Time to ‘take profits’
Bloomberg
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Bank of America Securities sees trouble ahead for the stock market. Investors should exercise caution regarding equities as an increasing number of “bear-market signposts” point to an approaching top, strategists led by Savita Subramanian wrote in a note dated June 5. Some 70% of those signals have recently been triggered, in line with the average observed during prior market peaks, the strategists said. The benchmark S&P 500 Index was “statistically expensive on 17 of 20 metrics, and trades rich versus its tech bubble metrics on eight,” Subramanian said. Their advice to investors? “Take profits.” What You Need to Know TodayA federal judge struck down a $100,000 fee Donald Trump ordered for H-1B visa applications, providing a reprieve for US technology companies that rely on hiring skilled foreign workers. The US president’s decree dramatically increasing the cost of the popular visa is an unlawful tax and must be vacated, US District Judge Leo T. Sorokin in Massachusetts said in a Monday ruling. The government is likely to appeal the decision, which is a blow to Trump’s campaign to restrict immigration. The European Union has a Taiwan problem. The bloc is worried about signs that Trump is looking to ingratiate himself with Chinese President Xi Jinping as a means of warming up US-China relations. In doing so, the thinking goes, he may be giving Beijing a greenlight for further incursions and provocations tied to the island democracy. Put that together with increasing Chinese aggressiveness in the region and you’ve potentially got a recipe for trouble. In a worst-case scenario of a US-China war over Taiwan, research from Bloomberg Economics shows the EU economy would suffer a hit equivalent to about $2 trillion over the first year. Germany’s economy alone would contract by about 14%, roughly twice as much as the US or China. Those conclusions underline one of the main lessons from Trump’s attack on Iran: the US may call the shots in global affairs, but Europe often pays the bigger price.  SpaceX’s initial public offering is said to be well oversubscribed as demand builds for a potentially record-setting debut. Banks leading the offering are expected to stop taking orders from institutional investors on Wednesday after the market closes in New York. Anticipation is growing for the IPO, expected to be the biggest ever and topping Saudi Aramco’s $29.4 billion debut in 2019. The company has disclosed new sources of revenue in recent weeks, seeking to burnish its AI clout. On Friday, SpaceX announced a deal with Alphabet’s Google that would see the latter pay $920 million a month as part of a cloud services agreement. SpaceX previously disclosed a similar pact with Anthropic. There is still time though if you want a few shares for yourself. Retail investors can still submit orders for SpaceX shares on some platforms beyond the Wednesday deadline. The company is allocating as much as 30% of the offering to retail, Bloomberg News has reported. The value of private equity technology deals has plunged since the end of last year as investors grow more cautious about what companies are worth in the age of artificial intelligence, according to a Bain & Co. Global buyout deal value fell 70% to $20 billion in the first quarter as fewer large deals were completed. Private equity firms have struggled for several years to sell assets at higher prices than what they paid and return capital to investors, and AI’s threat to disrupt software companies, in particular, has exacerbated those woes. Avis’ Shock Split With Vendor Revives Credit’s Big Software Fear Spring Sale: Save 60% on your first year Get the numbers behind the narratives. Enjoy unlimited access to Bloomberg.com and the Bloomberg app, plus market tools, expert analysis, live updates and more. Offer ends soon. Unlock 60% off
What You’ll Need to Know TomorrowFor Your CommuteBloomberg Power Players - New York: Set against the backdrop of the US Open Tennis Championships, Bloomberg Power Players returns to New York on Sept. 10, bringing together the leaders shaping this global industry. From athletes and team owners to commissioners and investors, this event will gather the most influential voices for market-moving conversations on the multitrillion-dollar sports economy. Learn more here. More from BloombergEnjoying Evening Briefing Americas? Get more news and analysis with our regional editions for Asia and Europe. Check out these newsletters, too:
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