The infoshot to help kick-start your week

Coming up this week:

SpaceX results and insider shares unlock – Tuesday & Thursday 

It’s been a tough six weeks for SpaceX investors. The shares have nearly halved since their post-IPO peak. Elon Musk’s net worth has taken a $600bn hit in the same period.

The company will release their first results since the IPO on Tuesday. Pre-IPO investors and early backers will get their first chance to offload up to 20% of their holdings two days later. It’s looking likely that both will put more downward pressure on the stock.

US jobs data – Tuesday & Friday

The Federal Reserve and analysts will have a keen eye on US jobs data releases this week. Markets are now pricing in a 68% chance of a US rate hike in September, however an increase in jobless claims or a fall in job openings will scupper those expectations.

Last week:

US interest rates held

Following a 9-3 vote, the Federal Reserve held interest rates for the fifth time in a row on Wednesday.

With prices rising well above the Fed’s 2% inflation target, and the ongoing situation in Iran constantly muddying the inflation picture, the Fed has been coming under increasing pressure to raise rates.

During a tough press conference, Fed Chair Kevin Warsh’s responded to questions over why the Fed didn’t hike rates saying, “we will deliver, we are focused like a laser on making sure we can do it, but the suggestion we are going to wave a magic wand is one I want to disabuse you and everyone else of.” Bond markets reacted badly to the news sending 30-year US treasury yields past 5.2% and their highest level in two decades.

Cloud revenue growth gives the tech index a breather

Last week we had another round of big tech results. Microsoft and Amazon both reported better-than-expected growth thanks to surging cloud revenue. Apple became only the second company to ever pass the $5tn valuation mark on Tuesday. However, they took hits on Thursday and Friday after their quarterly report forecasted softer Q4 growth.

Meta shares tumbled after they vowed to keep spending heavily on AI projects while profits continue to fall. They now plan to spend $130bn to $145bn on mainly AI-related projects this year. Their free cash flow of $784mn was the lowest it’s been in five years. Overall, the numbers from Amazon and Microsoft helped the US’s tech index end a two-week losing streak, finishing up 0.55%.

In other tech news, Nvidia spooked investors again after announcing more AI infrastructure deals full of circular funding, including a possible $250bn deal with OpenAI to guarantee financing for a new data centre in Ohio.

As the threat from China to US AI firms continues to grow, on Monday it emerged that an unnamed Chinese company has begun manufacturing a deep ultraviolet lithography (DUV) machine, an important expansion to their home-grown semiconductor technology kit.

US propping up yen

This morning, Japanese and American officials confirmed they had jointly intervened to halt the yen’s slide after it dropped to a 40-year low.

Rumours of a possible intervention have been floating around for a while now. Japan have been the largest holders of US federal debt since 2019 and currently hold an estimated $1.1tn. The Americans will be hoping that their intervention will help avoid a situation where Japan dumps a large quantity of US treasuries to help prop up the yen. A weakening yen also has the potential to trigger a selloff in Japanese government bonds pushing up bond yields across the globe.

Notice:

For regulated financial advisers and investment professionals only, Copia does not provide financial advice, and the contents of this document should not be taken as such.

The performance of each asset class is represented by certain Exchange Traded Funds available to UK investors and expressed in GBP terms selected by Copia Capital Management to represent that asset class, as reported at previous Thursday 4:30pm UK close. Reference to a particular asset class does not represent a recommendation to seek exposure to that asset class. This information is included for comparison purposes for the period stated but is not an indicator of potential maximum loss for other periods or in the future.

The infoshot to help kick-start your week

Coming up this week:

Federal Reserve meeting – Wednesday 

While holding rates is still expected, the chances of a rate hike at this week’s Federal Reserve meeting have increased in recent weeks. Renewed tensions in the Middle East have elevated energy prices once again and the demand for AI infrastructure is only adding to the inflation problem in the US. US bond yields have been rising over inflation concerns, with the two-year yield (seen as the best indicator for future Fed interest rate policy) sitting above 4% since mid-May, indicating that bond markets anticipate a rate rise sometime this year.

Committees for the Bank of England (BoE) and Bank of Japan (BoJ) will also meet this week. Both are widely expected to keep rates unchanged.

Earnings from Microsoft, Meta, Amazon and Apple – Wednesday & Thursday

We’ve got more tech heavyweights reporting their quarterly results this week. Capital expenditure and revenue from AI activity will yet again be closely scrutinised by investors.

Last week:

Burnham gets some good news in week on as PM

New Prime Minister Andy Burnham received some positive economic data in his first week as PM. 10-year gilt yields eased to 5.07% on the back of news that retail sales rose 1% in June, beating expectations of a 0.3% decline. The World Cup and consistent sunshine helped contribute to the extra spending. Consumer confidence is now at a six-month high too. PMI data also showed UK business activity has returned to growth.

Counter to press expectations, Andy Burnham named John Healey as Chancellor. Healey resigned as Defence Secretary just six weeks ago in a row over military spending. UK defence stocks like Babcock and BAE surged on the news and the likelihood that Healey will increase defence spending from 2.7% to 3%.

Burnham announced an array of spending plans in week one as he tries to hit the ground running, including a pledge to end rough sleeping in England, cutting VAT from domestic electricity bills, a £2 cap on bus fares and a cut in business rates for pubs. This first set of pledges come in at just 0.1% of public spending. Burnham’s long-term aims to reform social care, expand council house building and raise the personal allowance will need to be set out in the budgets to come.

More problems for big tech

Big tech had another bad week as Alphabet and Tesla came under fire for their capex spending and questionable returns from AI investments.

Despite overall revenues increasing to $119.8bn (23% up on the same period last year) and Google Cloud revenue surging 82% year on year, Alphabet reported negative free cash flow (-$5.9bn) for the first time in more than a decade. Growing capex, pretty much of all which is being spent on AI-related projects and infrastructure, caused the negative turn, spooking investors and sending the share price down nearly 7%. Tesla also reported negative free cash flow of -$1.1bn as they continue to ramp up their spending. They plan to nearly treble their 2025 capex spend to $25bn. With major question marks lingering over when, if ever, Optimus robots or Robotaxis will generate returns, the latest report sent the share price tumbling 14.5% on Thursday.

In other worrying news regarding some US tech giants, research from Japanese finance newspaper, Nikkei Asia, found that Meta, Oracle, Amazon, Microsoft and Alphabet have a combined $1.65tn in AI investment debt that they’ve been keeping off their official balance sheets. These hidden liabilities have primarily been used to fund data centre build outs. While not technically illegal, the scale of the debt and the growing concerns about AI profitability will be concerning investors. To give the numbers some perspective: $1.65tn exceeds the $1.35tn in debt that they’ve been reporting on official balance sheets; Meta’s off-balance-sheet debt of $420bn is three times higher than its reported debt; and Oracle’s off-balance-sheet commitments have increased 30 fold in the last four years.

US Trade Department finds a workaround for Trump’s tariffs

Trump’s tariffs morphed into a different guise on Thursday. The US imposed new tariffs on 60 countries to replace the levies that had to expire on Friday following the Supreme Court’s ruling in February that they were imposed illegally using the Emergency Powers Act. The White House are using “failures” to tackle forced labour as justification for the latest tariffs. The 10% to 12.5% duties will cover 99.4% of US imports according to the Office of US Trade.

One of the goals of Trump’s tariff policies has been to reinvigorate American manufacturing, however the latest data shows that since his re-election the US has lost 75,000 manufacturing jobs. Over the same period his predecessor Joe Biden created 625,000 new jobs in the sector.

Oil breaks the $100 a barrel barrier again

The return to hostilities in Iran pushed oil prices above $100 a barrel after Yemen’s Houthis announced a “maritime embargo” against Saudi Arabia. The Houthis said they would close the Bab al-Mandab Strait, the main Red Sea gateway for Saudi vessels. In response to the situation in Hormuz, more than 70% of Saudi exports have been diverted via the Red Sea with total petroleum volumes transiting through Bab al-Mandab reaching 7% of global output. Yesterday, the number of vessels passing through Bab al-Mandab fell to its lowest level in months with just 11 ships passing through.

Oil prices have however fallen today by as much as 9% after the US halted their attacks on Iran for a second night to give “talks some space”.

Notice:

For regulated financial advisers and investment professionals only, Copia does not provide financial advice, and the contents of this document should not be taken as such.

The performance of each asset class is represented by certain Exchange Traded Funds available to UK investors and expressed in GBP terms selected by Copia Capital Management to represent that asset class, as reported at previous Thursday 4:30pm UK close. Reference to a particular asset class does not represent a recommendation to seek exposure to that asset class. This information is included for comparison purposes for the period stated but is not an indicator of potential maximum loss for other periods or in the future.

The infoshot to help kick-start your week

Coming up this week:

Burnham becomes PM – Today

We’ll get a better idea of Andy Burnham’s plans for growth during his speech today and should find out who will be in his cabinet, and perhaps most importantly, who will be Chancellor. Home Secretary, Shabana Mahmood is the current favourite to replace Rachel Reeves.

Several AI and big tech firms reporting – Tuesday to Thursday 

Following a tumultuous period for the tech sector and AI sentiment, Alphabet, Intel, IBM and Tesla all report earnings this week. Capital expenditure, continued cloud revenue growth, and shifts in AI software spending will all be closely watched by analysts.

Last week:

Oil back above $90 a barrel

The price of brent crude oil surpassed $90 a barrel again after another week of fighting in the Middle East. Last night, Iran’s Revolutionary Guard said “not a single drop” of oil or gas will get through the Strait of Hormuz if US attacks continue.

Vessels passing through the Strait dropped to just 13 last Wednesday and maritime traffic appears near another standstill. Diplomatic talks between the US and Iran are continuing despite the strikes from both sides, according to Iran’s Foreign Ministry spokesman Esmail Baghaei.

Another week, another tech selloff

US markets fell again while under pressure from the conflict in Iran and another week of tech selloffs.

Apple overtook Nvidia as the world’s most valuable company for the first time in a year on Thursday. Nvidia shares had fallen on the announcement from Chinese firm, Moonshot AI, which unveiled new models that narrow the performance gap with US systems at lower costs. Moonshot AI’s new Kimi model has been so popular the company has had to temporarily limit access to new users. Apple also launched legal action against OpenAI, suing the company for the theft of trade secrets by gaining insider information through hiring former Apple employees.

News from rivals in China also hit Elon Musk’s SpaceX. The share price took more damage after the Chinese Long March 10B rocket booster was filmed being caught by an offshore recovery platform, demonstrating a major stride in reusable rocket technology. SpaceX shares have now fallen below their original $135 IPO price, shedding $1tn off their market value since the post-IPO high.

Outside of tech, several US banks released record-breaking reporting numbers. An increase in investment banking fees, and fees earned from the SpaceX IPO helped JPMorgan, Citigroup, Bank of America and Goldman Sachs all exceed expectations. JPMorgan posted the highest quarterly profit ever by a US bank.

Selloff in Asia continues

Following the “black Monday sell-off” on Monday, Korea’s leading market bounced back in the middle of the week before tumbling again on Thursday and today. It’s still up 51.20% in 2026 but in the last month alone we’ve seen the market lose -28.51%. Tech heavyweights, Samsung and SK Hynix, continued to lead the decline. 

Japanese and Chinese markets also fell last week. Concerns about the valuations of AI firms combined with renewed conflict in Iran have dragged Japan’s main index down -6.24%. Despite the AI and rocket ship announcements, the tech sell-off crossed into China too sending their major indexes down between -2% and -3%.

UK markets exempt from selloff

Here in the UK, our home markets made small gains last week largely thanks our lack of AI-tech exposure. Higher oil prices provided a tailwind for energy giants like BP. Optimism around Andy Burnham’s potential housing policies also pushed up housebuilders like Persimmon plc.

The latest GDP data from the ONS showed the UK economy grew, as expected, by 0.1% in May. The biggest contributor to the growth was scientific research and development which was up 5.1%.

Notice:

For regulated financial advisers and investment professionals only, Copia does not provide financial advice, and the contents of this document should not be taken as such.

The performance of each asset class is represented by certain Exchange Traded Funds available to UK investors and expressed in GBP terms selected by Copia Capital Management to represent that asset class, as reported at previous Thursday 4:30pm UK close. Reference to a particular asset class does not represent a recommendation to seek exposure to that asset class. This information is included for comparison purposes for the period stated but is not an indicator of potential maximum loss for other periods or in the future.