Daily summary: Donald Trump sets the pace for the market

USA

• Trading at the start of the week in the US took place in a positive mood, with a moderate gain in the broad market and stronger advances in specific market segments. Toward the end of the session, US500 futures are up around 0.5%. Other indices are moving within similar ranges.
• The US President delivered mixed statements on geopolitics and armed conflicts. On one hand, D. Trump noted that the war in Ukraine is “closer to ending than most people think.” At the same time, when asked at a conference about the future of negotiations with Iran, he said that “Iran must sign a deal,” because otherwise “the US will come back and finish the job,” which can be seen as a threat of potential escalation. The market does not appear to be taking these declarations seriously, judging by continued pressure on oil prices and higher valuations of defense companies.

Company news, USA:

• MicroStrategy released regulatory documents indicating that the company continues to sell Bitcoin and that its unrealized losses have already reached USD 8.32 billion.
• Donald Trump spoke positively about Dell’s CEO and encouraged people to buy the company’s products during a Senate hearing. The stock rose by 3 to 4%.
• IREN and TeraWulf gained after announcing cooperation with Anthropic. IREN is to work with Anthropic on building one of the data centers, while TeraWulf signed a long term lease agreement, making one of its sites available.
• Apple (AAPL.US) and Broadcom (AVGO.US): Apple and semiconductor maker Broadcom rose on news of an extended partnership. The agreement is intended to run through 2031 and includes the development of new ASIC chips for Apple.
• SemiAnalysis published a report speculating about delays in the “Kyber” server rack project. Company representatives denied the rumors in an interview with Bloomberg.
• In line with speculation from a few weeks ago, Blue Owl bought a stake in the Cleveland Cavaliers. The company’s valuation is up about 4%.

Macroeconomic data, USA:

• The services PMI came in slightly below expectations (51.2 vs 51.4) but still represents an increase from the previous reading of 50.7.
• The ISM non manufacturing index printed at 54, slightly below market expectations (54.2).

Europe

• The European session is mixed. The balance between demand and supply remains even. Among the leaders of gains in Europe are the UK and Italy, with index futures up about 0.2%.
• Positive sentiment in Europe may be supported by Germany. The federal cabinet approved part of the draft budget for 2027. The budget clearly signals a move away from fiscal conservatism and allocates record amounts to the armed forces and investment.

Company news, Europe:

• NATO Secretary General M. Rutte said at a conference that there is enormous demand and strong order flows for European defense groups, triggering a wave of gains in the sector. Increases in the 2 to 4% range were recorded by, among others, Leonardo, Saab, Hensoldt, Rheinmetall, Thales, Indra, Dassault Aviation, and Safran.
• Talks between easyJet and CastleLake are progressing. The investment firm intends to acquire the UK airline, raising the proposed price to GBP 690 per share, which translates into an almost 10% rise in the company’s valuation.
• Improving sentiment and a series of investment bank recommendations are supporting valuations of European technology companies. ASML is up more than 4%.

FOREX

• In the FX market, among the major currencies the yen is the worst performer and the British pound is the strongest.
  • Goldman Sachs analysts say the pressure on the yen is structural and interventions will not stop the declines. The yen is down about 0.5% against major currencies.
  • The pound is temporarily strengthening on doubts about the yen’s strength and the Fed’s determination, gaining about 0.3 to 0.5%.

Commodities

• Activity in the commodities market is focused on agricultural goods. Cocoa and coffee futures are posting huge gains of more than ten percent. This is linked to heavy rainfall that has blocked roads in West Africa and prevented exports, a consequence of the El Niño phenomenon.

Crypto

• Mixed sentiment dominates the cryptocurrency market. The start of the day was clearly bearish in reaction to MicroStrategy’s regulatory filing, but later comments by Donald Trump at a press conference allowed losses to be more than recovered. Bitcoin ends the day up around 1% and above USD 63,000.