An update on the latest news, insights, and market views shaping global wealth management and investment trends.

Weekly Snapshot

This section highlights weekly performance, notable volatility, and significant currency moves shaping investor sentiment.

• In the week the King of the North marched on Downing Street in scorching temperatures, the S&P declined -1.6%, the Nasdaq was down -4.4%. Europe decreased -1.1%, the Nikkei lost -2.7% and China's mainland market fell -1.5%
• Treasury markets staged a significant rally this week, with the 10Y yield ending at 4.3745% and the 2Y at 4.088%, as two forces converged to pull rates lower: a sharp retreat in crude oil and a May PCE print that offered no hawkish surprises
• It was a pivotal week for crude oil, with prices retreating to pre-war levels amid growing optimism that the US - Iran conflict may be nearing its end. 
• Precious metals came under pressure as the Fed's hawkish tone weighed on investor sentiment. Gold briefly slipped below the $4'000 mark before recovering to close the week at $4'092 per ounce, while silver settled at $59 per ounce
• After reaching a 13-month high of 101.80 midweek, the dollar index eased to close the week at 101.22

Geopolitical Landscape

A summary of key political and geopolitical developments during the week that may influence global markets and impact portfolio positioning.

• US-Iran negotiations opened on Sunday, raising hopes of a diplomatic breakthrough, though continued exchanges of fire between Hezbollah and Israel within hours of Friday's ceasefire served as an early reminder of how fragile the process remains. Iran has made the Lebanese truce a precondition for meaningful talks, while President Trump warned military action would resume should diplomacy fail.
• The first round concluded Monday with both sides agreeing a 60-day roadmap and establishing four working groups covering sanctions relief, the nuclear dossier, reconstruction and implementation. Washington granted a 60-day sanctions waiver on Iranian oil exports, the most significant easing since 1979, while the US and Qatar explored releasing approximately $6 billion in frozen Iranian assets for humanitarian purposes
• Significant differences persist. The nuclear inspection question remains unresolved: the IAEA chief stated the MoU provides for inspections; Iran insisted access to nuclear sites would only be granted after a final deal and full sanctions relief. Iran also ruled out inspections of strike-damaged sites and rejected US characterisation of how unfrozen assets would be used. Shipping risks remain: an evacuation of over 11'000 stranded sailors was suspended after a vessel was attacked in the Gulf of Oman. Hezbollah accused Israel of two ceasefire violations within 48 hours

• Keir Starmer resigned as Prime Minister on 22 June, ending a tenure of less than two years. His departure followed months of cabinet resignations, dismal local election results, and the rapid rise of Reform UK under Nigel Farage. The immediate trigger was Andy Burnham's commanding victory in the Makerfield by-election, called expressly to give the former Greater Manchester Mayor a parliamentary seat from which to challenge for the leadership. Burnham entered Parliament with the explicit intention of contesting the leadership and is widely expected to become the UK's next Prime Minister, paving the way for Britain's seventh head of government since Brexit was voted in 2016.

• Within OPEC, Iraq is considering an exit unless it secures a substantially larger production quota. Following the UAE's departure in April, a potential Iraqi exit would represent a serious challenge for the organisation, given Iraq's position as its second-largest producer.

Macroeconomic Developments

Key macroeconomic data releases and economic indicators across major regions and individual countries, providing insight into growth trends, and the broader economic outlook.

• In May, US core PCE rose 3.4% YoY, in line with expectations and marking its highest level since October 2023. Despite the elevated price backdrop, consumer demand remained resilient. Personal consumption expenditures increased by a stronger-than-expected 0.7% on the month, exceeding forecasts by 0.1 percentage point
• Economic activity also surprised to the upside, with first-quarter GDP expanding at a seasonally adjusted annualized rate of 2.1%, above the 1.7% consensus estimate
• In the US, despite growing expectations that the conflict with Iran may be nearing resolution, the White House requested $87.6bn in supplemental funding, partly to cover war-related costs
• The Federal Reserve's annual bank stress test underscored the resilience of the sector, showing that the largest US banks could absorb more than $708bn in losses under a severe recession scenario while continuing to lend. Treasury Secretary Scott Bessent also struck an optimistic tone, saying the US economy could return to a 3% growth path by year-end as geopolitical tensions ease

Corporate & Sector Highlights

Insights into notable developments among major global companies and sectors, including earnings results, strategic initiatives, mergers and acquisitions, regulatory developments, and trends influencing corporate performance.

• Micron reported fiscal Q3 revenue of $41.5 billion, more than quadrupling year-on-year from $9.3 billion and beating consensus by over $5 billion. Adjusted EPS of $25.11 came in roughly 23% above estimates. Data centre revenue alone exceeded $25 billion in the quarter, with High Bandwidth Memory products fully booked and supply expected to remain tight beyond 2027. For Q4, Micron guided revenue of approximately $50 billion, well above the $43.6 billion analysts had expected, and flagged free cash flow expected to exceed $30 billion. The results were unambiguously strong. The stock jumped 15% after hours, yet struggled to hold gains during regular trading as the broader tech sell-off overwhelmed the print, a reminder that even exceptional numbers cannot always outrun a deteriorating macro tape
• Qualcomm shares jumped 15% after the company raised its fiscal 2029 non-handset revenue forecast to $40bn, up from $22bn. It also targets $15bn in data center sales for that year and unveiled its Dragonfly C1000 data center CPU, with Meta expected to adopt it once production begins in 2028

• Following the Federal Reserve's annual stress test, US banks announced a new round of shareholder returns. JPMorgan Chase unveiled a $50bn share repurchase program and raised its quarterly dividend by 10% to $1.65 per share. Goldman Sachs increased its quarterly dividend by 11% to $5 per share. Wells Fargo indicated it expects to raise its dividend by 11% to 50 cents per share, while Morgan Stanley lifted its payout by 15% to $1.15 per share and reauthorizing a $20bn buyback program

• OpenAI and Broadcom unveiled their first custom chip, "Jalapeño", with initial deployment expected by end-2026. In parallel, OpenAI is reportedly considering delaying its IPO to next year amid SpaceX’s poor post-debut performance and volatility in AI stocks
• ON Semiconductor has agreed to acquire Synaptics in an all-stock deal valued at nearly $7bn, strengthening its push into physical AI technologies. The transaction is expected to close in 2027 and will expand the company's total addressable market by $30bn to $243bn by 2030
• SK Hynix plans to raise around $29bn on Nasdaq through the issuance of 17.79m new shares, with trading expected to begin on July 10

• Chevron announced a 20-year agreement to supply natural gas for a large Microsoft data center, with a final investment decision expected this year and power delivery targeted for 2028
• The US Energy Department approved $17.5bn in loans to accelerate construction of 10 nuclear reactors by up to three years

• FedEx beat Wall Street expectations on both earnings and revenue, reporting adjusted EPS of $6.31 versus $5.96 expected and revenue of $25.01bn compared with $24.04bn forecast. For the full fiscal year, revenue rose to $94.7bn from $87.9bn a year earlier, and the company now expects about 11% YoY revenue growth
• UPS announced a $48m investment in 27 temperature-controlled facilities to strengthen pharmaceutical cold-chain logistics. The move comes as the World Health Organization estimates that up to 50% of vaccines are wasted annually, largely due to cold-chain storage failures

• Reports that Germany plans to abandon its order for six F126 frigates sent defense stocks tumbling. Berlin is said to be scrapping the multi-billion-euro program in favor of purchasing eight smaller Meko A-200 frigates from TKMS. The news triggered a sharp selloff, with Rheinmetall falling 18%, marking one of its worst sessions since 1989

Looking Ahead

A forward-looking overview of the upcoming week, highlighting scheduled economic data releases, central bank events, corporate earnings, and geopolitical milestones that may shape market direction.

• 30.06: China NBS Manufacturing PMI (JUN), US Job Openings JOLTs  (MAY)
• 01.07: Japan Tankan Large Manufacturers Index (Q2), China Manufacturing, Composite and Services PMIs (JUN), US ISM Manufacturing PMI (JUN)
• 02.07: US Non-Farn Payroll (JUN), US Employment Report (JUN)

Chart of the Week

Capex ate my FCF

The four US hyperscalers collectively generated over $200 billion in free cash flow at their 2024 peak. That number is heading sharply lower. Consensus estimates point to combined FCF falling to around $50 billion by 2027, as capital expenditure programmes tied to AI infrastructure absorb an ever-larger share of operating cash generation.

The compression is not uniform. Amazon and Alphabet bear the heaviest visible burden in the near-term estimates, with FCF turning sharply negative or near zero by 2026 and 2027. Microsoft and Meta remain contributors, but at levels well below recent years.

The chart makes the tension explicit: stocks priced for cash-generative dominance are now consuming that very cash at an unprecedented rate, and multiples are compressing. For equity investors, the patience required to fund the gap between ambition and cash flow reality is becoming a variable worth pricing.

Source: S&P Capital IQ, Bloomberg Finance L.P., Julius Baer