Virgin Australia to Relist in Biggest Asia Airline IPO for a Decade
Good morning, it's Carmeli from a cold Sydney here to bring you the latest news...
Today's must-reads:
• Virgin Australia to relist
• GDP misses estimates
• Tesla under scrutiny
Australian equities investors will soon be able to get a slice of Virgin Australia in their portfolio, with the airline set to relist in an initial public offering worth A$685 million ($443 million). The Bain Capital-controlled airline is betting that investor appetite is ripe for a listing, despite the turmoil caused by US President Donald Trump's trade war. The private equity giant is selling 30% of the airline and will continue to hold about 40%. Qatar Airways has a 25% stake.
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Trump's 2026 Budget Proposal: 4 Things Retirees Need To Know
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According to Congressional Budget Office analysis, if Trump's budget proposal, currently being debated in Congress, raises the federal deficit by $2.3 trillion over the next decade, it would automatically trigger spending cuts, including a projected $500 billion cut to Medicare. Such cuts may lead to reduced payments to providers, potentially affecting seniors' access to healthcare services. An analysis by the Medicare Rights Center, an advocacy organization, found that the 'bill would undermine access to long-term care by shifting costs to states, likely resulting in cuts to HCBS (Home-and Community-Based Services). It would also make it harder for people to qualify for Medicaid coverage and avoid gaps in care.' Find Out: Key programs under the Older Americans Act, such as nutrition services and caregiver support, are at risk of significant funding reductions or elimination. For example, the National Council on Aging found that the Trump administration proposes to move the Aging Network Support program to the Centers for Medicare and Medicaid Services (CMS) and reduce the program's funding by over 40%. The program allows seniors to live independently in their homes. This matters for individuals saving for retirement, because adult children often incur significant costs for caring for their parents. According to an AARP study, 'On average, caregivers spend 26% of their personal income on caregiving expenses. One in three dips into their personal savings, like bank accounts, to cover costs, and 12% take out a loan or borrow from family or friends.' The budget proposes substantial cuts to Medicaid and the Supplemental Nutrition Assistance Program (SNAP), which could disproportionately affect low-income seniors who depend on these programs for healthcare and food security. 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The most popular stocks and funds investors bought in May
Signs of progress on US tariff agreements in early May offered some reprieve around trade tensions, prompting investors to be more "risk-on", driving stock markets higher. Following on from US president Donald Trump's pausing of many higher rate tariffs in April, the UK and US announced a trade deal on 8 May. This marked the Trump administration's first pact since it unveiled sweeping tariffs and included an agreement to lower levies on a certain number of UK car exports, among other points. Days later, the US and China announced that they had agreed to temporarily slash tariffs on each other's imports by 115% for 90 days, marking a major de-escalation in tensions between the two countries. However, the break from tensions was short-lived, as on 23 May Trump then threatened to raise tariffs to 50% on imports from the European Union (EU) and to put a 25% levy on Apple (AAPL) products unless iPhones are made in the US. Following conversations with European Commission president Ursula von der Leyen, Trump then said a few days later he had decided to hit pause on imposing higher tariffs on the EU until 9 July. Read more: ECB cuts interest rates for eighth time in a year Later last week, a US trade court then moved to block Trump from imposing his sweeping tariffs, having ruled that the president exceeded his authority when he used an emergency law to issue global reciprocal tariffs on US trading partners. A day later, however, an appeals court temporarily halted this order, allowing Trump to keep collecting tariffs for now. Capping off the month's trade developments, Trump said that he would double tariffs to 50% on imports of steel and aluminium. On the same day, Trump also claimed China had "totally violated" its trade truce with the US, an accusation which China fired back at Washington on Monday. After a call with China's president Xi Jinping on Thursday, however, both countries pledged to restart tariff and trade talks in the coming days. At the end of the month, investors were also focused on Nvidia's (NVDA) first quarter earnings, which came out on 28 May. Expectations have become increasingly high around the chipmaker's earnings, but the results appeared to pass muster this time round, with shares rising on the back of their release. In fact, the Magnificent 7 – comprised of Nvidia, as well as Tesla (TSLA), Meta (META), Apple (AAPL), Alphabet (GOOG, GOOGL), Microsoft (MSFT) and Amazon (AMZN) – were responsible for 62% of the S&P 500's (^GSPC) gains in May, according to financial research firm DataTrek. This contributed to the US blue-chip index clocking its best month of trading in May since 1990, though it is still less than 1% in the green year-to-date. Other markets also continued to rebound on tariff progress last month, with the UK's FTSE 100 (^FTSE) now up nearly 8% year-to-date, while the pan-European STOXX 600 (^STOXX) has advanced 9.3% so far this year. With that mind, here were the most popular stocks and funds with investors last month. Richard Hunter, head of markets at Interactive Investor, said: "May was an easier ride for investors, even though market movements continue to be dominated by tariff twists and turns." 'The early announcement of a trade deal between the US and the UK gave rise to hopes that others could follow in short order, although subsequent events put paid to that optimism," he said. "A court ruling that the tariffs were not legal was replaced by a temporary removal of that blockage, while in the final weekend in May the aggressive rhetoric towards other trading partners resumed." Oil major BP (BP.L) topped the most bought lists for Interactive Investor, Hargreaves Lansdown and Bestinvest, with investors appearing to take advantage of the fact that shares are trading at their lowest point in three years. Shares fell after BP (BP.L) reported that profits almost halved in the first quarter. The company reported an underlying replacement cost profit – a key metric used as a proxy for net profit – of $1.38bn (£1.02bn), falling short of the $1.53bn forecast by analysts polled by LSEG (LSEG.L). The figure also marks a 49% decline from the $2.7bn posted in the same period last year. Read more: UK 'bargain' stocks that have outperformed the market long-term The company has come under pressure from the decline in oil prices, which have fallen amid concerns that a tariff-induced economic slowdown would weigh on demand for fuel. Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: "BP's shares came under more pressure after its first set of quarterly results since its strategy reset unimpressed the market. "Despite reductions in costs and investment expenditure, debt moved in the wrong direction. But plenty of investors appear hopeful that the transformation plan will start to bear fruit and have been buying shares in the hope of an uplift." Chipmaker Nvidia (NVDA) remained another top 10 stock buy for investors on Interactive Investor, Hargreaves Lansdown, Robinhood (HOOD) and Bestinvest's platforms. Following a drop in Nvidia's (NVDA) share price in April, as Trump's trade war ramped up, the stock recovered in May amid the reprieve on tariffs. The stock then climbed higher towards the end of the month, after the company unveiled a number of new technologies at the Computex tech expo in Taiwan, including developments around its robotics capabilities, among other updates. Stocks: Create your watchlist and portfolio This came a week before the Nvidia's (NVDA) update on its first quarter performance, which have become the most highly anticipated results of the earnings season, given the chipmaker's role as an enabler of AI. For the first quarter, Nvidia (NVDA) posted revenue of $44.1bn, which topped estimates of $43.3bn, though earnings per share of $0.81 were below expectations of $0.93. Shares popped on the back of the results, despite Nvidia (NVDA) warning of a $4.5bn charge from controls on its exports of its H20 chips to China. Excluding this charge, Nvidia (NVDA) said that earnings per share would have been $0.96 for the first quarter. "There remains significant appetite for chip star Nvidia (NVDA), given the demand for its products to power the AI revolution keeps powering upwards," said Streeter. "The company beat revenue expectations again last month, despite fresh restrictions on its exports to China." Investors continued to put money behind defence stocks last month, a trade which has become popular as European governments have pledged to spend more on this area. FTSE 100-listed firm Rolls-Royce (RR.L) remained one of the most popular stocks for investors in May, appearing on the lists of Interactive Investor, Hargreaves Lansdown and Bestinvest. BAE System (BA.L) also appeared on Hargreaves Lansdown and Bestinvest's lists, as another UK-listed company in the sector. "There's an expectation that the EU-UK trade deal will open up deep new pools of funding for British defence companies, as efforts are made to counter the heightened threat from Russia," said Streeter. Investors also continued to invest in Strategy Incorporated (MSTR), the software firm which is the world's largest corporate holder of bitcoin (BTC-USD). "It was an up-and-down month for MSTR with bitcoin highs supporting the share price, only for valuation concerns to take the shine off the crypto rise," said Robinhood (HOOD) UK lead analyst Dan Lane. "Robinhood (HOOD) UK investors are keeping the faith for now, with Coinbase (COIN) on the radar too after being included in the S&P 500 index during the month." UK high street stalwart Marks & Spencer (MKS.L) was another stock that investors appeared to take the opportunity to snap up amid a knock to its share price. The stock was on the most bought lists of Interactive Investor, Hargreaves Lansdown, Bestinvest and AJ Bell (AJB.L) in May. "Marks and Spencer's (MKS.L) cyber-attack disrupted stores and online ordering, causing a 16% drop in shares before starting to recover mid-month," said Hargreaves' Streeter. "Sentiment has been helped by an update showing the retailer is fighting to restore its systems from a position of resilience after a 22% uplift in underlying pre-tax annual profit." Passive funds continued to dominate platforms most bought lists, with US and global funds accounting for many of investors' popular choices. Funds that appeared on multiple lists, included Vanguard FTSE Global All Cap Index (0P00018XAR.L) and HSBC FTSE All World Index (0P00013P6I.L), which are exposed to the Mag 7 tech giants, among other major global companies. Read more: Stocks that are trending today While markets did see a recovery last month, Hargreaves Lansdown head of fund research Victoria Hasler said that "volatility abounded in May, with more tariff drama, cyber attacks and economic uncertainty." "This led some investors to turn to active managers to navigate the difficult environment, and the Artemis Global Income fund topped our list of most bought funds," she said. "Income strategies generally tend to be a little more defensive than the market as a whole, and the Artemis fund has a value bias which could have attracted investors. The other active fund in the top ten was also a global offering – the Rathbone Global Opportunities fund." Read more: How next week's spending review could impact your finances What is the Pension Investment Review? Bank of England governor expects interest rates and pay to decrease this yearError in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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Pound takes breather after hitting highest point against dollar since 2022
The pound pulled back slightly against the dollar on Friday in European trading hours, dipping almost 0.3% to trade around the $1.354 mark. Sterling's rally has sent it to its highest point against the greenback since 2022, but that's largely due to dollar weakness, analysts say. 'Domestic factors have also been supportive of sterling," said Matthew Ryan, head of market strategy at global financial services firm Ebury. Read more: FTSE 100 LIVE: Stocks mixed as traders weigh up Trump-Musk row and trade war developments 'This week's updated UK PMI figures provide reason for optimism, as the composite index was revised sharply higher to 50.3 in May (from the initial 49.4 estimate), i.e. back above the key level of 50 that separates growth from expansion. 'As we've been stressing for some time, Britain's economy should be well positioned to weather the tariff storm, while at the same time inflation is printing well above the Bank of England's 2% target." The dollar index ( headed 0.2% higher, meanwhile. The index tracks it against a basket of other currencies. The pound was almost flat against the euro following a Thursday interest rate cut by the European Central Bank (ECB). Read more: Average UK house price falls in May after stamp duty changes The bloc cut interest rates by a quarter of a percentage point for the eighth time in a year, as the bank attempts to support the euro economy after the turmoil caused by US president Donald Trump's trade war. The benchmark rate on the deposit facility has been reduced from 2.25% down to 2%, from a high of 4% toward the middle of 2023. Gold prices headed higher as economic uncertainty persists surrounding president Trump's trade tariffs. The yellow metal rose despite a strengthening dollar. Spot gold prices rose 0.4% to $3,364, while gold futures headed 0.3% higher to trade around $3,384. The weakness in the dollar in recent weeks has made it cheaper for buyers holding other currencies to snap up gold — a safe haven in uncertain times. "There is considerable geopolitical uncertainty with Russia-Ukraine, Iran, Syria and China driving people to buy gold... and although traders may not expect gold to rise as quickly, there is still plenty of upside," Daniel Pavilonis, senior market strategist at RJO Futures told Reuters on Thursday. Oil prices were on the back foot on Friday, pulling slightly lower amid concerns about oversupply and economic growth. Brent crude futures (BZ=F) fell 0.3% to $64.59 a barrel, while West Texas Intermediate futures (CL=F) declined 0.3% at $63.18 a barrel. Read more: The most popular stocks and funds investors bought in May Saudi Arabia has bee pushing for a major increase in oil production and has slashed prices for Asian buyers, signalling weaker demand, analysts said. The July price cut by Saudi Arabia, which is the world's biggest oil exporter, comes after the decision from the Organization of the Petroleum Exporting Countries and their allies — known as OPEC+ — to increase output next in to access your portfolio
