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Good evening,
Risk assets rallied in the US as markets reopen following the Memorial Day holiday with leading stock indices gaining >2%, after Trump agreed over the weekend to delay the 50% tariffs on the EU until July 9. Equities in continental Europe had a strong recovery on Monday after the steep initial drop last week when Trump surprised with a June 1 tariff deadline. Today, Trump said that talks with the EU were progressing in a positive direction, and sentiment continues to be driven by the President’s almost daily announcement on tariffs.
In the US, consumer discretionary and IT were the outperforming sectors with gains of almost 3% and included Tesla’s 7% (best performer among large caps) jump despite car sales in Europe plunging 50% in the past month. (AP)
The risk on sentiment on Tuesday sent the $ higher and bond prices ended firmer while gold fell sharply (2%). 30-yr UST yields finished sub 5% as the long-end of the yield curve shifted lower by 9 bp. Crude oil is trading range bound and fell modestly today ahead of tomorrow’s OPEC+ ministerial meeting. The agenda is expected to focus on assessing current market conditions and discussing potential adjustments to oil production levels. WTI is trading at $61, down 14% YTD. (F24)
In economics, US durable goods orders fell 6.3% MoM, a steep drop from the previous month and the worst in 10 months, but not as weak as anticipated. The poor print was mostly driven by a 51% decline in nondefense aircraft and parts orders. Excluding transportation items, durable goods rose marginally in April. (WSJ)
French HICP inflation rose by 0.60% YoY, the slowest since late 2020 and below estimates.
In corporate deals, PE firms TPG and Blackstone offered $16bn (inc. debt) to acquire US health group Hologic Inc (HOLX). Shares rallied 14% to a total market cap of $14bn. Hologic rejected the approach but if the deal finally goes through it will become one of the largest LBOs of the year. (FT)
Salesforce (mcap $265bn) is buying cloud data management company Informatica (INFA, mcap $7.2bn) to expand in A.I., for $8bn in cash. Shares in Informatica rallied 6% today. (CNBC)
Trump Media & Tech Group, the parent of the Truth Social platform plans to raise $2.5bn to buy Bitcoin. Shares fell 10% to a mkt cap of $5.1bn. (NYT)
Day ahead data: FOMC Minutes of its last meeting, Richmond Fed Mfg Index and 5-yr UST auction.
See you tomorrow.
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