By Jamie McGeever
ORLANDO, Florida, June 11 (Reuters) – Wall Street staged its biggest bounce in two months on Thursday, and oil and bond yields tumbled, after U.S. President Donald Trump canceled planned strikes on Iran and said a peace deal could be signed as soon as this weekend.
In my column today, I look at why the record-breaking SpaceX IPO could leave retail investors high and dry. Retail’s share of this IPO is unusually high, and history shows big tech listings are often followed by market volatility and hefty drawdowns. It’s a risky cocktail.
If you have more time to read, here are a few articles I recommend to help you make sense of what happened in markets today.
1. Trump cancels U.S. strikes on Iran, citing progress in talks
2. Wall Street buckles up for SpaceX liftoff, hoping for a glitch-free ride
3. Anthropic v. OpenAI: Behind the bitter battle for the future of AI
4. ECB raises rates to nip war-led inflation in the bud
5. ‘Global euro’ needs more joint debt to pass muster: Mike Dolan
Today’s Key Market Moves
• STOCKS: Asia narrowly mixed, Europe rises, Wall Street’s main indices up between 1.9% and 2.5%.
• SECTORS/SHARES: Eight of the 11 S&P 500 sectors rise: tech, industrials, materials all +3% or more. Energy -2%. “SOX” chip index +8%, biggest rise since April last year. Micron Technology +12%, Intel +9%, Boeing +6%. Oracle -9%.
• FX: Dollar dips, USD/CAD above 1.40 for first time in seven months. EM FX rallies – Brazil real +1.5%, South African rand +2%.
• BONDS: U.S. yields down 8-9 bps across the curve. 30-year auction pretty weak, with tail of around 2 bps.
• COMMODITIES/METALS: Oil -3%, gold +2%.
Today’s Talking Points
* 24 hours from liftoff
The countdown to SpaceX’s record-breaking IPO is almost over, with shares to start trading on Friday. Some of the numbers are familiar by now – $75 billion market debut, total $1.75 trillion IPO valuation, said to be 4x oversubscribed, 30% allocated to retail investors.
So are the optimistic forecasts from some of the big investment banks, like a 100x increase in AI revenue by 2030, or total sales hitting $3.4 trillion by 2040. Total revenue last year was $18.7 billion. Time will tell, but one thing is for certain – Friday’s trading will be frenetic.
* Lagarde-vous
The European Central Bank raised interest rates by 25 bps on Thursday, the first G4 central bank to counter the spike in war-fueled inflation with monetary tightening. The central banks of Australia and Norway have already moved, and the Bank of Japan is expected to follow next week.
Traders are pricing in two more ECB hikes this year, and leaning towards a third early next year. Many economists say the ECB’s new inflation forecasts and President Christine Lagarde’s guidance are fully consistent with three more hikes. Either way, the ECB is taking a more hawkish stance than the Fed. For now.
* The (not so) beautiful game
The World Cup is underway, a five-week festival of football, the sport which Brazilian legend Pele famously christened “The Beautiful Game”. But the World Cup is big business and an intensely political spectacle, so has its uglier side too.
Fans are being priced out of games, the boost to tourism is looking weaker than expected, and some fans – even officials from some countries too – have been denied entry to the U.S. And will there be any issues with Iran’s U.S.-based matches? Let the beautiful games begin.
What could move markets tomorrow?
• Developments in the Middle East
• New Zealand manufacturing PMI (May)
• Japan industrial production (April)
• India inflation (May)
• European Central Bank policymaker Martin Kocher speaks
• Germany inflation (May, final)
• UK industrial production (April)
• Brazil inflation (May)
• U.S. University of Michigan consumer sentiment, inflation expectations (June, prelim)
• U.S. SpaceX IPO
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Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.
(Reporting by Jamie McGeever; Editing by Nia Williams)
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