News updates from June 26: Mark Rutte appointed Nato secretary-general; Yen drops to lowest level since 1986

State Street Global Advisors plans to launch its first cryptocurrency fund in a new partnership with digital assets group Galaxy Digital. 

SSGA, which oversees $4.3tn and is the third-largest ETF issuer in the US, pointed to surging interest in crypto among investors since the first US spot bitcoin ETFs launched in January. A recent regulatory filing outlined plans for a forthcoming ETF whose holdings would include cryptocurrency futures and other crypto ETFs.

Galaxy worked with Invesco to launch one of the first bitcoin ETFs and is among those planning to debut ether ETFs once the Securities and Exchange Commission gives its approval. 

Levi Strauss shares plunged more than 13 per cent in after-hours trading after it missed analysts’ expectations for second quarter revenue despite announcing it would raise its dividend for the first time in six quarters. 

The denim maker reported second quarter revenue increased 7.8 per cent to $1.44bn, just shy of analysts’ expectations of $1.45bn. Net revenue in the Americas increased 17 percent but sales declined 2.1 per cent in Europe and 0.7 per cent in Asia in the quarter. 

Second quarter adjusted earnings per share rose by 12 cents from the same period last year to 16 cents a share, beating analysts’ expectations for 11 cents. 

Levi Strauss announced it would raise its dividend by 8 per cent to 13 cents a share and reaffirmed its full-year guidance.

Bolivia’s President Luis Arce has denounced the “irregular mobilisation” of army units in La Paz, amid an apparent attempted military coup in the South American nation.

Footage broadcast on Bolivian media showed an army vehicle ramming into the entrance of the presidential palace on Wednesday, as soldiers gathered in the adjacent Plaza Murillo.

“The three chiefs of the armed forces have come to express our dismay,” General Juan Jose Zuñiga told a local television crew. “There will be a new cabinet of ministers, surely things will change, but our country cannot continue like this any longer.”

Bolivia’s leftist former president Evo Morales, who has been publicly feuding with his onetime protégé Arce, accused Zuñiga of attempting to carry out a coup d’état.

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Honduras’s former president Juan Orlando Hernández was handed a 45-year prison sentence on Wednesday for facilitating cocaine transit to the US, capping the swift prosecution of a former US ally and sending a warning to leaders across the region.

Hernández, who led Honduras from 2014 until 2022, was convicted in March for his role in an armed conspiracy to move more than 400 tonnes of US-bound cocaine through the Central American country.

Prosecutors said during the New York-based trial that Hernández told allies he would stuff drugs “right up the noses of the gringos”. They said that in exchange for his partnership with Mexico’s Sinaloa Cartel, he received millions of dollars in bribes that helped finance his political ambitions.

Ireland is selling a further 5 per cent stake in Allied Irish Banks, the nation’s second-biggest bank, trimming its holding to 25.5 per cent.

It has been rapidly divesting its remaining stake following its exit from Bank of Ireland, the country’s biggest bank, in 2022. The government bailed out the banks a decade and a half ago after reckless lending precipitated an economic crash.

AIB, which was expected to issue a statement on Thursday, said a full return to private hands is possible next year.

The sale will increase pressure on Ireland’s new finance minister Jack Chambers to relax a cap on top executive pay still in place at AIB.

Amazon’s market value crossed the $2tn mark on Wednesday, as the company joined a handful of Big Tech groups to have surpassed the threshold. 

Shares in the Seattle-based company climbed 3 per cent in morning trading, pushing up its market capitalisation to $2.01tn. Its shares are up nearly a third this year, buoyed by resilient earnings in Amazon’s ecommerce and closely watched cloud divisions.

But Amazon’s market value trails behind the world’s three most-valuable companies — rival Microsoft, iPhone maker Apple and chipmaker Nvidia, all of which have crossed the $3tn mark. 

European equities fell on Wednesday, with real estate stocks among the worst performers. 

The region-wide Stoxx 600 closed 0.5 per cent lower, while Germany’s Dax fell 0.1 per cent. France’s under-pressure Cac 40 slipped 0.7 per cent and London’s FTSE 100 fell 0.3 per cent. 

The euro slipped 0.3 per cent against the dollar to $1.0681.

US stocks were mixed in late-morning trade in New York, with the S&P 500 steady and the tech-dominated Nasdaq Composite up 0.3 per cent. 

Elliott Investment Management has reiterated its call for sweeping changes at Southwest Airlines, in which the activist fund recently revealed an 11 per cent stake, after the low-cost carrier cut its revenue guidance for the quarter.

Southwest on Wednesday said it now expects revenue per available seat mile, a closely-followed industry metric, would be down 4 per cent to 4.5 per cent in its second quarter, which it blamed on “complexities” in adapting to changes in booking patterns. It previously expected a drop of 1.5 per cent to 3.5 per cent.

Elliott said in a letter on Wednesday that Southwest is “led by a team that has proven unable to adapt to the modern airline industry”, and that peers in the sector seem to have been able adapt to “complexities” in the current environment.

Southwest shares were down 0.9 per cent in late-morning trading, but had dropped as much as 2.7 per cent earlier in the session.

A trading glitch on the New York Stock Exchange earlier this month has cost Interactive Brokers $48mn after it covered trades in Warren Buffett’s Berkshire Hathaway conducted as the price plunged 99 per cent.

The brokerage revealed the hit — which is not material to its earnings — on Wednesday and said it was considering its options “including any claims at law it could assert against NYSE”.

Berkshire Hathaway’s A shares were among several that plummeted unexpectedly on June 3, leading to trading halts at the exchange. The conglomerate’s shares tumbled to $185 from $622,000. The shares then rocketed as high as $741,941 when trading resumed almost two hours later.

The exchange said later on the day of the glitch that it would cancel erroneous trades. 

Interactive Brokers, founded by billionaire Thomas Peterffy, on Wednesday said that despite its prompt flagging of erroneous deals, NYSE had declined to “bust” or cancel its trades.

NYSE, owned by Intercontinental Exchange, declined to comment.

Private equity group KKR had approached WPP over taking majority control of financial communications firm FGS Global, said people with direct knowledge of the discussions.

WPP rejected the approach, which took place in the past few months. The UK-listed advertising group owns a roughly 55 per cent stake in FGS, the people said.

KKR already owns about a 30 per cent stake in FGS after striking a deal last year that valued the business at $1.43bn. The remainder of the shares are owned by FGS partners and employees.

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The General Court of the EU has annulled a previous EU decision to extend sanctions against Dmitry Pumpyansky, former chair of Russian steel pipe manufacturer TMK with a fortune of $3.3bn.

In a ruling on Wednesday, the court said the Council of the EU had not provided enough evidence of Pumpyansky’s significance in supporting Vladimir Putin’s government after he divested from his companies in March 2022.

The decision follows similar annulments for Russian billionaires Mikhail Fridman and Petr Aven in April this year.

As in their cases, Wednesday’s ruling relates only to decisions to extend sanctions against Pumpyansky, not the original decision to impose them, which is subject to other legal proceedings. Any lifting of sanctions would require a decision by EU member states.

Kenya’s president ceded to popular pressure dropping a contentious bill that would have raised taxes after days of protests that turned deadly on Tuesday after demonstrators stormed the country’s parliament.

“The people have spoken,” President William Ruto said in an address to the nation on Wednesday. “Following the passage of the bill, the country witnessed widespread expression of dissatisfaction with the bill as passed, regrettably resulting in the loss of life . . . Consequently, having reflected on the continuing conversation around the content of the finance bill of 2024, I will decline to assent to the bill.”

Some fuel levies and additional import taxes, which are designed to partly comply with an IMF programme, were passed by the parliament on Tuesday despite days of protests. On Wednesday, Ruto ordered “further austerity measures to reduce expenditure”.

Wall Street stocks slipped in early trade on Wednesday as traders looked ahead to key inflation data due later this week. 

The blue-chip S&P 500 fell 0.2 per cent shortly after the opening bell in New York, dragged lower by utilities and consumer non-cyclicals in particular, though every sector was in negative territory. The tech-dominated Nasdaq Composite fell 0.1 per cent, eroding its 1.2 per cent gain in the previous session. Shares in Nvidia rose 0.2 per cent.

Data on Friday is expected to show that the Federal Reserve’s preferred measure of inflation slowed further in May, potentially raising the chance of interest rate cuts later this year.

Gazprom has signed a memorandum with the National Iranian Gas Company to explore pipeline gas supply options, the Russian state-owned gas and oil company announced on Wednesday.

The document was signed during Gazprom chief executive Alexei Miller’s meeting with Iran’s oil minister Javad Owji in Iran.

The plan involves Russia sending gas to Iran via Azerbaijan or Turkmenistan for use in the densely populated north-western regions of Iran. Meanwhile, Iranian gas will be piped to Turkey and Iraq, with the possibility of extending the system to Armenia and Afghanistan.

Since Russia invaded Ukraine, Moscow and Tehran have been actively discussing closer co-operation in the gas sector. In late 2023, deputy prime minister Alexander Novak mentioned a swap arrangement was among the options being considered.

Saudi Aramco has signed another deal to purchase liquefied natural gas from the US, just weeks after announcing its first ever such agreement.

The non-binding deal between Aramco and Sempra, a US LNG developer, will see the world’s largest oil exporter buy 5mn tonnes a year of LNG for 20 years, both companies said in a statement on Wednesday. Aramco will also take a 25 per cent stake in the project where the LNG will be sourced.

The companies said they expect to execute a “binding” deal with terms “substantially equivalent to those” in the agreement announced today.

Aramco is expanding its investment in LNG as it seeks to diversify its revenue streams amid the global energy transition.

US investment firm MNC Capital has raised its offer for Vista Outdoor to about $3.2bn, in the latest twist in the takeover battle for the US maker of ammunition and outdoor products.

MNC said on Wednesday it had offered $42 a share, up from a previous offer of $39.50. Shares in Vista closed at $33.78 on Tuesday evening.

The higher bid came just hours after privately held Czechoslovak Group cleared the final regulatory hurdle in its bid to acquire Vista’s ammunition business Kinetic for $2bn. Vista Outdoor said late on Tuesday that the Committee on Foreign Investment in the US had approved CSG’s bid.

The offer from CSG has been recommended to shareholders by Vista’s board despite Republican warnings that the takeover represents a national security risk.

MNC said its revised proposal was “all cash, has no regulatory issues and is not subject to any financing conditions”. 

The EU has agreed to tighten sanctions against Belarus in order to close a loophole that allowed Russia to continue importing western luxury goods such as high end cars.

EU ambassadors signed off sanctions against the eastern European country on Wednesday including a ban on exports to and via Belarus of technologies that can be used for military purposes, liquefied natural gas and luxury items.

“This package will strengthen our measures in response to Russia’s invasion of Ukraine, including combating circumvention of sanctions,” said the Belgian government, which currently chairs the EU council.

The measures come on top of previous rounds of sanctions on the government of Belarusian leader Alexander Lukashenko for supporting Moscow’s military campaign.

US new home sales: Economists have forecast that sales of new homes in the US increased in May to an annualised pace of 640,000 units, up from a five-month low of 634,000 in April.

Micron: The US chipmaker is expected to report that revenue surged 78 per cent in the third quarter from the same period last year to $6.7bn as the boom in artificial intelligence boosts demand for its products. Micron is expected to report net income of $312.6mn, compared with a net loss of $1.9bn a year earlier. Shares of the company are up about 63 per cent from the start of this year.

Other companies: Food manufacturer General Mills reports before the opening bell. Denim brand Levi Strauss & Co reports after the closing bell.

The Japanese yen has fallen to its weakest level against the US dollar since 1986, putting traders on alert that officials might again be forced to step in to support the ailing currency. 

The yen slipped 0.6 per cent against the dollar to ¥160.65 on Wednesday, past the level it reached in late April before Japan’s finance ministry spent a record ¥9.8tn ($62bn) to boost the currency. 

In response to the latest leg lower, Japan’s top currency official, Masato Kanda, told reporters that the government was “seriously concerned” about the yen’s decline and would respond to any “excessive” moves.

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A man has been arrested in connection with the Westminster honeytrap scandal that allegedly targeted a series of male politicians, staffers and journalists. 

The Metropolitan Police said on Wednesday that a man was arrested in Islington, north London, on suspicion of harassment and offences under the Online Safety Act.

Earlier this year a string of men working in or around politics said they had received unsolicited messages from senders calling themselves either “Abi” or “Charlie” – and some replied with explicit photos of themselves.

Former Tory MP William Wragg resigned the party whip after admitting handing over fellow politicians’ phone numbers to a suspected scammer linked to the saga.

Big share price moves in Europe today include UK fund manager Liontrust, Danish cable manufacturer NKT and UK investment trust Witan:

Liontrust: Shares in the UK asset manager slipped 2.7 per cent after it reported a 23 per cent fall in annual profit.

NKT: Shares in the Danish cable manufacturer rose 2.9 per cent a day after it announced the €192mn acquisition of rival cable producer, Portugal’s SolidAl.

Witan: Shares in the London-listed investment trust advanced 4.4 per cent after it announced plans to combine assets with Alliance Trust in a new £5bn entity called Alliance Witan. 

A consortium led by French investor and Onepoint chief executive David Layani has withdrawn its leading offer for Atos, the heavily indebted French IT services group, while Czech billionaire Daniel Kretinsky has indicated he wants to reopen discussions. 

The offer — which included the conversion of about €2.9bn into equity and a €250mn injection — had been picked by Atos’s creditors over Kretinsky’s earlier this month. But in a surprise change, Layani’s team has now withdrawn from the process, Atos said on Wednesday.

“Discussions are continuing with the representative committee of creditors and certain banks on the basis of this proposal with a view to reaching an agreement as soon as possible,” the company said, reminding shareholders that any restructuring plan will result in “massive dilution”. 

European equity markets rose early on Wednesday, with basic materials and real estate groups among the best-performing stocks.

The region-wide Stoxx 600 added 0.3 per cent and Germany’s Dax rose 0.5 per cent. France’s Cac rose 0.4 per cent and London’s FTSE 100 gained 0.3 per cent.

Contracts tracking Wall Street’s S&P 500 and the tech-dominated Nasdaq 100 both rose 0.1 per cent ahead of the New York open. 

“The fact that the market is moving in small amounts and on low volume should tell us . . . that investors, whether bullish or bearish, do not have much enthusiasm or capital to really move prices,” said Mike Zigmont, head of trading at Harvest Volatility Management.

Privately held Czechoslovak Group (CSG) has cleared the final regulatory hurdle for its $2bn takeover offer for Kinetic, one the largest US makers of small arms ammunition, paving the way for a shareholders’ vote next week.

The Committee on Foreign Investment in the United States (Cfius) approved the bid, Kinetic’s parent company Vista Outdoor said late on Tuesday.

Prague-based CSG has been in a takeover battle for Kinetic since late last year and raised its bid slightly earlier this week. The bid has been recommended to shareholders by the board of Kinetic’s parent company, Vista Outdoor, which also makes outdoor sport equipment.

Dallas-based investment firm MNC Capital Partners is instead offering to buy the whole of Vista for $3bn, echoing Republican warnings that CSG presented a national security risk for the US, as a foreign owner of ammunition supplies at a time of worldwide shortages of shells.

Alliance Trust has announced a merger with fellow British investment trust Witan in a deal that will give the newly formed entity net assets of around £5bn, the latest example of consolidation in the sector. 

Alliance Trust said on Wednesday that it expected the combined vehicle, named Alliance Witan, to lead to lower fees for investors and eligibility to join the FTSE 100 “in due course”. 

It added that Witan shareholders who roll over into Alliance Witan “will benefit from an immediate uplift in the value of their shareholding to the extent that Alliance Trust shares are trading at a tighter discount to net asset value”.

The deal is expected to be completed by early October. 

Japanese equities led gains in major Asian equity markets on Wednesday as investors bought up some of the country’s high-end manufacturing groups.

The country’s benchmark Topix rose 0.6 per cent with rallies in semiconductor precision tool manufacturer Disco Corporation and robot manufacturer Keyence contributing the most to the increase. The exporter-oriented Nikkei 225 added 1.4 per cent.

In currency markets, the Australian dollar surged 0.6 per cent against the US dollar after the Australian Bureau of Statistics reported that inflation rose more than expected in May, complicating the central bank’s path to interest rate cuts.

China’s small-cap CSI 2000 index added 1.9 per cent to pare back some losses from Monday’s sell-off.

Wall Street Journal reporter Evan Gershkovich appeared in a Russian court on Wednesday to stand trial in a secret proceeding on charges of espionage amid US efforts to secure his release in a prisoner exchange. 

Video footage published by state media showed Gershkovich standing in a glass cage for defendants at the Sverdlovsky district court in Ekaterinburg, a city in Russia’s defence industrial heartland in the Ural Mountains.

Russian officials have accused Gershkovich of working for the CIA to obtain “secret information” about production and repair efforts at Uralvagonzavod, a major tank factory in the region, but provided no evidence of his guilt or any information about the duration and scope of the trial.

The WSJ vehemently denies the charges against Gershkovich, whom the US has declared wrongfully detained.

China’s CSPC Pharmaceutical Group will begin human trials of an mRNA vaccine it developed to treat certain cancers after winning regulatory approval.

“The product is the world’s first mRNA-LNP-based cell therapy product approved for clinical trials,” the company said.

The treatment uses the same mRNA system pioneered by BioNTech/Pfizer and involves inserting fragments of mRNA into lipid nanoparticles that can enter cells to change their genetic code.

The vaccine was cleared for human trials in China for treating myeloma cancers, which affect white blood cells. The company says it has potential for treating autoimmune diseases, including lupus.

CSPC’s Hong Kong shares rose 3.1 per cent on Wednesday, while the city’s broader Hang Seng index was flat.

The Australian dollar strengthened 0.5 per cent against its US counterpart after the country’s consumer price index came in stronger than expected.

The currency rose to A$0.67 per dollar, while the country’s benchmark S&P/ASX 200 index shed 1 per cent. Retailer Harvey Norman led losses with a 7.4 per cent drop.

On Wednesday the Australian Bureau of Statistics reported that inflation rose more than expected in May, complicating the central bank’s path to interest rate cuts.

Elsewhere in the region, Japan’s Topix added 0.7 per cent to come within touching distance of its record high set in March.

Chinese and Hong Kong markets edged down while the Indonesian rupiah weakened 0.4 per cent against the dollar.

Australia’s consumer price index rose to 4 per cent in May, accelerating from a 3.6 per cent rise in April and complicating the path to rate cuts for the country’s central bank.

The increase was higher than the 3.8 per cent median forecast from a Reuters poll of analysts and was driven higher by higher housing and transport costs, according to the Australian Bureau of Statistics.

Although fuel prices fell in month-on-month terms, they rose 9.3 per cent year-on-year from 7.4 per cent in April.

The Reserve Bank of Australia held rates last week at 4.35 per cent, but has warned that further tightening cannot be ruled out.

Julian Assange has submitted a guilty plea as part of a deal struck with the US Department of Justice to end a legal saga between Washington and the founder of WikiLeaks. 

Assange entered the plea on Wednesday in federal court in Saipan, a US territory north of Guam, according to media reports.

According to court documents filed by prosecutors on Tuesday, the WikiLeaks founder was expected to plead guilty to one charge of conspiracy to obtain and disseminate classified information linked to US national defence. 

Assange has already served 62 months in a UK jail and prosecutors are not seeking additional imprisonment.

Events: The US, Japan and South Korea hold their first trilateral industry ministers’ meeting in Washington. Solomon Islands Prime Minister Jeremiah Manele meets Australian counterpart Anthony Albanese in Canberra.

Economic data: Australia announces its May consumer price index. Singapore releases manufacturing output figures for May.

Corporate updates: Chinese gaming and technology group NetEase hosts its annual meeting.

The US subsidiary of one of China’s largest state-owned oil companies has been fined $14.5mn for “misclassified” export documents, officials said on Tuesday.

An investigation found that PetroChina International America “reported inaccurate information” to the database used by exporters declaring shipments out of the US. The company misclassified diesel fuel shipments as mineral oil for export transactions to Mexico.

PetroChina International America “misclassified or undervalued millions of dollars in petroleum exports”, head investigator Mark Dawson said. The probe was jointly launched by the US justice, homeland security and commerce departments.

The PetroChina unit cooperated fully with the investigation and has “enhanced its compliance program”, the Department of Justice said.

FedEx shares surged in extended trading as it issued a rosy outlook and announced plans $2.5bn share buybacks for the current fiscal year.

The delivery company, considered a bellwether of global economic growth, said it expects low-to-mid single-digit revenue growth in the current fiscal year and earnings per diluted share to be between $18.25 to $20.25 a share.

Analysts had forecast revenue growth of about 3 per cent and earnings of $20.15 a share.

FedEx reported net income of $1.47bn in its fourth quarter on revenue of $22.1bn. The group also announced $2.5bn of stock repurchases for fiscal 2025.

FedEx shares leapt 15 per cent in after-hours trading on Tuesday.

Shares of swimming pool groups were among the worst performers on Wall Street after one of the sector’s top players slashed its full-year outlook on subdued consumer spending on big-ticket items.

Louisiana-based Pool late on Monday said construction activity could be down 15 per cent to 20 per cent for the year. The company said its year-to-date sales are down about 6.5 per cent from a year ago.

Pool shares closed 8 per cent lower on Tuesday, making them the worst performer in the S&P 500.

Smaller pool maker Latham Group sank 12.7 per cent, while pool supplies groups Hayward Holdings and Leslie’s dropped 9.1 per cent and 4.8 per cent, respectively.

US stocks snapped a three-day losing streak on Tuesday, thanks to a rebound in Big Tech stocks.

The S&P 500 rose 0.4 per cent, led higher by a near-7 per cent increase for chip designer Nvidia. The tech-dominated Nasdaq Composite climbed 1.3 per cent.

Nvidia had shed more than $500bn in market value since last week, but bounced back on Tuesday with its strongest one-day gain in about a month.

Tuesday’s moves were the latest illustration of how a small number of megacap companies have been driving the recent market rally, with the index climbing despite declines for more than three quarters of individual companies.

Shares of electric vehicle start-up Rivian soared more than 35 per cent after Volkswagen announced a plan to invest up to $5bn as part of a software partnership.

The tie-up comes as VW looks to enhance its EV offerings in the face of sophisticated competition from Tesla and Chinese rivals. Its in-house software developer Cariad has struggled to deliver products on time.

Upon agreement of the 50/50 joint venture, VW would receive “immediate access” to Rivian’s EV software for use in its own cars.

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