Oil Prices Plummet as Tensions Between US and Iran Ease
Markets around the world reacted to the de-escalation of tensions between the US and Iran by pulling back on oil prices, with US WTI crude oil falling 6% at the open. The decline came after President Trump's decision to pause bombing of Iran following recommendations from the US CENTCOM Chief that bombing targets were mostly exhausted.
The Strait of Hormuz remained a concern as Yemen's Houthis launched unconfirmed strikes against Saudi Aramco facilities in the Red Sea's Jizan and Yanbu. Despite de-escalation talk on Friday, few vessels have mustered the courage to transit the Strait of Hormuz.
Meanwhile, markets were unmoved by trillion-dollar AI deals announced between US tech giants Nvidia, Broadcom, and Korean conglomerates Samsung, SK Group (SK Hynix & SK Telecom), and Naver. The deals involved circular financing tie-ups, but Korean investors remained unimpressed, with the Kospi falling 0.9% to underperform in Asia.
ChangXin Memory Technologies (CXMT) debuted in Shanghai at CNY49.50/share, a massive 472% increase on its IPO price of CNY8.66/shr, giving it an implied market cap of ~CNY 3.31T (~$485B). Stakeholders in CXMT include Alibaba, Tencent, Midea, Xiaomi, TCL, and GigaDevice.
Looking ahead, markets will be watching for announcements out of China's Poliburo meeting, set to announce economic policy for the second half of the year. Investors will also be keeping an eye on the Fed, BOE, and BOJ rate decisions on consecutive days this week.