United States
Traders in the United States began the week with caution, as equity markets showed minimal movement while awaiting developments from trade negotiations between the U.S. and China, currently taking place in London. The S&P 500 edged higher by 5 points, or 0.09%, to close at 6,005, with gains across five sectors. The Dow Jones Industrial Average was flat at 42,761, while the Nasdaq Composite added 61 points, or 0.31%, to finish at 19,591.
Despite the subdued overall index performance, several large-cap stocks experienced notable price swings. Amazon climbed 1.60% after announcing a $20 billion investment in artificial intelligence infrastructure and data centres in Pennsylvania. Alphabet (Google) also moved higher, up 1.67%, following positive analyst commentary on the company’s outlook. In contrast, Apple shares fell 1.21% to $201.45 after its annual Worldwide Developers Conference revealed only incremental updates to its product line and AI strategy, disappointing investors who had anticipated more significant developments. Tesla continued its recovery from last week’s sharp sell-off, gaining 4.55% on the day.
In corporate restructuring news, Warner Bros. Discovery announced plans to split into two separate entities—one focusing on studios and streaming, the other on cable television networks. The decision effectively reverses the 2022 merger of Warner Bros. and Discovery. Although the stock initially jumped more than 13% on the announcement, it closed lower by 2.95% at day’s end.
On the economic front, inflation expectations gathered by the New York Federal Reserve showed a decline in May, with the median outlook falling to 3.20% from 3.63% in April—lower than market forecasts. This led to a drop in bond yields, with the 10-year Treasury note falling 4 basis points to 4.47%. Investors are closely watching this week’s Treasury auctions, including 10-year and 30-year bond sales scheduled for Tuesday and Wednesday, as gauges of demand amid rising concerns over the widening U.S. fiscal deficit.
In after-hours developments, U.S. Health Secretary Kennedy announced the removal of all members of the CDC panel advising on vaccines, a move that could have implications for public health policy.
Europe
European equity markets also saw muted movements in low-volume trade at the start of the week. The Euro Stoxx 600 slipped 0.07% to close at 553.24, while the FTSE 100 edged down 0.06% to 8,832. Sector performance was largely flat, with most sectors moving less than half a percent in either direction.
Similar to sentiment in the U.S., European traders were hesitant to adjust positions ahead of any developments from the ongoing trade negotiations in London. However, there was notable corporate news in the UK, as private equity firm Advent made a $5 billion takeover bid for Spectris, a manufacturer of precision equipment and software. Spectris shares surged 60% on the news.
On the monetary policy front, European Central Bank Governing Council member Peter Kazimir stated in a published article that the ECB may be nearing the end of its rate-cutting cycle and should rely on data released during the summer before making further decisions. Bond markets were steady, with yields on 10-year government bonds in Germany and the UK both changing by just one basis point, closing at 2.56% and 4.63%, respectively.
Australia
Australian financial markets were closed on Monday in observance of the King’s Birthday holiday.
Overnight, ASX futures edged lower by 3 points, or 0.03%, though they have gained a total of 26 points, or 0.30%, since Friday’s close. The Australian dollar has traded within a narrow range and begins the week slightly higher at 0.6517 against the U.S. dollar.
Commodities
Oil markets extended their upward momentum at the start of the week, with West Texas Intermediate rising 1.10% to US$65.29 and Brent crude up by 68 cents to US$67.15. The market remains focused on hopes that progress in U.S.-China trade negotiations will offset concerns about potential increases in supply from OPEC+.
Copper gained US$100 to reach US$9,793 per tonne on the London Metal Exchange, despite weaker-than-expected economic data out of China. Chinese exports for May slowed to 6.3%, down from 9.3% in April, with a notable decline in shipments to the United States. Additional data revealed a second consecutive month of falling consumer prices, as CPI dipped 0.1% month-on-month, stoking concerns about deflation. Iron ore prices declined by 65 cents, or 0.68%, to US$94.40.
Gold edged higher by 0.48% to US$3,326, continuing its consolidation pattern. The day’s gains were supported by a weaker U.S. dollar, which fell 0.20% on the Bloomberg U.S. Dollar Index. Silver extended its strong performance, jumping 2.17% to US$36.75—a 14-year high. The all-time closing high for silver remains US$37.65.
Bitcoin continued its rally, climbing 3.6% to trade near contract highs at US$110,080. The latest catalyst came from news that another company is planning to raise funds to invest in the cryptocurrency. This time it is Japanese firm Metaplanet, which announced plans to raise US$5.4 billion for Bitcoin investment. Metaplanet was previously known as a hotel developer.
Economic Calendar
AU:
- Westpac Consumer Confidence (Jun) – 10.30am
- NAB Business Confidence (Jun) -11:00am
US:
- NFIB Business Optimism Index (May) – 9:00pm
This article was written by Paul Darwell, Rivkin Securities Pty Ltd. Enquiries can be made via [email protected] or by phoning +612 8302 3632.
