To The Moon

Last Week's Recap

The US Market - Stocks retreated amid escalating tensions in the Middle East

• The stock market erased modest weekly gains on Friday after Israel launched a wave of airstrikes on Iran. Friday sell-off pushed major indexes into negative territory for the week, The Dow ended the week with a decline of 1.32%. The CBOE Volatility Index (VIX) spiked 24%, reflecting heightened investor anxiety amid the escalating Middle East conflict.

• Brent and WTI crude futures both surged around 12%, with WTI briefly approaching $74 per barrel. Gold prices also climbed to a near two-month high as investors sought safe-haven assets.“If elevated crude prices persist, they’ll have an almost immediate impact on inflation,” said Mark Malek, Chief Investment Officer at Siebert Financial.

• The May CPI and PPI reports came in softer than expected, with core consumer prices remaining flat despite the new Trump tariffs. This may be due to retailers selling down pre-tariff inventory, with the inflationary impact expected to show more clearly this summer.

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The US Sectors & Stocks - Energy stocks spiked

• Energy emerged as the top-performing sector in the S&P 500 this week, advancing 5.7%. Standout names included ConocoPhillips (COP), APA Corp (APA), and Halliburton (HAL), buoyed by a surge in oil prices following heightened geopolitical tensions.

• Defense contractors rallied on Friday after Israel’s airstrikes on Iran—the most significant attack since the Iran-Iraq War. RTX corp (RTX) and Northrop Grumman (NOC) rose around 5%.

• On the flip side, industrials lagged, with the sector down 0.7%. United Airlines (UAL) dropped more than 12%, and GE Aerospace (GE) fell 7%.

• Boeing (BA) shares fell nearly 5% after a tragic Air India Flight 171 crash killed all but one of the 242 people onboard shortly after takeoff.

• Oracle (ORCL) soared nearly 24% to a record high after delivering strong Q4 results and raising guidance, citing accelerating growth in its cloud infrastructure business. CEO Safra Catz projected “dramatically higher” growth in fiscal 2026.

• Circle (CRCL) surged another 24% as investor interest in digital asset-related stocks remained strong. Its momentum followed a stellar debut last week.

• Visa (V) and Mastercard (MA) both dropped nearly 5% after reports that Walmart and Amazon are exploring issuing their own stablecoins, potentially bypassing traditional payment networks and saving on transaction fees.

• Chime Financial (CHYM) jumped 37% in its Thursday IPO debut after pricing above range at $27 per share, signaling strong investor appetite for fintech names.

• Meta Platforms (META) finalized a $14.3 billion investment in Scale AI, acquiring a 49% stake. Scale provides essential data-labeling services for training large AI models. CEO Alexandr Wang will join Meta’s AI division.

• Nvidia (NVDA) announced major European expansions, including two AI data center projects in the U.K. and new partnerships across Europe with governments, telecoms, and cloud providers.

• TSMC (TSM) reported a 40% year-over-year jump in May sales, totaling approximately $10.7 billion, driven by robust AI chip demand—particularly from clients like Nvidia. The strong performance sets a positive tone ahead of Q2 earnings in July.

Hong Kong Market - HSI ended with a small gain

• The Hang Seng Index (HSI) posted a modest weekly gain of 0.4%, buoyed by a temporary easing in U.S.-China trade tensions, despite a pullback on Friday.

• The Hong Kong Exchange is stepping up efforts to attract IPOs from Greater China, Southeast Asia, and the Middle East. With over 160 issuers in the pipeline—double the number since December 2024—it has become the world’s leading listing venue by volume in 2025.

• China Rareearth (00769) surged 69.4% this week, supported by rising rare earth prices, growing optimism around easing export restrictions, and constructive rhetoric from both Chinese and U.S. officials on reaching a potential trade deal.

Singapore Market - DBS topped $100 market value

• Singapore shares fell 0.58% this week, mirroring regional and global declines amid mixed performances from key stocks and external headwinds, including the Air India plane crash impacting sentiment toward Singapore Airlines.

• DBS Group (D05) became the first Singapore bank to surpass $100 billion in market value, supported by a weaker U.S. dollar that boosted local equities.

• A final warning from Singapore’s regulator prompted several unlicensed crypto exchanges to prepare for a rapid withdrawal from the market.

• Singapore Airlines (C6L) dropped 2.1% after the Air India crash, which resulted in significant casualties. SIA holds a 25.1% stake in Air India, pressuring its share price.

• SIA Engineering (S59) rallied 4.8% this week, buoyed by a new contract with Singapore Airlines and Scoot. DBS estimates the deal could raise MRO (maintenance, repair, and overhaul) rates for the SIA Group by high single digits, above previous mid-single-digit expectations.

Australian Market - ASX hit a new high on Wednesday

• The Australian stock market posted a modest gain, with the ASX 200 Index (XJO) rising 0.4% for the week, despite a sharp selloff on Friday. The index briefly hit a record high, capping an otherwise positive week.

• Energy and gold stocks outperformed, fueled by renewed global uncertainty. Soaring oil prices boosted sector leader Woodside Energy (ASX: WDS) by 7.4% to $25.21, while Santos (ASX: STO) rose 3.7% to $6.96.

• Gold miners surged as investors flocked to safe-haven assets. Newmont (ASX: NEM) climbed 5.8%, Evolution Mining (ASX: EVN) gained 5.5%, and Northern Star Resources (ASX: NST) advanced 5.1%.

The Week Ahead

Macro Factors - FOMC and Middle East tensions

• Geopolitical tensions remain front and center, with investors closely watching Iran’s response to recent escalations. Some analysts warn oil prices could spike to $95 per barrel, potentially reigniting inflation concerns.

• The Federal Reserve’s policy decision on Wednesday will be the week’s key event. While the Fed is expected to hold rates steady at 4.25%–4.50%, markets will scrutinize the Summary of Economic Projections—including the updated dot plot—and Chair Powell’s press conference for clues on the timing of potential rate cuts.

• On the economic calendar, May retail sales data will be released Tuesday and may offer fresh insight into consumer strength. Markets will be closed on Thursday for Juneteenth.

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