Issue #15 - Geopolitical Tensions and Monetary Policies

What’s in this issue;

In this issue, we're diving into the major events driving the market right now. It's been an active week on Wall Street, with fluctuations fueled by rising tensions between Israel and Iran and the Federal Reserve’s latest decision to hold its policy rate steady, even as it adjusts its economic forecasts.

With oil prices shooting up by 10% in June, concerns about global inflation are growing, affecting both consumer confidence and investor sentiment. We’ll also look at how investors are reacting, moving into safe-haven assets amidst market volatility affecting stocks and commodities alike.

As key central banks like the Fed, BoE, and BoJ prepare to tackle these challenges, all eyes are on their next moves. Plus, we'll highlight crucial economic data and trends from global PMI updates to consumer confidence reports, showing how interconnected geopolitical events and monetary policy really are in shaping market dynamics.

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What is Moving the Markets This Week

Wall Street ended the holiday-shortened week largely flat as investors weighed heightened tensions between Israel and Iran alongside the Federal Reserve’s latest monetary policy decision.

The conflict escalated with both countries exchanging missile strikes, while U.S. President Donald Trump announced he would decide within two weeks whether the U.S. would intervene militarily, keeping markets on edge and causing volatility in oil prices.

This uncertainty contributed to a cautious mood, with the S&P 500 slipping 0.2%, the Nasdaq Composite rising 0.2%, and the Dow finishing flat for the week.

Meanwhile, the Federal Reserve opted to keep its key policy rate unchanged, as expected, but updated projections for 2025 still showed two potential rate cuts.

However, the Fed revised its growth forecasts downward and raised estimates for unemployment and inflation.

Chair Jerome Powell emphasised the ongoing uncertainty from tariffs and signaled a wait-and-see approach, noting that the full economic impact of tariffs had yet to materialise.

This combination of geopolitical risk and monetary policy caution left markets subdued, with investors reluctant to make big moves ahead of further developments.

Oil Prices Surge, Inflation Risks Rise: Oil prices have jumped about 10% in June, and further disruption to Iranian oil exports or threats to the Strait of Hormuz could drive prices much higher. This raises the risk of global inflation and could undermine consumer confidence.

Safe-Haven Flows and Market Volatility: Investors are shifting into safe havens like the US dollar, gold, and Treasuries. Stock markets are vulnerable to a sharp selloff if the conflict widens, especially if energy supplies are hit or if Iran retaliates against US assets.

Central Bank Decisions in Focus: Amid the turmoil, key central banks (including the Fed, BoE, BoJ, and SNB) are meeting this week. Their responses to inflation and geopolitical risks will be closely watched.

Top Economic News

Global PMI Data and Trade Tensions in Focus

Early Purchasing Managers’ Index (PMI) survey data for the US, eurozone, UK, Japan, Australia, and India will be closely watched for insights into global economic trends and business confidence.

Ongoing tariff uncertainty and escalating Middle East tensions are weighing on sentiment, with oil prices surging nearly 10% in June, threatening to push inflation higher.

Source: S&P Global Market Intelligence

Inflation and Monetary Policy Watch: US and Canada

Fresh official inflation data for the US and Canada is set for release, alongside key consumer confidence surveys. These will help set expectations for central bank policy moves, especially as tariff impacts and oil price spikes could influence the inflation outlook.

Source: S&P Global Market Intelligence

US Market Sentiment and Geopolitical Risks

US equities faced late-week volatility due to renewed Middle East tensions, despite earlier gains from positive inflation and earnings reports. Consumer sentiment improved as inflation expectations softened, but geopolitical risks remain a key concern for markets.

Source: LifeTime Asset Management

Links to Full Reports:

S&P Global Market Intelligence: spglobal.com/marketintelligence/en/mi/research-analysis/week-ahead-economic-preview-week-of-23-june-2025.html

LifeTime Asset Management: lifetimeasset.com/top-financial-news-this-week-month-june-2025/

Looking Forward: What We Anticipate Next Week

A Busy Week for Markets, Fed, and Earnings Wall Street gears up for a packed week with major economic updates, Federal Reserve testimony, and a slate of big-name earnings.

Geopolitics are also in focus as investors watch the Israel-Iran conflict and recent U.S. actions in Iran.

🔍 Key Highlights

Inflation Watch:

Core PCE Price Index (May): The Fed’s favorite inflation gauge—expect market volatility if the number surprises.

U.S. Q1 GDP (Final Estimate): Will the latest read confirm or revise economic growth?

Fed Chair Powell:

Testimony (Tue/Wed): Jerome Powell addresses Congress on monetary policy—market-moving potential.

Bank Stress Tests: Fed Results: Lenders’ resilience in crisis scenarios will be in the spotlight.

📅 Earnings Spotlight

🌍 Global Economic Calendar

Monday, June 23

• Germany IFO Business Climate (Jun)

• Forecast: 89.7

• Why it matters: German business morale—higher numbers boost Euro and European stocks.

Tuesday, June 24

• Canada CPI Inflation (YoY, May)

• Forecast: 2.6%

• Why it matters: Bank of Canada’s inflation gauge—lower readings could mean more rate cuts.

Wednesday, June 25

• Australia CPI Inflation (YoY, May)

• Forecast: 3.8%

• Why it matters: Higher inflation could delay RBA rate cuts. US GDP Growth Rate (QoQ, Q1 Final) Forecast: 1.3% Why it matters: Broadest output measure—revisions shift economic outlook.

Thursday, June 26

• US Durable Goods Orders (May)

• Forecast: -0.1%

• Why it matters: Business investment gauge—declines signal caution.

Friday, June 27

• Canada GDP (MoM, Apr)

• Forecast: 0.2%

• Why it matters: Monthly growth—rebound supports Canadian dollar.

🧩 Quick Insights Geopolitics: Israel-Iran tensions and U.S. actions remain a wildcard for risk sentiment. Earnings: FedEx, Micron, and Nike results could drive sector sentiment. Fed: Powell’s testimony is a must-watch for any hint on rate policy.

💡 What to Watch Will inflation data push the Fed to act? How will big earnings move the market? What does the bank stress test reveal about financial health?

Keep your finger on the pulse—markets never sleep! This format keeps your newsletter concise, visually appealing, and actionable, with clear sections, bullet points, and a conversational tone.

Things I’m Paying Attention To

Coinbase’s Push for Tokenised Stocks

Tokenised equities represent a significant advancement in stock trading by allowing investors to buy and trade digital versions of stocks on the blockchain.

This innovation offers 24/7 access, faster settlement times, and potentially lower fees compared to traditional exchanges.

By bridging the gap between cryptocurrency and traditional finance, Coinbase is positioning itself to compete directly with major brokerages such as Robinhood and Charles Schwab, thereby expanding the reach of cryptocurrency into mainstream financial markets.

If the SEC approves this initiative, it would establish a major regulatory precedent for integrating digital assets and securities in the US, potentially influencing future innovation and adoption in the sector.

For Coinbase, tokenised equities present a substantial opportunity to create new revenue streams beyond its core crypto trading business, especially as international competitors like Kraken begin to offer similar services.

However, the introduction of tokenised stocks also underscores existing industry challenges, such as liquidity and the need for consistent global regulatory standards.

Resolving these issues will be crucial for the widespread adoption of tokenised equities and the realisation of their full potential in modernising the financial landscape.

Microsoft’s big push into AI has them eyeing cuts in sales team

This Shift Could Affect Microsoft’s Future

Accelerated AI Transformation: By cutting thousands of sales and support roles and investing $80 billion in AI infrastructure, Microsoft is doubling down on generative AI, automation, and cloud services. This could make Microsoft more competitive in AI-driven markets, but also increases reliance on successful AI deployment.

Workforce Restructuring and Efficiency: The layoffs are designed to reduce middle management and streamline decision-making, aiming for a leaner, more agile organisation. This may boost productivity but risks morale and talent loss, especially among experienced staff.

Cost Discipline and Margin Protection: Shifting resources from traditional roles to AI and data centers helps Microsoft control costs and protect profit margins as AI investments surge. However, it could also create short-term disruption in customer relations and sales execution.

Long-Term Strategic Positioning: If successful, these moves will position Microsoft as a leader in enterprise AI and cloud, but the company must manage the risks of automation backlash, regulatory scrutiny, and potential gaps in human-driven sales and support.

Why Netflix Isn’t Involved in Omnicom’s Live Content Partnerships

Divergent Strategic Priorities: Netflix is focusing on developing its own advertising technology (Netflix Ads Suite) and proprietary formats like interactive midroll ads and binge ad formats, rather than agency partnerships for live commerce.

Their 2025 Upfront emphasised owned-platform innovations, including AI-generated ad integrations and brand lift measurement tools.

Limited Live Commerce Infrastructure: Unlike Amazon (with live sports/TNF and Amazon Live) and Meta (with creator shopping streams), Netflix lacks established live-shopping ecosystems. Its live experiments (e.g., Netflix Cup) are one-off sponsorships, not scalable commerce integrations.

Audience and Monetisation Differences: Netflix targets premium, brand-safe environments for top-tier advertisers (e.g., single-title sponsorships), with CPMs ~40% higher than rivals. This contrasts with Omnicom’s goal of scalable live-shopping measurement across retail and social platforms.

Independent Measurement Approach: Netflix is building first-party solutions (e.g., brand lift analytics) in-house, while Omnicom’s Amazon/Meta collaborations rely on platform-specific clean rooms (Amazon Marketing Cloud) for cross-channel insights.

In essence, Netflix is prioritising owned-ad tech and premium sponsorships over third-party commerce integrations, aligning with its closed-ecosystem model and high-value advertiser focus.

Why Rate Cuts Are Important and How They Affect Markets

Cheaper Borrowing Costs: When central banks cut interest rates, it becomes less expensive for businesses and consumers to borrow. This can boost spending, investment, and corporate profits, which typically lifts stock prices.

Stimulates Economic Growth: Lower rates encourage economic activity, helping to counteract slowdowns or recession risks. This is especially relevant now as growth projections for 2025 are modest and inflation remains a concern.

Market Sentiment and Asset Prices: Rate cuts often drive market optimism, leading to higher stock and bond prices. Investors may move money into riskier assets like equities when yields on safer assets fall.

Currency Impact: Lower rates can weaken the US dollar, making US exports more competitive but also potentially fueling inflation if import prices rise.

In short, rate cuts matter because they make money cheaper, support growth, and directly influence asset prices and investor confidence.

Portfolio Updates (Bought or Sold) – 90 Days

I’ve continued to top up my crypto portfolio, this time adding BTC, ETH, and USDT. In this climate, I see crypto having a big opportunity.

All these coins I’m investing in are around 50% off their all-time high, and as the dip continues, I look to extend my position. I feel things will stabilise, and we’ll see a very strong rally of a lifetime.

Any Target Updates (Companies I’m Watching)

I’m very interested in CrowdStrike and ASML right now. See why below;

CrowdStrike: Latest Updates

June 2025 Security Update: Microsoft’s June 2025 Patch Tuesday, analysed by CrowdStrike, addressed 66 vulnerabilities, including one actively exploited zero-day and nine critical issues. Remote code execution remains the top risk, highlighting ongoing demand for robust endpoint protection.

Analyst Sentiment & Growth: CrowdStrike’s annual recurring revenue (ARR) hit $4.24 billion (up 23% YoY), with guidance for $4.74–$4.80 billion in fiscal 2026 revenue. Analysts remain bullish due to sticky subscription revenue (80% margin) and new federal contracts enabled by FedRAMP authorisation. However, the stock’s high P/E ratio (~515x) has led to some profit-taking and volatility.

Recognition & Innovation: CrowdStrike was named a 2025 Gartner Customers’ Choice for User Authentication, driven by its AI-powered Falcon platform, which now includes advanced identity protection and privileged access management.

Recent Outages: The company is still recovering from reputational damage after a major July 2024 outage that caused global IT disruptions and financial losses, though it remains a leader in cybersecurity.

ASML: Key Updates

Recent Financial Performance

Q1 2025 net sales: €7.7 billion, net income: €2.4 billion, gross margin: 54%—all in line or above guidance.

Full-year 2025 sales outlook: €30–35 billion, with Q2 guidance of €7.2–€7.7 billion in net sales and gross margin of 50–53%.

Order backlog remains robust at €34 billion, reflecting strong future demand, especially for advanced EUV systems.

Strategic and Shareholder Moves

2024 total dividend: €6.40 per share, up 4.9% year-on-year.

New share buyback program authorised for up to 10% of issued capital, running until October 2026.

Share issuance flexibility approved for up to 10% of capital, supporting growth and strategic initiatives.

Market and Operational Outlook

AI-driven demand and High NA EUV technology are key growth drivers.

Revenue growth in Logic segment expected for 2025; Memory segment to remain strong.

China sales normalising to about 20% of total revenue; some EUV shipments delayed into 2026 due to customer timing.

Tariff uncertainties and slower recovery in traditional markets (smartphones, PCs) could impact margins and growth.

Only downsides are both companies are overvalued

I have ASML down as around €600 and I have CrowdStrike around $440 hopefully in this dip cycle they May come close to these prices.

Hot Take 🔥

US Strikes on Iran Escalate Middle East Conflict

The US has directly entered the Israel-Iran conflict, conducting airstrikes on Iranian nuclear facilities. This marks a major escalation and has heightened geopolitical risk across global markets.

How the Iran War and US Involvement Could Affect Markets

Immediate Stock Market Downturn: A “knee-jerk” selloff is likely if the US deepens its involvement, as investors fear a wider war and supply shocks.

Oil Price Spike: Major supply disruptions could push oil to $85–$100 per barrel in a worst-case scenario, fueling inflation and pressuring central banks to delay rate cuts.

Safe-Haven Rally: The dollar and gold are expected to strengthen as investors seek safety, while yields may fall.

Long-Term Uncertainty: If the conflict remains contained and energy flows are not disrupted, markets may stabilise. However, any threat to the Strait of Hormuz would have severe global economic consequences.

How Escalating Iran Conflict and US Involvement Could Affect Cryptocurrencies

Flight to Safety and Volatility: Heightened geopolitical tensions, especially with US involvement in Iran, typically drive investors toward safe-haven assets like gold and the US dollar. Cryptocurrencies—especially Bitcoin—sometimes benefit as a perceived alternative safe haven, but they can also see sharp volatility as risk appetite shifts.

Stablecoins in the Spotlight: The GENIUS Act, which just passed the Senate, brings new regulatory clarity and legitimacy to stablecoins, requiring full reserve backing and monthly audits. In a crisis, demand for regulated, dollar-backed stablecoins (like USDC and USDT) could rise as traders seek stability and efficient dollar exposure.

Altcoins Face Uncertainty: Non-stablecoin cryptocurrencies (altcoins) may experience increased volatility and outflows as investors rotate into perceived safer assets or regulated stablecoins, especially if market sentiment turns risk-off due to war escalation.

Regulatory Boost for US-Backed Stablecoins: The GENIUS Act could accelerate adoption of US-regulated stablecoins by institutional and retail users, especially if global instability makes dollar exposure more attractive. This could marginalise unregulated or offshore stablecoins.

A deepening Iran conflict with US involvement is likely to increase crypto market volatility, boost demand for regulated stablecoins, and put pressure on riskier altcoins, while the new US regulatory framework could further entrench dollar-backed stablecoins as a core part of the crypto ecosystem.

The escalation between the US, Iran, and Israel is the dominant market driver this week, with oil, inflation, and safe-haven assets at the centre of investor attention, and central bank meetings adding another layer of uncertainty.

ICYMI

Notable News & Developments

UK Parliament Highlights - Link

• MPs debated amendments to the Crime and Policing Bill regarding abortion decriminalisation.

• Education Ministers addressed antisemitism on campuses, school funding, apprenticeships, and more.

• Ministerial statements covered the Israeli strike on Iran’s nuclear facilities and the Air India plane crash in Ahmedabad, which killed dozens of British citizens.

• The government announced a statutory inquiry into grooming gangs following a report by Baroness Casey.

Tech News - Link

• We saw major AI controversies, with debates over the environmental impact of AI and tech giants facing regulatory scrutiny.

• Concerns about AI’s carbon footprint and calls for more transparency and sustainability in tech development.

US News - Link

• Senate Republicans push for deeper Medicaid cuts and stricter work requirements, sparking warnings of millions losing health insurance.

• The EPA halted enforcement actions against polluting industries in several states, amid controversy over deregulation.

Global News - Link

• Protests, legal battles, and military deployments in Los Angeles, as well as ongoing riots and police injuries in Ballymena, Northern Ireland.

• Significant legal and security developments in Somalia, Kenya, and the Czech Republic.

Internet Culture - Link

• The Kate Middleton disappearance and cancer announcement continues to spark internet speculation and discussions about monocultural events in the digital age.

Oddities & Other Stories - Link

• Aflac reports a cyber incident potentially affecting Social Security numbers.

• Iran’s internet blackout during the Israel-Iran conflict leaves citizens in the dark.

• California considers examining its Amazon oil imports after pleas from Indigenous leaders.

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