Daily News Round Up
Wednesday, 18 Jun 2025
- Geopolitical Risks and Oil Prices are Dominant Concerns: Escalating tensions in the Middle East, particularly regarding potential U.S. action against Iran and the possibility of disrupting oil supply through the Strait of Hormuz, are significantly impacting market sentiment. Oil prices saw volatility, and investor risk appetite decreased, evidenced by a flight to safe-haven assets like gold. (FMP), (FMP), (Seeking Alpha)
- Weakening Economic Data Fuels Rate Cut Expectations: Disappointing U.S. retail sales data (-0.9% MoM) and concerns about mounting national debt are raising fears of an economic slowdown. This has led to a decline in Treasury yields and increased expectations for Federal Reserve rate cuts later in the year, potentially benefiting rate-sensitive sectors. (FMP), (CNBC), (PYMNTS)
- Shifting Investor Sentiment & Fund Manager Positioning: Institutional investors are increasing their selling of U.S. equities while fund managers are pivoting towards international markets, reflecting concerns about valuations and economic prospects in the U.S. Additionally, the most crowded trade remains “long gold”, suggesting continued risk aversion. (Seeking Alpha), (FMP), (Seeking Alpha)
- Tariffs and Trade Policies are Creating Industry-Specific Headwinds & Tailwinds: U.S. tariffs are impacting various sectors, leading companies like Hasbro to reduce headcount and adjust supply chains. While increasing costs for some, they are also prompting companies to diversify sourcing and driving potential benefits for specific sectors like aerospace (due to potential trade deals).(WSJ), (Seeking Alpha), (WSJ)
- Corporate Activity & Sector Divergences Highlight Opportunities & Risks: Significant corporate developments, including Airbus’s increased dividend payout target, Meta’s aggressive AI talent acquisition, and partnerships like Microsoft/AMD, are shaping sector dynamics. Certain sectors, like industrials, are outperforming, while others, such as solar energy, face challenges due to policy changes. (FMP), (FMP), (Market Watch)
What happened yesterday?
Macro
Commodity Prices: Oil prices declined in Asian trade on Wednesday, retracting from a 4% gain the previous session. Brent crude dipped 0.6% to $75.96/bbl, while West Texas Intermediate (WTI) fell 0.5% to $74.46/bbl. Concerns stem from rising tensions in the Middle East, including calls for Iran’s “unconditional surrender” and increased U.S. military presence, alongside concerns about Israel’s diminishing missile defenses. Iran produces 3.3 million barrels per day (bpd) and the Strait of Hormuz handles 20% of the world’s seaborne oil. While OPEC+ spare capacity could offset potential disruptions, Fitch analysts suggest sustained conflict could add upward pressure to prices. Traders are also anticipating a Federal Reserve rate decision impacting demand, with a hawkish stance potentially weighing on energy prices. (FMP)
Economic Growth: On Tuesday, the Dow Jones Industrial Average dropped 335 points, a decline of 0.8%, while the S&P 500 fell 0.8% and the Nasdaq Composite declined 0.9%, closing at 4:00 p.m. ET. May retail sales plunged 0.9%, exceeding economists’ expected decline of 0.7%. President Trump is considering direct strikes against Iran, following Situation Room briefings, and has demanded Iran’s “unconditional surrender.” The Federal Reserve began a two-day policy meeting where rates are widely expected to remain unchanged, with traders closely watching for clues on future rate paths. Technology and consumer-discretionary stocks led declines. (FMP)
Economic Growth: A generation ago, the federal budget was briefly in surplus. Now, it appears headed for a record stretch of peacetime deficits. (WSJ)
Economic Growth: U.S. Treasury yields fell after retail sales fell more than Wall Street expected last month, pushing up fixed income prices and lifting concern over a slowdown. (CNBC)
Economic Growth: Many analysts see a muted performance in the second half, but U.S. trade policies and the economy are the wild cards. (Barrons)
Economic Growth: U.S. retail sales dropped more than expected in May, weighed down by a decline in motor vehicle purchases as a rush to beat potential tariff-related price hikes ebbed, but consumer spending remains supported by solid wage growth for now. (Fast Company)
Economic Growth: U.S. retail and food services sales saw a month-over-month decline of 0.9% in May after slipping 0.1% in April, the Census Bureau reported Tuesday (June 17). [contact-form-7] The greatest declines were in the automotive and building materials sectors, the Bureau said in a Tuesday press release. (PYMNTS)
Geopolitics: U.S. stock futures declined on Tuesday, with Dow futures slipping 0.8%, S&P 500 dropping 0.7%, and Nasdaq 100 declining 0.7% as of early morning trading. This follows a cautiously optimistic close on Monday spurred by potential U.S.-Iran diplomatic talks. Geopolitical tensions remain high after Israel reported “extensive strikes” on Iranian military assets, and a senior Iranian general was reportedly killed. Talks between U.S. and Iranian diplomats are reportedly being considered to revive a nuclear deal. The Bank of Japan announced a slower bond tapering timeline starting next fiscal year. U.S. President Trump exited the G7 summit early, dismissing links to ceasefire discussions. Discussions at the G7 included potential U.S.-Canada and U.S.-UK trade deals, with tariffs on steel and aluminum unresolved. Investors are exhibiting reduced risk appetite and increasingly using safe-haven assets like gold. (FMP)
Geopolitics: Gold prices remained steady on Wednesday, with Spot Gold at $3,388.25 per ounce and August Futures at $3,405.95 per ounce. The price stability is attributed to escalating geopolitical risks from a six-day aerial conflict between Israel and Iran, compounded by concerns over potential U.S. military action, including targeting Iran’s nuclear infrastructure. U.S. retail sales for May fell by 0.9%, reinforcing expectations of potential Federal Reserve rate cuts later in the year. Investors are cautiously awaiting the Federal Reserve’s policy statement, with no immediate rate changes expected. (FMP)
Geopolitics: Global markets were tense on Wednesday, the sixth day of the Israel–Iran conflict, due to escalating geopolitical concerns fueled by President Donald Trump’s call for Iran’s unconditional surrender and warnings of fading U.S. patience. Brent crude rose 0.3% to $76.67/barrel, while WTI crude climbed 0.43% to $75.16/barrel, following a surge of over 4% on Tuesday. The MSCI Asia-Pacific ex-Japan dropped 0.3%, and EUROSTOXX 50 futures slipped 0.34%. Investors are exhibiting risk-off sentiment ahead of the U.S. Fed policy decision and macro data releases later this week, with oil prices acting as a key barometer of sentiment. (FMP)
Geopolitics: Israel-Iran conflict enters sixth day, with President Trump considering strike on Iran (WSJ)
Geopolitics: Stocks tripped Tuesday as the US edged closer to a Middle East entanglement nobody ordered. The S&P shed less than 1%, but the headlines dropped harder. (Seeking Alpha)
Geopolitics: A U.S. military strike against Iran is one of the options Trump is considering, current and former administration officials told NBC News. U.S. stocks retreated Tuesday as Trump’s rhetoric on Iran ramped up. (CNBC)
Geopolitics: As the conflict between Israel and Iran escalates, investment strategists have been catastrophizing about how markets might react if Iran took the unprecedented step of trying to close the Strait of Hormuz. (Market Watch)
Geopolitics: U.S. oil prices surged on Middle East tensions, and I expect a new normal. WTI and XLE show moderate year-to-date gains, while U.S. crude exports and LNG exports are rising, supporting the sector. (Seeking Alpha)
Geopolitics: Investors shouldn’t read too much into daily moves in the sector. They have become a gauge of global tensions. (Barrons)
Geopolitics: Major stock indexes slipped and oil prices climbed Tuesday after ongoing attacks between Israel and Iran dimmed hopes for a quick de-escalation in the conflict. (WSJ)
Geopolitics: The risk of Iran closing the Strait of Hormuz is real and could disrupt 20% of global oil supply, causing oil prices to skyrocket. A major oil price shock from a Hormuz closure would likely trigger a global recession and a 20%+ decline in equity markets, based on historical precedent. (Seeking Alpha)
Geopolitics: US stocks have been in rather volatile in recessions sessions amidst rising tensions between Israel and Iran, particularly because the latter plays a central role in the global oil supply chain. (Invezz)
Inflation: Policymakers worried that recent firmness in core inflation could last indefinitely due to President Trump’s trade policy. (WSJ)
Inflation: The June CNBC Fed Survey continued to indicate weaker growth and higher inflation than at the beginning of the year and most say uncertainty over tariff policy remains high. The Fed is expected to stand pat at the June meeting and not cut rates until September. (CNBC)
Interest Rates: The market is forward-looking and will soon focus on President Trump’s likely dovish Fed Chair nominee, making Powell a lame duck. A new, less independent and more dovish Fed Chair could be a bullish catalyst, especially for rate-sensitive sectors like REITs, utilities, and housing. (Seeking Alpha)
Interest Rates: The rate projections give investors and analysts a false sense of precision. Some Fed officials are tired of them. (WSJ)
Interest Rates: A warning sign we have been observing at 3EDGE is the rise in global long bond yields – the interest rates investors demand to buy bonds with a maturity of 20 years or more. In this video, Fritz Folts, 3EDGE Chief Investment Strategist, and Steve Cucchiaro, CEO/CIO, discuss: The sharp increase in U.S. (ETF Trends)
Interest Rates: Investors are awaiting the outcome of the Federal Reserve’s policy meeting, which concludes on Wednesday. (Market Watch)
Interest Rates: While any movement on interest rates seems improbable, the Fed meeting, which concludes Wednesday, will feature important signals that still could move markets. Among the biggest things to watch will be the future outlook for interest rates, how officials see inflation trending, and political pressure that has rained on Chair Jerome Powell. (CNBC)
Interest Rates: U.S. borrowing rates are likely to decline in the coming months, which would be positive for the bond market and the economy. (Market Watch)
Interest Rates: Heightened uncertainty over tariffs, the direction of oil prices and their impacts on inflation is giving way to a risk that Federal Reserve officials may not be able to cut interest rates in two quarter-point increments this year as they had previously expected. (Market Watch)
Interest Rates: The Federal Reserve meeting is likely to reveal a more hawkish near-term interest-rate outlook. (Investors Business Daily)
International relations: Most Asian currencies showed little movement on Wednesday, influenced by the ongoing Israel-Iran conflict and approaching U.S. trade tariff deadline of early July. The U.S. dollar edged lower ahead of the Federal Reserve’s policy decision. The USD/KRW decreased by -0.6%, the USD/TWD decreased by -0.4%, USD/JPY decreased by -0.1%, and AUD/USD increased by +0.2%. The USD/CNY, USD/SGD, and USD/INR were flat. The conflict increased demand for the U.S. dollar and Japanese yen. Weak U.S. economic data, including retail sales, manufacturing surveys, and jobless claims, heightened expectations for a dovish Federal Reserve. The People’s Bank of China will announce its loan prime rate, and the Fed will provide a statement and press conference with Chair Powell addressing rate paths and balance-sheet policy. (FMP)
International relations: Asian stock markets showed mixed performance on Wednesday, with the Hong Kong Hang Seng Index falling by 1.1% due to escalating geopolitical concerns related to the Israel-Iran conflict and potential U.S. military involvement, including reports of former U.S. President Donald Trump discussing military options. Mainland China’s Shanghai Composite fell by 0.5% and the CSI 300 Index by 0.4%. India, Singapore (Straits Times Index -0.5%), and Indonesia (Jakarta Composite Index -0.1%) remained largely flat. Japan’s Nikkei 225 climbed 0.7% to a four-month high, supported by a weaker yen, despite Japanese exports falling 1.7% year-over-year in May, with U.S.-bound exports decreasing by 11.1%, marking the first decline in eight months. Traders are anticipating the Federal Reserve’s interest rate decision later on Wednesday, with no rate change expected, but updated economic projections and commentary from Powell potentially influencing investor positioning. (FMP)
International relations: As investors and headlines have focused on tariff policy and trade talks, Asian currencies have been strengthening. Over the past several years, many Asian countries—including China, Japan, South Korea, Taiwan, and Malaysia—have run current account surpluses, fueled by strong export sectors. (Seeking Alpha)
International relations: Markets have rebounded strongly over the past nine weeks after a steep sell-off following the announcement of reciprocal tariffs in early April. Not even a potential regional war in the Middle East has been able to knock equities down for more than a day. (Seeking Alpha)
Market Sentiment: Institutional investors appeared to shrug off the US equities rally in May by boosting their selling of stocks. Institutions sold a net $50.78 billion in stocks in May, up from $30.93 billion in April and above the net $42.73 billion average sold by this investment group over the past year, according to the latest S&P Global Market Intelligence data. (Seeking Alpha)
Market Sentiment: Stock rally momentum has faded, with credit and FX market signals indicating the advance was likely to stall regardless of recent geopolitical events. Widening global credit spreads, especially in the U.S., Europe, and Japan, contrast with a more resilient stock market, highlighting diverging market confidence. (Seeking Alpha)
Policy: Bank of America’s June Global Fund Manager Survey, polling 190 managers overseeing $523 billion, indicates a shift towards international equities, with 54% expecting them to outperform other asset classes over the next five years, compared to 23% favoring U.S. equities, 13% choosing gold, and only 5% backing bonds. Recession expectations have decreased, with a net 36% now believing a recession is unlikely, up from a net 42% in April, and confidence in a “soft landing” at 66%, an eight-month high. Fund managers are most underweight the U.S. dollar in 20 years, and have shifted portfolios towards equities, emerging markets, energy, and banks, while trimming defensive sectors. “Long gold” remains the most crowded trade for the third consecutive month, favored by 41%, while enthusiasm for the “Magnificent 7” tech stocks has fallen to 23%. Regarding the proposed “Big Beautiful Bill,” 81% of fund managers believe it will widen the U.S. budget deficit, while 33% see growth upside in 2025. (FMP)
Policy: The central bank reduced its key policy rate to 2% and said there was a small chance of further easing later this year if economic weakness persists and inflation falls further. (WSJ)
Policy: The U.S. economy is mostly in good shape but that isn’t saving Federal Reserve chair Jerome Powell from a spell of angst.As the Fed considers its next moves during a two-day meeting this week, most economic data looks solid: Inflation has been steadily fading, while the unemployment rate is still a historically low 4.2%. Yet President Donald Trump’s widespread tariffs may push inflation higher in the coming months, while also possibly slowing growth.With the outlook uncertain, Fed policymakers are expected to keep their key interest rate unchanged on Wednesday at about 4.4%. (Fast Company)
Policy: The Federal Reserve will consider plans to ease leverage requirements on larger banks at a meeting later this month, kicking off what is expected to be a broad effort to reconsider bank rules. (Reuters)
Trade: It pays to have an active manager to navigate this sector. Vanguard’s indexed ETF holds 4,794 stocks. (Barrons)
Trade: Exports to the U.S. slid due to weaker demand for cars, auto parts and chip-making machinery. (WSJ)
Trade: Two toy manufacturers asked the court to greatly expedite their case, in an unusual request. (NYTimes)
Trade: The tariff-induced spending splurge may have come to an end. [contact-form-7] In May, retail sales slipped 0.9%, adding to a revised 0.1% decline in April, according to the Census Bureau. (PYMNTS)
Trade: U.S. Transportation Secretary Sean Duffy said on Tuesday that he wanted civil aviation to return to a 1979 zero-tariff trade agreement but noted it is part of broader trade talks. (Reuters)
Industry
Aviation: An Air India Boeing 787 Dreamliner crashed 17 seconds after takeoff from Ahmedabad, resulting in 241 fatalities, making it the worst global aviation tragedy in over ten years. One passenger, Viswashkumar Ramesh (Seat 11A), survived. Thirty people on the ground also perished when the aircraft struck a medical college hostel. The flight carried 242 people, including 12 crew members, comprised of 169 Indian, 53 British, 7 Portuguese, and 1 Canadian nationals. Black boxes have been recovered, and investigations are focusing on engine thrust, flap mechanisms, and why the landing gear remained open, with engine fire ruled out. India’s DGCA is auditing pilot and dispatcher training records, and flying schools are instructed to verify compliance. The FAA, NTSB, Boeing, and GE are at the site. A fleet-wide inspection of Air India’s Boeing 787s revealed no major faults, but maintenance practices are under review. Boeing executive Stephanie Pope met with Air India leadership in Delhi. (FMP)
Consumer Goods: Morgan Stanley issued a cautious outlook for alcohol stocks, but recommended alternatives like Coca-Cola and Philip Morris. (Barrons)
Industrials: In a year of shocks, turmoil, and tariffs, investor sentiment has been whipped to and fro as the crowd struggles to assess the outlook for risk and reward. The Industrial Select Sector SPDR Fund (XLI) is up 9.3% year to date, modestly ahead of communications (XLC), the second-best performer. (Seeking Alpha)
Retail: Canadian clothing line Groupe Dynamite said profit margins were squeezed by tariffs and reciprocal tariffs in its first quarter. Small retailers are likely to feel more of the pinch from tariffs than their larger competitors, said strategists at money manager Janus Henderson. (Market Watch)
Retail: Walmart-owned warehouse-club chain considers price increases on small kitchen appliances, while keeping pricing flat on more than 1,000 summer items. (WSJ)
Corporate
Airbus: Airbus raised its upper end of the dividend payout ratio to 50%, up from a previous target of 30–40% of underlying net income. The company aims for a cash conversion ratio of around 1x over a five-year cycle, and reaffirmed 2025 targets including an EBIT margin above 9% and free cash flow of around €6 billion. Airbus is targeting 900+ A320-family jet deliveries. The company is also continuing to ramp up production of A350 and A330neo aircraft. These announcements occurred on Wednesday and are being presented at the Paris Airshow 2025 amidst geopolitical tensions, U.S. tariffs, and supply-chain pressures. (FMP)
Amazon / Verve Therapeutics / Kraft Heinz / Chevron / Exxon / Ferrari / Roku: U.S. stock futures declined Tuesday amid concerns over the Israel-Iran conflict and anticipation of retail sales data and a Federal Reserve policy meeting. Amazon extended its Prime Day event to four days (July 8-11), up from two days in 2023. Verve Therapeutics stock rose over 70% following reports Eli Lilly may acquire it for up to $1.3 billion. Kraft Heinz plans to eliminate artificial dyes by 2027. Chevron and Exxon gained approximately 1%. Solar stocks fell due to proposals for a phase-out of renewable energy credits by 2028. Nuclear energy credits were extended to 2036. Ferrari delayed its EV launch from 2026 to 2028. Roku increased by 2% following an upgrade from Loop Capital referencing an Amazon advertising partnership. (FMP)
Cytokinetics Incorporated: On June 17, 2025, Malik Fady Ibraham, Executive Vice President of Research & Development, sold 2,000 shares of Cytokinetics (CYTK) at $32.91 per share, retaining 140,610 shares afterward. Cytokinetics granted stock options for 83,583 shares and 56,334 restricted stock units (RSUs) to 11 new employees on June 15, 2025. The company’s financial metrics include a negative P/E ratio of -6.27, a price-to-sales ratio of 202.21, an enterprise value to sales ratio of 239.54, a negative enterprise value to operating cash flow ratio of -11.57, a negative earnings yield of -15.96%, a negative debt-to-equity ratio of -2.97, and a current ratio of 5.99. (FMP)
Digital Turbine Inc: Digital Turbine Inc. (NASDAQ:APPS) stock surged 56.6% after Craig-Hallum analyst Anthony J. Stoss raised the firm’s price target from $4.00 to $7.00, reiterating a Buy rating. Key growth drivers include momentum for the SingleTap app-installation software, now live with Telefonica in the UK, Germany, and Brazil in partnership with Epic Games, generating fee and royalty income. Upcoming catalysts include a pending SingleTap launch with AppLovin (NASDAQ:APP), a new distribution agreement with a major AI company, and recent T-Mobile activation on DT Ignite. The company beat EBITDA expectations in the March quarter and provided solid FY26 guidance exceeding Street estimates on EBITDA. Digital Turbine extended maturity on $409 million in debt to April 2026. (FMP)
Enphase Energy / First Solar: S&P components Enphase Energy and First Solar move lower by double-digit percentages. (Market Watch)
Eyenovia Inc: Eyenovia Inc. (NASDAQ: EYEN) shares surged 136.4% following the announcement of a $50 million private placement to acquire over 1 million HYPE tokens on the Hyperliquid blockchain, positioning the company as a top Hyperliquid network validator. The company plans to rebrand to “Hyperion DeFi” (ticker: HYPD) around June 20, 2025. The placement includes convertible preferred stock convertible into approximately 15.4 million common shares at $3.25 each, and warrants for ~30.8 million additional shares at $3.25, potentially raising up to $150 million if exercised. Hyunsu Jung has joined as Chief Investment Officer and board member. Eyenovia will maintain its pharmaceutical operations, including FDA registration of its Gen‑2 Optejet User Filled Device by September 2025, and will launch a HYPE staking program with assets secured by Anchorage Digital. Investors are facing risks including crypto market volatility, regulatory uncertainties, and validator operations execution. (FMP)
GMS Inc: The consensus price target for GMS Inc. (NYSE:GMS) has declined from $88.33 to $86.5 over the past year, with RBC Capital setting a target of $68. In Q3 2025, GMS reported earnings of $0.92 per share, missing the Zacks Consensus Estimate of $1.39. Q2 2025 earnings were $2.02 per share, falling short of the expected $2.26. GMS operates approximately 300 branches and distribution centers in the U.S. and Canada, distributing construction materials and competing with companies like Builders FirstSource and ABC Supply Co. Earnings calls are attended by CEO John Turner, CFO Scott Deakin, and analysts from Baird, Truist Securities, and Barclays. (FMP)
Goldman Sachs: Goldman Sachs is integrating its Asia-Pacific (APAC) investment banking operations, beginning in September 2024, to capture a larger market share amid a resurgence in deal flow. The integration involves unifying M&A teams in Japan, Australia & New Zealand, and the rest of Asia, combining investor units, and launching a Capital Solutions Group. Iain Drayton has been appointed to lead the integrated APAC franchise. The revamp is driven by a clear pickup in large-scale M&A and Equity Capital Markets activity including IPOs and follow-on offerings. Goldman Sachs’ credit and rating profile can be reviewed via the Company Rating & Information API. Drayton noted a positive shift in market sentiment, investor engagement, and transaction momentum, contrasting with the past two to three years. (FMP)
Hasbro (NASDAQ: HAS): Toy maker Hasbro (NASDAQ: HAS) is reducing its global headcount by 3%, equivalent to approximately 150 employees, as part of a cost-cutting effort. This follows a previous reduction of 900 jobs in December 2023. The company sources roughly 50% of its U.S. toy and game inventory from China, and new U.S. tariffs have increased landed costs by up to 25%. Hasbro is diversifying its supply chain, exploring manufacturing and shipping alternatives beyond China, as part of a multi-year restructuring plan focused on digital & licensing growth and operational efficiency. The company ended fiscal 2024 with ample cash and manageable leverage, maintaining its investment-grade status. (FMP)
Meta Platforms (META): Meta Platforms (META) is aggressively pursuing AI talent, offering signing bonuses up to $100 million to engineers from OpenAI. Despite these nine-figure offers, no top engineers have accepted yet. Meta has committed $14.3 billion to Scale AI and hired its CEO to bolster AI research and infrastructure. The company’s long-term vision involves building an AI unit to drive breakthroughs across social media, advertising, and the metaverse. Investors are monitoring Meta’s financial health amid these investments, which may influence overall tech sector hiring costs and draw regulatory scrutiny. The competition is expected to continue, with accelerated rollouts of AI-driven features across platforms like Reels and Horizon Worlds. (FMP)
Microsoft Corp / AMD: Microsoft (MSFT) and AMD (AMD) have announced a multi-year strategic collaboration to co-engineer advanced silicon for future Xbox devices, including the next generation of consoles. The partnership leverages AMD’s CPU/GPU design leadership and Microsoft’s system integration expertise, aiming for enhanced graphics capabilities, higher frame rates, and reduced latency. AI-powered experiences, including real-time world generation and adaptive rendering, are also planned. AMD currently powers the CPU/GPU in existing Xbox Series X|S consoles. While a fixed launch window isn’t detailed, the alliance seeks hardware availability aligned with Microsoft’s gaming ecosystem roadmap. The initiative highlights gaming’s strategic importance for both companies and aims to differentiate Xbox from rival platforms, potentially driving hardware sales, new subscription opportunities, and content monetization. (FMP)
Nvidia: Barclays has raised its price target for Nvidia (NASDAQ: NVDA) from $170 to $200, representing a 38% upside from Nvidia’s June 16 closing price of $144.69. The revision is based on a 29x multiple applied to a 2026 non-GAAP EPS estimate of $6.86 (up from $6.43). Barclays anticipates a $2 billion revenue upside in July alone versus consensus, and has increased its full-year Compute revenue forecast to $37 billion from $35.6 billion. Blackwell chip production currently stands at 30,000 wafers per month, below a prior estimate of 40,000, but utilization remains healthy. Blackwell Ultra is on track for mass production in Q3, with system sales projected to contribute 25% of July revenue, rising to 50% by October. (FMP)
Raytheon Co: Raytheon Co. was awarded a $299.7 million contract modification by the U.S. Department of Defense to advance the Evolved SeaSparrow Missile (ESSM) Block 2 program. The firm-fixed-price contract, supporting the procurement of test equipment, spares, and Guided Missile Assemblies, is scheduled for completion by September 2030. Work will be distributed globally, with key hubs including Tucson, Arizona (12%), Edinburgh, Australia (11%), Mississauga, Canada (10%), San Jose, California (9%), and Raufoss, Norway (8%), alongside 18 other locations. Funding includes $283.7 million from fiscal 2025 Navy weapons procurement, $7 million from fiscal 2025 customer funds, $5.4 million from fiscal 2024 Navy weapons procurement, and $3.5 million from fiscal 2024 customer funds. The Naval Sea Systems Command in Washington, D.C. is overseeing the contract (N00024-24-C-5408). (FMP)
Tesla Inc: Wells Fargo maintains an Underweight rating on Tesla (NASDAQ: TSLA) with a price target of $120, citing deteriorating fundamentals and projecting a potential turning point in 2025. Full-year deliveries are forecast to decline by 21% year-over-year, with Q2 volumes expected at 343,000 units, 17% below consensus estimates. Meeting Wall Street’s Q2 expectation of 411,000 units would require a 50% month-over-month surge in June deliveries. Wells Fargo projects a free cash flow burn of $1.9 billion in FY2025, the first negative FCF year since 2018, alongside $11 billion in capital expenditures next year. ZEV credit revenues face a structural decline, potentially impacting EBIT by >10%, having previously contributed as much as 50% of Tesla’s total regulatory credit earnings. Tesla currently trades at 172x the consensus 2025 EPS and over 400x Wells Fargo’s own EPS estimate. (FMP)
Triodos Bank: The Dutch lender, which focuses on sustainable banking, on Wednesday listed its 14.5 million depository receipts on the stock exchange in a bid to make these types of negotiable certificates–which are similar to shares–more accessible to existing and new investors. (Market Watch)
UBS Group AG: Morgan Stanley downgraded UBS Group AG (SIX:UBSG) to “underweight” and reduced its price target from CHF 28 to CHF 26. They lowered 2025–2028 EPS forecasts by 5% and cited capital uncertainty and weaker earnings as reasons. Proposed Swiss regulatory capital reforms could require UBS to raise an additional $24 billion, potentially pushing the Common Equity Tier 1 (CET1) ratio to 19%, unless mitigating actions of 250 basis points are taken. Morgan Stanley revised its CET1 assumption from 16% to 16.5% and reduced buyback forecasts to $3 billion annually from 2026. UBS currently offers a 6% total yield, below the 9% average for European peers, and trades at 1.15x 2026 projected tangible book value and 8.5x 2027 EPS. Year-to-date (YTD), UBS has dropped 38%, underperforming the STOXX Europe 600 Banks Index (SX7P), but outperformed the KBW Bank Index by 5%. (FMP)
