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Doubled at halftime for MORNING BID AMERICAS
What's important in the U.S. and Global Markets Today By Mike Dolan. Editor-at-Large for Finance and Markets The first half of 2026 is over as the whistle blows. The AI industry has had a great year despite the energy-shocking, four-month-long Iran war, and the geopolitical tensions over Venezuela, Greenland, and NATO. Chip stocks have more than doubled. Below, I will go into more detail. Check out my most recent column about the risks that remain around the AI boom, even as bubble concerns are waning. Watch the new episode of Morning Bid, a special mid-year edition with Markets Columnist Jamie McGeever. Subscribe to the Morning Bid podcast to hear journalists discussing the latest news in finance and markets seven days a weeks. Also, subscribe to Jamie McGeever's Trading Day newsletter. DOUBLED IN HALF TIME The so-called hyperscalers have pumped up AI?capex, which has led to a trebling or quadrupling of many chip stocks this year. The U.S. SOX index had its best quarter ever in the second quarter, but the Magnificent 7 - who are responsible for most of the spending - have experienced a dreary year so far. The oil prices are back to pre-Iran War levels. Meanwhile, all eyes will be on the planned peace talks in Doha, scheduled for Tuesday, after weekend military flareups. Recent macro releases indicate that the U.S. may be running hot. The quarter ended with a positive note for Asia's big chip-stock winners, and Wall Street is now focused on the June jobs report, due Thursday, during this holiday-shortened week. The U.S. consumer confidence update for June is scheduled for Tuesday. Also, the May U.S. job openings are on the agenda. The narrow U.S. Supreme Court decision that President Trump could not fire Fed Governor Lisa Cook before the case against her was heard and proven on Monday, was another big development. It's another matter if she is found guilty. Japan's yen has continued to fall to its lowest level in 40 years on the FX market, with no intervention by authorities despite repeated warnings. Investors are becoming increasingly concerned about possible official intervention to support the currency. Speculative short positions have reached their highest level in two years. Comcast's stock ended Monday almost 5% higher after it announced that it would be splitting its media and entertainment division from its?communications unit, spinning out NBCUniversal, Sky and into a separate company. Chart of the Day In 2026, the halftime whistle has already blown. And?chips? are the clear winners. Even that is an understatement. Intel, Marvell Technology and Micron Technology shares have more than tripled in value. Sandisk's share price has risen more than 700%. But the companies that are doing the AI-related spending, which is driving demand for these chips, are also suffering. The Magnificent Seven of U.S. Tech Megacaps, once a 4% loss for the year. Microsoft is down 24% while Meta is down nearly 15%. Watch today's events * U.S. May ?JOLTS job openings (10 a.m. EDT), June consumer confidence (10 a.m. ?EDT) Nike's earnings in the U.S. Beth Hammack, Cleveland Fed's Beth Hammack, speaks Want to receive the Morning Bid every morning in your email? Subscribe to the newsletter by clicking here. Follow us on LinkedIn, X and ROI. The opinions expressed by the author are their own. These opinions do not represent those of News. News is bound by the Trust Principles to maintain integrity, independence and freedom from bias. (By Mike Dolan).
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VEGOILS - Palm down on weaker Soyoil and the prospect of increased production, but logs a monthly gain
Malaysian palm futures declined?on Tuesday as soft soyoil pressured the market and an anticipated increase in production pushed the price up. However, the contract still recorded a'monthly gain. The benchmark palm oil contract for September delivery at Bursa Derivatives Exchange fell 39 ringgit (0.85%) to 4,549 Ringgit ($1,114.40). This month's contract saw a gain of 0.31%, ending two consecutive months of declines. Markets traded lower as a result of a 'weakness in the soybean oil markets during Asian hours. The expectation that output will rise in the next few weeks also weighed on sentiment. Dalian's palm oil contract fell by 0.55%, while the most active soyoil contract dropped by 0.14%. Soyoil prices at the Chicago Board of Trade fell by 0.33%. As palm oil competes to gain a share in the global vegetable oils industry, it tracks the price fluctuations of competing edible oils. Investors are looking forward to possible U.S.-Iran discussions in Doha, amid a strained ceasefire in 'the four-month old war. Palm oil is a less attractive feedstock for biodiesel due to the weaker crude oil futures. According to cargo surveyors, Malaysian palm oil exports rose from 4.7% to?11.9% in June compared with a month ago. The dollar's value against the ringgit has fallen by 0.37%, making palm commodities slightly cheaper to buyers who hold foreign currencies. Indonesian Palm Oil Association statistics show that Indonesian palm oil exports in April included 2.78 million tons of refined products, up from 1.78 million tonnes in the same period last year. ($1 = 4.0820 ringgit)
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AfD leader vows restore German-Russian relations as she seeks chancellery
Alice Weidel of the far right Alternative for Germany said that Germany should stop a boycott against Russian oil and gas to boost its flagging economy. She was describing the party's ambitions to form a national coalition. Weidel claimed that the AfD could win two important federal state elections within the next few months. He described them as a milestone towards securing the position of German chancellor at the next national election due in 2029. The success of Made in Germany was due to the cheap energy that Russia provided. Weidel stated that we need to get it back. "The loss has put us years behind." The loss of hundreds of thousands of jobs has been devastating. "It has made us dependent upon the United States who sells us electricity at much higher prices." SEES ELECTIONS as 'DECISIVE MOLESTONES Before sanctions were imposed in 2022 over Moscow's invasion into Ukraine, Russia accounted for more than one-third of Germany's crude imports as well as more than half its natural gas. Germany is also struggling to recover from shock following the closure of the important undersea Nord Stream Pipeline, which was crippled in September 2022 by explosions. After a sharp rise in energy prices, the country's industrial sector is still in a rut. Volkswagen, the car giant, is also considering cutting up to 100,000 jobs. Weidel's remarks highlight the fragility of the Western coalition that supports Ukraine. Germany's government supports Ukraine but the German population is divided. Weidel made the remarks ahead of September elections in two key eastern German ?states, Saxony-Anhalt and Mecklenburg-Vorpommern, where the AfD is dominating polls. If the AfD wins control, these regional governments will challenge Berlin's migration policy, which they claim is "too generous", rejecting the financial burden placed on local governments. It would?upend the consensus-model of committee-style governance in Germany and give the AfD the opportunity to gain national power. "Saxony-Anhalt and Mecklenburg-Vorpommern are decisive milestones," Weidel said. "If we win in Saxony-Anhalt, then Mecklenburg-Vorpommern will probably follow. "I can see AfD at the chancellery by the next election or after." A victory of the far-right party, Saxony-Anhalt, would be a blow for mainstream parties, such as the Christian Democrats of Chancellor Friedrich Merz, who have refused to cooperate with the AfD. Voters could be influenced by the lower energy costs in Russia and the possibility of a cheaper alternative. In the East, where the Soviet Union ruled until the fall the Berlin Wall over 35 years ago, Germany's relationship with Russia is more important. Many in the east have a positive view of Russia, but a negative one towards Germany's protector, the United States. "WE WILL NOT?TURN EVERYTHING OFF ITS HEAD" Weidel made his comments about Russia after a senior AfD legislator Markus Frohnmaier visited Russia earlier in the month. He met with Alexei 'Miller, head of Russian 'energy giant Gazprom, and demanded a reopening for the Nord Stream pipeline. Frohnmaier rebuffed critics of his trip and said he understood U.S. Investors were examining reopening Nord Stream to Germany. This could mean that Germany would have to pay a fee in order to obtain Russian gas. He said: "We must be very careful that Germany does not miss this window of opportunity in order to get back on the Russian market." Mr Miller stated that it would be three months before the gas supply was resumed. Roderich Käsewetter is a Christian Democrat member of the Merz parliament who said that the AfD’s pro-Russian position?distorts the public discourse in Germany. Kiesewetter stated that the AfD is using the romanticisation of Russia, especially with a view to the upcoming elections in Eastern Germany. Weidel denied that her party is extremist. This was classified by Germany’s spy agency in the past year. She said, "The way that we view ourselves and how our political opponents judge us are very different." "People describe us as far-right. We are in fact a party of the average person. "We will not change everything if we are elected." (Reporting by John O'Donnell, Editing by Andrew Heavens).
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Unexpectedly, German unemployment drops in June
Labor?office data showed on?Tuesday that the number of unemployed in Germany dropped unexpectedly?in June. According to a recent poll, analysts and economists predicted a rise of 7,000. The total adjusted number of unemployed people dropped to 2.984 millions, below the '3 million mark. In June, the seasonally adjusted unemployment rate remained at?6.3%. This is unchanged from previous months. In a recent statement, the head of the Labour Office, Andrea Nahles, said that there was little evidence of change on the labour market. The unemployment rate is only marginally decreasing, while the employment that is subject to Social Security contributions continues its downward trend. In June, the total number of?unemployed people was 2.94 million. This is a 15,000 decrease from the previous month. Economists have warned that an increase in unemployment is likely to occur in the next few months, as companies tend to 'delay staffing decisions as they react geopolitically such as with the Iran conflict. The labour office registered 648,000 job openings in total, which is 16,000 more than the previous year. Reporting by Friederike Hiene Editing by Miranda Murray, Linda Pasquini
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EU announces new steel import quotas in order to protect the industry from overcapacity
The European Commission announced quotas as part of a new system that limits duty-free steel imports to the European Union. This was done to protect the?steel sector and to increase capacity utilization to 80%. The EU's annual tariff free import quotas have been slashed from 18.3 million to 18 350,000 tonnes. A duty of 50% for steel products imported outside the quota has also been introduced. The remaining half of the import quotas is available to all trading partners including FTA partners. The commission said that many of these partners would receive country-specific quotas proportionate with their historical volumes. It said that "most of the EU FTA partners' market access will be reduced significantly less than the average 47% reduction foreseen by the Steel Regulation." The Commission stated that a "significant number" (or partners) have agreed to these allocations. The Commission emphasized that the rules were needed to protect the European industry against overcapacity and dumping elsewhere in the world. It said that "persistent global steel overcapacity remains a serious problem on the global stage and continues to distort international markets." The report added that the measure would "restore fairness to a market affected by distortions due to overcapacity." Reporting by Bart Meijer and Phil Blenkinsop; editing by Sudip K. Gupta
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British auto lobby group warns that post-Brexit regulations could cost the industry up to PS1.4 billion
The main British car lobby estimated that British electric vehicle manufacturers will have to pay PS1.4 billion ($1.85 billion) in tariffs, if the European Union does not reach a'solution' on the?local?content?requirements (also known as?rules of origin). In a press release, the Society of Motor Manufacturers and Traders said that the imposition of rules on sourcing parts will be delayed again in '2023 and now is due to come into effect 'from January. This will result in a 10% duty on 70% of battery -electric and plug in hybrid models sold?within the EU. This would reduce the competitiveness and affordability of many models, according to SMMT. Britain and 'the EU' are each other’s biggest market for exports EVs. These EVs are being marketed as a 'alternative fuel-powered vehicles that emit carbon dioxide, such as gasoline or diesel. The extension was made after some carmakers threatened to shut down their plants in Britain. (Reporting and editing by Thomas Derpinghaus; Muvija M. and Nick Carey)
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Shell anticipates a 65% increase in global LNG demand between 2050 and 2050
Shell's annual report said that the global liquefied gas demand is expected to increase by 65% by 2050. This will be driven by Asia, as they seek "lower-emission alternative" fuels than coal, and data centres are driving up power consumption. In its LNG Outlook 2026, the world’s largest trader in supercooled fuel predicted that global demand would reach 700 million metric tonnes per year by this date. The report said that the LNG trade was expected to grow in 2026 from 422 million tonnes in 2025. The Strait of Hormuz is currently experiencing severe disruption, which has caused around one-fifth of the global LNG supply to be cut since the Middle East conflict began. Shell stated that the global LNG trade could return to its previous level in 2026 if shipping in the Strait returns to normal in this summer. Then, in 2027 it will'return to growth,' Shell added. Cederic Crémers, Shell's President of Integrated Gas, stated in the report that the conflict had created a "system-wide shock" with disruptions affecting all sectors of the economy. However, the LNG industry was resilient and able?to adapt to changing market conditions. The company stated that recent growth in LNG supplies and regasification facilities had improved market resilience, and helped to limit the impact of "the disruption of shipping through Hormuz". The ramp-up of liquefaction plants in North America and improved performance at existing facilities, as well as slower Asian LNG imports, have helped to offset the reduced Middle East supply. The U.S. and Israeli war against Iran has disrupted global LNG outlooks, causing prices to rise, destroying Qatar's export infrastructure, and delaying new supplies, while casting doubt on the demand of price-sensitive Asian customers. Analysts predict that higher prices will curb South Asian demand. Buyers may switch to other LNG sources, or use coal and domestic gas. According to Kpler's data, Asian LNG imports in the first half 2026 were down by nearly 4% at 127.70 millions tons when compared to the same period last year. Shell reported that although Asian LNG spot prices were above $20 per million British Thermal Units at the height of the Middle East Crisis, they are still well below the levels of 2022 after Russia invaded Ukraine. This reflects a greater resilience on the LNG market. The Asian spot LNG price was last $15.35/mmBtu. This is a four-month low, as the market remains 'hopeful' about an end to the conflict. NEED FOR NEW INVESTMENTS By 2030, it is expected that 180 million tons of LNG will be available on the market. This will improve the affordability and availability of gas as well as open up new markets. South and Southeast Asia is expected to account for 40% of the global LNG imports in 2050, as countries look to lower-emissions alternatives to coal in order to meet a rapidly increasing energy demand. The report stated that data centres in more mature Asian markets, such as Japan are emerging?as a source of new power demand. Shell stated that LNG would continue to play an important role in ensuring the energy security of Europe and in balancing intermittent renewable energy generation, as domestic gas production declines. In order to meet the rising demand for LNG, it will be necessary to invest in new projects in the 2030s and 2040s. Around 200 million tons of LNG per year are needed, in addition projects that are already in construction. Cremers stated that, "While additional investment is required in both the supply and demand infrastructure, the outlook for the long term remains positive and LNG will remain a stabilising factor in the global energy systems."
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Volkswagen CEO targets power switch alongside deep cuts
Volkswagen CEO Oliver Blume’s plan to close up to 100,000 high-cost German plants and cut down on jobs is more than just a cost-saving measure. It could also be an attempt to change a corporate structure which has 'long held back changes. Sources say that Europe's largest automaker is considering its biggest-ever restructuring. This includes doubling the planned job cuts, and closing four German factories. It does this to combat tariffs, rising costs, and increasing competition from Asia. The company is also considering plans to separate passenger cars and parts into separate divisions. This could be a test of the limits of the Volkswagen Law, which enshrines the influence of workers and Lower Saxony as the second largest shareholder. The law limits the ability of management to close plants. The law only applies to VW AG, which controls six of the core German factories in the VW Group. But creating separate entities would allow a way to circumvent these restrictions. Three legal and financial sources have said that spinning off the passenger-car division -- which is heavily exposed to tariffs and weak European demand, as well as a price battle in China -- would be an important step. This would lead to a confrontation with powerful political and union stakeholders. The IG Metall has warned that Blume is in for a fight because the carve out plans are an "attack on VW law". Investors say that with the crisis in the industry, Volkswagen's share price nearing 16-year lows, and rising internal tensions, management has no choice but to change the status quo. Ulrich Hocker of shareholder lobby group DSW said that labour's influence is "excessive", and it has its roots in an old era. Volkswagen has a long history of failed compromises, with Lower Saxony and labour holding a majority in the supervisory board. He said: "At some stage, everyone will realise that major changes are needed to ensure this company's survival." SPINNING THE "BAD BANK" In practice, however any spin-off still requires shareholder approval of over 80%?under Volkswagen law. This effectively gives Lower Saxony – with 20% of the voting rights – a blocking stake. One of the sources stated that "Lower Saxony will never support a vote that would diminish its own power." UBS anticipates a deal, and warns that any restructuring will most likely be accompanied by provisions as well as a downward revision of Volkswagen's outlook for 2026. Olaf Lies is the Lower Saxony premier and a member of the supervisory 'board. He said that the state would not agree to measures which weaken the workers' influence, as this was "integral to Volkswagen's success". Blume, too, has floated the idea of shifting production from China to Germany in order to help?underused factories. Investors, including Porsche SE, have criticized Volkswagen's sprawling corporate structure. It spans 10 brands. The company could take a leaf out of Siemens’ playbook and streamline its empire in order to close the gap that has existed between its market value and what analysts attribute to its assets. Volkswagen's major stakes in Traton, a truck manufacturer, and Porsche, a sports car maker are worth more than 50 billion euros (EUR44 billion), which is the market value of the entire group. Citi analysts believe that carving out core operations could unlock value. They compare this move to creating a "bad-bank" which would isolate weaker businesses and leave behind a holding company with a smaller footprint, less vulnerable to geopolitics or weak growth.
Stocks soar in stellar quarter, dollar sinks gold, yen and other currencies
On Tuesday, global stocks were on track to achieve their best performance in the second quarter of six years. Meanwhile, a resurgent US dollar drove the yen down to its lowest level in four decades and?on course for a fourth consecutive quarterly increase.
In the past three months the Strait of Hormuz reopened haphazardly and gradually as the hostilities between Iran and the U.S. waned, resulting in a fragile ceasefire that knocked 20% off of the price of crude oil. A dramatic shift has also occurred in the expectations of U.S. interest rate, against a backdrop that is dominated by a boom in artificial-intelligence stocks.
The MSCI All-World Index has increased by almost 14% in the past three months to new highs, its best performance for the second quarter since 2020.
The majority of gains are due to a fervent rally in everything AI-related. This is especially true in Asian markets where indexes from Japan, South Korea, and Taiwan have seen double-digit percentage increases. The S&P500 is up 14%, and the Nasdaq has gained 20%.
Guy Miller, chief strategist at Zurich Insurance Group, said: "The theme that has disappeared is monetary support." The futures market had been pricing in further rate reductions at the start of the year. Now, that's changed. This is largely due to the current situation in Iran and the increased commodity prices.
"We don't expect any further central bank cuts, but we also do not anticipate a new cycle of hikes."
Europe's STOXX 600 index, which doesn't have as many AI beneficiaries than many Asian or U.S. indices, is up 0.65% and heading towards a quarterly gain of 10%. It has risen each month since March.
U.S. stock futures rose 0.2%, indicating a modest rise at the opening bell.
THE WINNING DOLLAR
This quarter, the dollar was the biggest winner on the foreign exchange markets. It gained 1.4% against a basket major currencies.
Investors are accumulating bullish positions in record numbers thanks to an astonishing re-pricing the U.S. rate outlook. The interest rate outlook has changed from one of cuts to increases, due to the surprising power of the U.S. economic and the persistent inflationary pressures that go beyond energy prices.
The rise of the dollar has caused gold to fall to its biggest quarterly drop in over a decade. Meanwhile, the yen is at its weakest level in 40 years and traded around 162.23 per dollar on Monday. The yen's weakness in 40 years has caused traders to be on edge, and Finance Minister Satsukikatayama issued another warning.
Kevin Warsh will address the European Central Bank annual meeting in Sintra, Portugal on Wednesday.
Warsh's emphasis on inflation during his first meeting as Fed head earlier this month led traders to price in a rate increase by October. However, some economists think the economy is strong enough and the inflation obvious enough to suggest that an increase could be as early as July.
Isabelle Mateos y Lago is the chief economist of BNP Paribas.
"That's certainly not our case, but there's a good chance that they'll want to do it and get the issue out of their way."
Before Warsh appears, on Tuesday, there are a number of European inflation data, the U.S. consumer sentiment data for June, and the JOLTS monthly hirings-and-firings report. The clock is ticking down to the U.S. jobs report due out Thursday. (Additional reporting from Dhara Ranasinghe and Tom Westbrook, both in London; editing by Muralikumar Anantharaman and Stephen Coates)
(source: Reuters)