian economies face an 'old-fashioned stagflationary shock' due to their dependence on energy imports, combining inflation with growth pressures

The U.S. Commodity Futures Trading Commission is seeking to withdraw a $5 million penalty against Gemini Trust Company, the cryptocurrency exchange founded by Cameron and Tyler Winklevoss. The regulator now admits it inappropriately accused Gemini of making false statements, claiming the Biden-era enforcement relied on uncredible whistleblower accounts and that Gemini was actually a fraud victim. The Winklevoss twins each donated $1 million in bitcoin to Trump's 2024 campaign.

• Gemini had settled CFTC charges in January 2025 under the Biden administration, paying $5 million and agreeing to an injunction, but both parties now seek to vacate the settlement citing a shift in crypto enforcement policy under Trump.
• The CFTC and Gemini jointly claim the agency inappropriately leveraged its power by blocking approval for Gemini's prediction market platform (Gemini Titan) while the enforcement action was pending; approval was granted in December 2025.
• According to the joint filing, the CFTC investigation was based on an uncredible whistleblower and ignored that Gemini was the victim of fraud by its former chief operating officer and two customers who received fraudulent rebates.

The Consumer Financial Protection Bureau (CFPB) announced it will relocate approximately 450 employees from regional offices in San Francisco, Atlanta, Chicago, and New York to its Washington headquarters later this year, while ending remote work arrangements. This move is expected to accelerate resignations and further weaken the agency, which the Trump administration has sought to drastically reduce or eliminate since taking office.

• The CFPB has already lost about one-third of its roughly 1,700-person workforce since the administration called for its abolition and froze most agency activities, with the administration now seeking court permission to dismiss about half of remaining workers.
• Starting August 31, all staff located more than 50 miles from headquarters and field employees must report to the new Washington office, with headquarters staff required to work in-office five days a week beginning in July.
• The Trump administration views the CFPB, created by Congress in 2010, as a politicized burden on free enterprise, while Democrats characterize efforts to dismantle it as favoring corporations over consumer protection.

Minneapolis Federal Reserve President Neel Kashkari stated that fighting inflation is his top priority over labor market concerns, as inflation has remained above the Fed's 2% target for over five years while employment remains in 'decent shape.' He warned that prolonged elevated inflation risks unanchoring inflation expectations, which could require more aggressive Fed action.

• Inflation stood at 3.8% in April, with core CPI (excluding food and energy) at 2.8%, well above the Fed's 2% target that has been exceeded for more than five years
• Kashkari emphasized the labor market is currently in 'decent shape,' allowing the Fed to prioritize inflation without immediate employment concerns
• The Fed official warned that if inflation expectations become unanchored and drift higher, the central bank would need to respond 'even more aggressively' to control price increases

Sentiment among UK consumer-facing services businesses dropped to its lowest level since February 2025 in May, according to a Confederation of British Industry survey. Profitability is falling sharply as costs rise faster than prices, forcing firms to cut investment and reduce headcount. Rising inflation is expected to further intensify consumer caution and strain demand.

• Consumer services optimism balance fell to -49 in May from -45 in February, while business services dropped sharply to -46 from -3, marking the lowest since November 2025
• Consumer services profitability declined at the fastest pace since August 2020 as costs outpaced firms' ability to raise prices
• Companies plan to cut capital spending across most categories due to uncertain demand and inadequate returns, with the Bank of England monitoring inflation risks from energy price surges caused by the Iran war

U.S. crude oil inventories declined by 2.8 million barrels in the week ending May 22, marking the sixth consecutive weekly drop, according to American Petroleum Institute data cited by market sources. Gasoline stocks also fell by 3.2 million barrels, while distillate inventories increased by 1.1 million barrels.

• Crude inventories dropped 2.8 million barrels, extending the drawdown streak to six weeks
• Gasoline stocks fell 3.2 million barrels, indicating strong fuel demand
• Distillate inventories rose 1.1 million barrels, countering the declines in crude and gasoline

The White House is reviewing a CFTC proposal to regulate prediction markets like Kalshi and Polymarket, amid a jurisdictional dispute between federal and state authorities. President Trump endorsed the CFTC's exclusive regulatory authority, while former regulator Gary Gensler argues the agency lacks legal authorization under Dodd-Frank to oversee these markets. The conflict may ultimately be decided by the Supreme Court.

• CFTC Chairman scrapped a proposed ban on sports and political betting on prediction platforms on Jan. 29, instead planning to write new regulatory rules for the sector
• Several states are challenging CFTC authority, with New York AG suing Kalshi and Polymarket for allegedly operating illegal gambling, and Minnesota enacting the nation's first state-level prediction market ban
• Former CFTC and SEC Chairman Gary Gensler stated the agency is not authorized under the 2010 Dodd-Frank Act to regulate prediction markets and lacks capacity, arguing states should have regulatory authority instead

The Dow Jones Industrial Average hit a record high on Wednesday, rising 0.37% to 50,650.76, as investors rotated out of semiconductor stocks into defensive sectors like healthcare and consumer discretionary. The S&P 500 and Nasdaq remained nearly flat as the recent AI rally paused, while oil prices fell about 5% to near $88 per barrel amid conflicting reports about Iran's Strait of Hormuz commitments.

• Semiconductor stocks weakened broadly, with the Philadelphia Semiconductor Index retreating from its Tuesday record high; Intel, Qualcomm, and Marvell declined while Micron pulled back from session highs despite remaining above $1 trillion market cap
• US crude oil dropped approximately 5% to near $88/barrel after Iranian state media reported Tehran would restore Strait of Hormuz traffic within one month, though the White House denied the report as 'complete fabrication'
• Investors await Thursday's PCE inflation data (the Fed's preferred measure) for policy clues, while Goldman Sachs raised its 2026 S&P 500 year-end target to 8,000 from 7,600 on continued earnings strength

A new Zillow report identifies the 10 hottest rental markets in the U.S. for summer 2026, with most located in the Northeast and California. These markets face intense competition due to limited housing supply, as the recent construction boom largely bypassed coastal and Northeastern regions despite 2024 recording the highest number of new units built in the past half-century.

• Providence, Rhode Island tops the list with 5% annual rent growth and a 5.1% vacancy rate forecast, while typical rents (ZORI) reach $2,154
• New York City, San Francisco, and San Jose command the highest rents at $3,406, $3,206, and $3,534 respectively, with low vacancy rates between 4.3% and 4.9%
• Chicago shows the strongest rent growth at 5.7% annually, while Milwaukee has the tightest market with just a 3.8% vacancy rate forecast

The Federal Reserve's Inspector General is reviewing the reappointment process for regional Fed bank presidents and their deputies, who serve five-year terms. The inquiry will assess whether the Board of Governors' approval process aligns with Federal Reserve requirements and best practices. Interest in this process has grown amid concerns it could be used to pressure regional policymakers who resist political demands for rate cuts.

• The Fed's board unanimously approved all 11 regional presidents up for reappointment in late 2024, a process that typically sees officials retain their positions
• The 12 regional Fed banks are quasi-private institutions with presidents selected by local private-sector boards, subject to central bank approval
• The review comes as observers fear the reappointment process could be weaponized following President Trump's aggressive pressure campaign against the Fed for interest rate cuts

French utility EDF has postponed the sale of a stake in its Italian subsidiary Edison until 2027 due to ongoing disruptions in liquefied natural gas supplies caused by the Strait of Hormuz crisis. The delay affects EDF's plans to raise cash for nuclear reactor investments, as the Middle East crisis has negatively impacted Edison's business and valuation prospects.

• Edison, Italy's second-largest gas importer, was previously valued at €7 billion to €10 billion ($8-11.6 billion), but the ongoing LNG supply disruptions may significantly affect its valuation
• Edison's Qatar supplier notified the company of cancelled LNG cargoes with force majeure extended to mid-August, impacting a long-term contract for 6.4 billion cubic metres of gas annually
• EDF advisers are revising Edison's business plan to account for LNG disruptions, with potential investor discussions possibly restarting from September 2026

Options traders are placing heavily bearish bets on small-cap stocks ahead of Thursday's U.S. economic data releases, including the PCE inflation index. Put trading activity in the small-cap ETF IWM exceeded 70% of options premium on Wednesday, signaling investor concern about the sector's vulnerability to interest rate movements despite a 40% rally over the past year.

• Put contracts in IWM outnumbered calls nearly 3-to-1, with over 380,000 puts likely bought versus under 270,000 sold, compared to relatively even call/put activity in the S&P 500 ETF (SPY)
• One trader placed an $8 million net bet on a 7% drop in IWM by mid-July, reflecting concerns about small-cap stocks' heightened sensitivity to Treasury yield spikes due to higher percentage of unprofitable companies
• Thursday's economic data slate includes weekly jobless claims, durable goods orders, GDP update, and PCE inflation report, all of which could impact interest rate expectations

PPHE Hotel Group received a £920.9 million ($1.24 billion) takeover proposal from Israel's Fattal Hotel Group at £22 per share, which PPHE considers fair. The offer comes after PPHE launched a strategic review in November, with controlling shareholders holding about 44% of voting rights currently supportive of engagement with Fattal.

• The offer values PPHE at £22 per share, totaling approximately $1.24 billion for the London-listed hospitality real estate firm
• PPHE's controlling shareholders Papouchado and Ivesha, who hold about 44% of voting rights, are engaged in the discussions
• Fattal reserves the right to vary the offer terms, including introducing securities or reducing the £22-per-share price, as negotiations proceed