The SpaceX Liftoff

00:00:00: Welcome everyone to Swisscout's daily market talk.

00:00:03: It is Friday, June twelve.

00:00:05: today SpaceX makes its market debut in what becomes the world's biggest IPO by far Meanwhile on earth.

00:00:12: uncertainties regarding the Middle East war don't necessarily improve but US President Donald Trump remains incredibly efficient and driving giving hope to investors.

00:00:23: So we will discuss about that and more, but before Note that the company already made history yesterday by selling million shares priced at one hundred and thirty-five dollars each, raising the seventy five billion US dollars that it was looking for.

00:01:06: And given the company nearly that one point eight trillion dollar valuation that he was aiming for!

00:01:13: It equals a combined value of twenty nine biggest IPOs in U.S history since two thousand adjusted to inflation including Meta Google Hilton Airbnb DoorDash Uber Snowflake NGM.

00:01:28: So yes, it's a huge IPO.

00:01:30: Today everyone will be obviously watching SpaceX leave the lounge pad.

00:01:35: I discussed in detail and yesterdays episodes what to expect from this IPO today And then coming weeks ten months for those who are interested on What The Future Could Be For The Company.

00:01:48: But back to Earth, well it was a good old day yesterday where Donald Trump threatened to hit Iran hard.

00:01:54: Oil spiked, socks fell.

00:01:56: then he said that the countries were close to a deal to extend ceasefire and reopen the Strait of Hormuz following which oil fell in socks rallied.

00:02:06: It was lunatic day To be honest with you.

00:02:09: what's unbelievable is that after three months off this nonsense The markets still move on words That have no substance.

00:02:18: This morning US crit is testing eighty five dollar per barrel level to the downside That it's the lowest levels since early days of the Iranian conflict.

00:02:29: Yet, yet there are no confirmation whatsoever from the Iranian media just yet regarding the ceasefire hopes and There is nothing telling that this time will be the charm.

00:02:40: But US and European futures are in the positive at a time.

00:02:43: I am talking here this morning, we're just before The European Open with European Indices leading gains showing how eagerly and enthusiastically European investors awaited to end of their conflict because the euro area was hit by the European Central Bank's first rate hike yesterday In almost three years To fight inflation that spiked past amid the rising energy prices.

00:03:09: The ECB president, Kristin Lagar said that inflation is spilling over the rest of the economy right now and it's not good news.

00:03:16: And note that yesterday the market action we saw broadly was driven by the falling oil price and not necessarily By the ECBs decision as a benchmark for ten-year European yield fell sharply and equity indices gained after the ECb announced the rate hike.

00:03:34: But the ECbs' rates hike fundamentally bad news for the European economies, and months to come.

00:03:40: A race hike is obviously never good news – it increases the borrowing costs of companies.

00:03:44: And in the particular case of the euro area growth perspectives are already very, very meagre.

00:03:55: I say mega not to say negative because on first quarter this year The Euro Area printed a negative growth figure Of minus point two percent on quarterly basis and situation will probably deteriorate In the second quarter with Iran war-led energy crisis.

00:04:10: And well, another rate hike in September remains very much in play despite the climate weakness.

00:04:15: unless energy prices retreat sustainably over this summer and more worryingly The ECB rate hike will probably not make any difference when it comes to inflation.

00:04:25: A rate hike is very efficient indeed in the context of an economy facing demand-led inflation.

00:04:31: In this case, by raising interest rates and slowing the economy on demand The central banks could tame inflation.

00:04:38: but today's context the inflation comes from an external shock which is the Middle East war and rising energy prices.

00:04:44: so we know beforehand that ECB rate hike or hikes will have a bigger impact on growth than on inflation.

00:04:52: So why does ECB hike raise?

00:04:54: they just can't sit down and watch inflation rise build their target without doing anything.

00:04:59: Remember in two thousand twenty-two, the ECB was criticized for having been too late to react.

00:05:05: but in two hundred eleven fifteen years ago it's made a move actually hike the race two times to cool down rising inflationary pressures at that time And had to walk back that decision Just after few months and cut interest rates again After the european economy fell off the cliff.

00:05:22: So what I'm trying to say here is, monetary policy isn't an exact science.

00:05:27: There are too many factors out there that are in play and they're interacting with each other which makes same decisions echo completely differently across the economies at time T And central bankers have very little control on a clear majority of these factors starting from geopolitical problems.

00:05:44: so today we know whatever the central banks do.

00:05:47: only end of the Iranian war The reopening of the Strait of Hormuz and a sustainable decline in energy prices across the globe could appease global inflationary worries, push central bank hawks out.

00:06:02: Anything less than that will not help!

00:06:04: Because like in the US, inflation spiked past a four percent mark.

00:06:07: We saw it this week increasing the chances that the Fed was expected to cut interest rates prior to the Iranian war will now sit still at its place and best case scenario or hike as well To fight inflation on the second half of this year.

00:06:22: So in summary The positive reaction we saw in European equity markets yesterday may hit a wall if we see oil prices spike again.

00:06:30: for US equities, technology and global technology appetite will say the last word.

00:06:35: And then this'll bring us to next week which we'll be crowded in central bank decisions.

00:06:40: The Bank of Japan is now expected to hide interest rates to slow the bleeding in Japanese yen.

00:06:45: The dollar yen fell sharply yesterday below the one hundred sixty mark after Donald Trump called off attacks on Iran.

00:06:52: But the pair rebounded back past the one-hundred sixteen mark today and remains a very uncomfortable zone for the Japanese officials, but intervention or no.

00:07:01: The only thing that could stop the Yen's bleeding in the middle month is a rate hike from the Bank of Japan ideally next week and then reserve bank of Australia as well.

00:07:10: they expected to hold fire next week after three rates hikes since January on.

00:07:14: the bank of England is expected still too.

00:07:18: software inflation data I was announcing the UK recently has bought policymakers some breathing room But that relief may prove temporary as inflation in the UK will likely re-adjust to reality when the energy cap there is revised and higher energy costs begin feeding through household bills.

00:07:34: In Switzerland, while the Swiss National Bank is safe for now... prices from rising too much.

00:07:54: As such, the low inflation gives a Swiss national bank And indeed, the World Bank predicts that global economy will expand only two point five percent in twenty-six.

00:08:22: That's the weakest pace since COVID-nineteen triggered a recession into thousand and twenty times everything.

00:08:28: in the current context an infinite.

00:08:30: if oil prices come down before Swiss inflation breaches this with national banks to present policy target Switzerland could emerge largely unscathed without lifting finger.

00:08:42: Holy Switzerland.

00:08:43: So this is all for the week, I'm Ipeko Scaradeschkaia and thank you for joining me!

00:08:48: And Thank You For All Your Beautiful And Supportive

00:08:50: Comments!!

00:08:51: I hope This Episode Of Market Talk Has Been Helpful & It Has Been Insightful To You.

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00:09:23: So I will meet again next week to comment the SpaceX iFU and rest of the market.

00:09:29: But until then good day trading have a lovely weekend.

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