A daily market update from FS Insight — what you need to know ahead of opening bell

“Life is full of tough decisions, and nothing makes them easy.” — Martha Beck

Overnight

Nvidia CEO Jensen Huang to sell up to $735 million in stock ahead of 10-1 split (Barron’s)

U.S. eyes antitrust investigation against Nvidia as market value surpasses $3 trillion: FTC also looking at Microsoft, OpenAI (Semafor)

Intel, Google, Microsoft, Meta, Cisco et al announce formation of Ultra Accelerator Link (UALink) Promoter Group to curb Nvidia‘s dominance in the AI accelerator market (TR)

Core Scientific rejects takeover offer from Coreweave (IP)

SEC cyber disclosures delayed several times since December (WSJ)

CrowdStrike chief, FBI agent discuss fakes and threats, at WSJ Tech Live: Cybersecurity (WSJ)

Trillion-dollar asset manager Franklin Templeton explores new crypto fund (TI)

China’s Nvidia loophole: how ByteDance got the best AI chips despite U.S. restrictions (TI)

U.S. antitrust enforcer says ‘urgent’ scrutiny needed over Big Tech’s control of AI (FT)

SpaceX Starship makes first splashdown, a major milestone for Elon Musk’s megarocket (Semafor)

The strange tale of a $457 million deposit, 100 million masks from China, and one tiny bank (Semafor)

This bond-market recession signal has been flashing since 2022, with no downturn (MW)

High rates pit private equity firms against direct lenders (BBG)

You can now buy gold bars from vending machines in South Korea (BBG)

PE bosses warn of lower returns (FT)

Texas stock exchange start-up draws skeptical industry response (FT)

BoC cut rates in first among G7 nations (RT)

Insurers to build private credit exposure in coming years (RT)

U.S. high-yield bond funds saw biggest inflows YTD in May (RT)

EM portfolios see foreign inflows for seventh-straight month (RT)

Active ETFs boom as funds eye record $260B inflow (BBG)

Moody’s may cut six U.S. banks on CRE exposure (BBG)

GameStop surged 50%+ as ‘Roaring Kitty’ teased a livestream (RT)

Left shorts GameStop three years after getting squeezed (RT)

Short bets against Nvidia stand at $34B (RT)

FDA reversed its ban on Juul e-cigarettes (CNBC)

Amazon Labor Union agrees to affiliate with Teamsters (RT)

USA stuns Pakistan in T20 World Cup upset (FRB)

Trafigura’s profit drops 73% as trading boom cycle fades; earnings remain high by historical standards (BBG)

Private equity bosses warn of lower returns (FT)

Everton’s lenders battle to take control of Premier League club (FT)

LVMH’s Bernard Arnault promotes his second-youngest son to run the family’s investment firm, which holds controlling shares in the parent of Louis Vuitton, Dior, and Tiffany (FT)

Remy Martin sees tough year ahead as U.S. slowdown drags on (WSJ)

Devon Energy has lost bids to acquire at least three of its peers in the last 12 months because its shares were spurned as acquisition currency (RT)

A natural-gas billionaire bets on greener fossil fuel (WSJ)

The aging U.S. power grid is about to get a jolt (WSJ)

Justices allow insurers to challenge mass-tort bankruptcy plans (WSJ)

U.S. payroll gains not as robust as reported, BLS data suggest (BBG)

Baltimore port set to reopen soon (LI)

The LA lawyer taking on one of Europe’s biggest drugmakers (FT)

Should ‘finfluencers’ be regulated as financial advisors? (Barron’s)

Chart of the Day

MARKET LEVELS

MORNING INSIGHT

Good morning!

The macro data this week has been supportive of softening inflation, hence the rise in expected Fed cuts this year to 2.0, but the key is today’s jobs report. In the meantime, we see signs institutions adding risk as many missed the rise in May

Click HERE for more.

TECHNICAL

Many are wondering what’s needed to help the broader market play catch-up with the recent surge in Technology, as this week’s breakdown thus far hasn’t materially helped the Small-cap or Mid-cap sector, nor the Financials sector, which has huge implications within SPX as the second largest sector.

Bloomberg and other news sources are claiming that the gap between Equal-weighted S&P 500 (RSP 0.41% ) and cap-weighted S&P 500 (^SPX) might be due to converge, given the bullish earnings outlook in sectors outside Technology.

While we can’t speak to whether a pick-up in earnings would serve as the catalyst for some outperformance in the broader market (as the correlation between earnings and stocks remains dubious) the charts remain inconclusive that broader market strength is imminent.

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CRYPTO

In our latest video, we discuss the intersection of bitcoin miners and high-performance computing (HPC), as well as the positive implications of Robinhood’s pending acquisition of Bitstamp. As a result, we are adding additional miners and HOOD to our crypto equities basket.

Click HERE for more.

FIRST NEWS

Island Finance. As Hong Kong’s position as a global financial hub wanes on the back of its increasing alignment with mainland China, several top Singaporean and Swiss banks are seizing the opportunity. According to reports, these banks are ramping up hiring in the region, establishing new bases, and actively seeking new clients. The exodus of US-based companies from Hong Kong, with the number of those with regional headquarters dropping from 282 in 2020 to 214 in 2023, has further fueled this shift.

The CEO of OCBC, a prominent Singaporean bank, stated that more Hong Kong customers are opting to engage with them instead of their Western counterparts. She attributed this trend to the strengthening ties between China and Southeast Asia, noting that they are “benefiting from some of our peers actually leaving this part of the world.” More Hong Kong customers “choose to talk to us, instead of talking to their Western counterparts.” Semafor

Diet Koch. Phillip Morris morphed into alter ego Altria. AmerisourceBergen amerisourced itself into Cencora. Twitter exiled itself into X-hood. Now, Koch Industries, the company that, blithely oblivious to the PR ramifications of the move, once relegated itself to the ranks of cartoonishly evil industrial giants by lobbying against the designation of formaldehyde (a known human carcinogen) as a carcinogen – even as David Koch, one of its founders, was a major donor to cancer research – is also getting on the change-your-name bandwagon.

It’s taken it some time, but Koch Industries finally decided to change its name “to better reflect its evolving business”. Rebranding for the first time since 1968, the conglomerate is one of America’s largest and most influential privately held companies, owned primarily by billionaire Charles Koch and his family. Dropping “Industries” from its name, it will now be known as simply “Koch” or “Koch Inc” – and will still be pronounced “Coke”.

The name change, which the company says is a “better fit for our current business and vision for the future,” reflects Koch’s evolution from its origins as an oil-refining operation to a diversified enterprise with significant investments in semiconductors, cybersecurity, real estate, and other sectors.

In recent years, Koch has invested nearly $4 billion in disruptive technologies and $36 billion in technology investments overall. It’s also made notable real estate acquisitions, such as the Fontainebleau Las Vegas. The company has undergone leadership changes, elevating Dave Robertson as co-CEO, alongside Charles Koch, and appointing Jim Hannan as president and COO.

Despite dropping “Industries” from its name, Koch remains committed to its industrial business, continuing to operate refineries in Texas and Minnesota. Axios