Week Ahead 15 June on Markets
US stocks tumbled on Friday as Israel-Iran conflict intensified. Dow Jones dropped 1.79% while the S&P 500 slid 1.13% and the Nasdaq declined 1.3%.
Nvidia dipped 2.1% and Apple lost 1.4%. The more than 7% rise in crude oil prices lifted Halliburton by 5.5%, ConocoPhillips 2.4% and Exxon 2.2%.
Defense stocks climbed, with Lockheed Martin, RYX Corporation and Northrop Grumman all gaining over 3%.
Airline stocks fell on fears that fuel costs could climb. Delta Air Lines lost 3.8%, United Airlines fell 4.4% and American Airlines declined 4.9%.
Visa and Mastercard both fell more than 4% after the Wall Street Journal reported that major retailers are exploring cryptocurrencies that could eliminate the need for payment intermediaries. PayPal dropped around 5%, while American Express lost 3.4%.
Equity markets, riding the AI-fueled tech rally that has kept them popped up in a post-tariff environment, took the opportunity to de-risk and take a little off the top. Investors pulled back following Israel’s unexpected wave of strikes on Iran. Consumer sentiment data rebounded more than expected, helping to ease Friday’s downside momentum.
The University of Michigan (UoM) Consumer Sentiment Index for June rose firmly over the last month, clocking in at 60.5 and handily outrunning the median market forecast of 53.5. UoM 1-year Consumer Inflation Expectations also eased, falling to 5.1% from 6.6%, while 5-year Consumer Inflation Expectations ticked down to 4.1% from 4.2%.
The Federal Reserve’s latest rate call is coming up next week. The Fed is broadly expected to remain in wait-and-see mode as the central bank awaits potential fallout from the Trump administration’s whiplash approach to trade policy. Following this week’s better-than-expected inflation prints, rate markets are pricing in around 70% odds of a quarter-point cut in September, with an immediate follow-up rate trim expected in October, but more likely to come in December.
Trump approves Nippon Steel’s US$14.9bil purchase of US Steel
Reuters, June 14, 2025
WASHINGTON: U.S President Donald Trump approved Nippon Steel’s US$14.9 billion bid for US Steel on Friday, capping a tumultuous 18-month effort by the companies that survived union opposition and two national security reviews.
Trump signed an executive order saying the tie-up could move forward if the companies sign an agreement with the treasury department resolving national security concerns posed by the deal. The companies then announced they had signed the agreement, fulfilling the conditions of Trump’s directive and effectively garnering approval for the merger.
“We look forward to putting our commitments into action to make American steelmaking and manufacturing great again,” the companies said in the statement, thanking Trump.
They added the agreement includes US$11 billion in new investments to be made by 2028 as well as governance, production and trade commitments. Nippon Steel will buy a 100% stake in US Steel, a spokesperson for the Japanese company in Tokyo said on Saturday.
The steelmakers provided no detail on the “golden share” they pledged to issue to the US government, raising questions about the extent of US control. US senator David McCormick of Pennsylvania, where US Steel is headquartered, said last month the golden share would give the government veto power over key decisions relating to the American steel icon.
Reuters has reported that Nippon Steel would invest an additional US$3 billion for a new mill after 2028.
The takeover will set up the ailing US firm to receive the critical investment, allowing Nippon Steel to capitalise on a host of American infrastructure projects while its foreign competitors face steel tariffs of 50%. The Japanese firm also avoids the US$565 million in breakup fees it would have had to pay if the companies had failed to secure approvals.
For Nippon Steel, the world’s fourth-biggest steelmaker, securing a foothold in the US is key to its global growth strategy. The US steel market, including high-grade steel, Nippon Steel’s specialty, is growing amid rising global trade tensions.
‘Great partner’
Still, some Nippon Steel investors are concerned about short-term financial pressure due to the scale of the additional investment commitment.
The Japanese government, rushing to try to secure a trade deal with the US by the time Trump and Prime Minister Shigeru Ishiba meet at the Group of Seven summit starting on Sunday, applauded the Nippon-US Steel agreement.
“The government of Japan welcomes the US government’s decision, as we believe this investment will enhance innovation capabilities in the US and Japanese steel industries and further strengthen the close partnership between our two countries,” Economy, trade and industry minister Yoji Muto said in a statement on Saturday.
Friday’s announcement was hardly guaranteed, even if many investors had seen approval as likely after Trump headlined a rally on May 30 giving his vague blessing to an “investment” by Nippon Steel, which he described as a “great partner.”
Shares of US Steel had dipped earlier on Friday after a Nippon Steel executive told Japan’s Nikkei newspaper that the takeover required “a degree of management freedom” to go ahead after Trump said the US would be in control with the golden share.
The bid has faced opposition since Nippon Steel launched it in December 2023.
After the United Steelworkers union came out against the deal last year, both then-president Joe Biden, a Democrat, and Trump, a Republican, expressed their opposition as they sought to woo voters in the presidential campaign in the swing state of Pennsylvania.
Shortly before leaving office in January, Biden blocked the deal on national security grounds, prompting lawsuits by the companies, which argued the national security review they received was biased. The Biden White House disputed the charge.
The steel companies saw a new opportunity in the Trump administration, which opened a fresh 45-day national security review into the proposed merger in April.
But Trump’s public comments, ranging from welcoming a simple “investment” in US Steel by the Japanese firm to floating a minority stake for Nippon Steel, spurred confusion.
My take: The approval by Trump of this US Steel acquisition by Nippon Steel signals that the upcoming trade negotiations between Japan Prime Minister Ishida and Donald Trump on Sunday would achieve some form of agreements. That would help investment sentiment which has been dented by the escalating tensions at the Middle East.
Netanyahu vows to escalate strikes, Israeli media reports fighter jets taken off for Tehran
Euronews, June 15, 2025
Israeli Prime Minister Benjamin Netanyahu said on Saturday that Israeli air forces had dealt "serious damage" to Iranian nuclear facilities and claimed that Iranian leaders are “packing their bags” in the face of the ongoing military campaign.
In a televised address, Netanyahu threatened to escalate the attacks further, delivering a direct warning to Tehran.
"In the very near future you will see Israeli Air Force jets over the skies of Tehran, we will strike every site and every target of the Ayatollah's regime, and what they have felt until now is nothing compared to what they will feel under the sway of our forces in the coming days," he stated.
"I talk to (world) leaders every day. And they express, I would say, tremendous admiration for both the resolve and determination of the state of Israel and the great achievements of our fighters, and there is reason to be truly proud of them and you should be proud of yourselves as well. We are in a fateful battle for our existence. We will fight until we achieve victory," Netanyahu concluded.
Israeli fighter jets have taken off for Tehran
Right after this speech, Israeli media reported that squadrons of Israeli fighter jets had taken off from their bases en route to Iran.
The defiant speech comes amid conflicting reports about the extent of the damage. Israeli military officials said that strikes on nuclear sites in Natanz and Isfahan were able to damage them “significantly.” However, Iran stated that the impact is limited, while still acknowledging the deaths of nine experts in the attacks.
Netanyahu justified the operation by claiming that if Israel hadn't acted, Tehran was planning to give nuclear weapons to its "terrorist proxies." Adding that the operation has “clear support” from US President Donald Trump, Netanyahu pledged to continue the attacks.
The escalating conflict has directly derailed planned nuclear talks between the United States and Iran. The crucial negotiations, which were set to begin in Oman on Sunday, have been cancelled, with Iranian officials calling the dialogue "meaningless" in light of the Israeli strikes.
UK moves warplanes to Middle East amid Iran crisis
AFP, June 15, 2025
LONDON: Britain is deploying fighter jets and other “assets” to the Middle East amid an escalating conflict between Iran and Israel, UK Prime Minister Keir Starmer said yesterday.
“We are moving assets to the region, including jets, and that is for contingency support,” Starmer told reporters travelling with him on his plane to Canada for G7 talks.
The UK leader said he had spoken with both US President Donald Trump and Israeli Prime Minister Benjamin Netanyahu since Israel launched attacks on Iranian military and nuclear sites early Friday.
According to officials, dozens of people have been killed, including top army and Revolutionary Guards commanders as well as civilians.
Iran has responded with barrages of drones and missiles fired at Israel overnight Friday into yesterday.
Starmer said the situation was “fast-moving” and “intense”.
“We’re having ongoing discussions with our allies all of the time, both myself and (foreign minister) David Lammy… who also spoke to the Iranians,” he said.
“Our constant message is de-escalate, and therefore everything we’re doing, all discussions we’re having are to do with de-escalation.”
The UK leader said his talk on Friday with Netanyahu had been “good and constructive” and had “included discussions about the safety and security of Israel”.
Foreign secretary Lammy said earlier yesterday that he was “alarmed” by further strikes overnight.
“We must urgently de-escalate & prevent any further harm to civilians,” Lammy said in a post on social media, adding that he had spoken to his Iranian counterpart Abbas Araghchi “to urge calm”.
Trump to command Israel-Iran crisis from Situation Room as hawkish allies declare 'game on'
Daily Mail, June 13, 2025
President Donald Trump moved quickly to respond to Israel's series of military strikes against Iran as he tries to avoid World War III.
He spoke with several top American news anchors the morning after the strikes, describing the attack as a success.
'I think it's been excellent,' he told ABC News anchor Jon Karl. 'We gave them a chance and they didn't take it. They got hit hard, very hard. They got hit about as hard as you're going to get hit. And there's more to come. a lot more.'
The president's next major action will take place in a meeting with his National Security Council at 11:00 a.m. EST, a high-stakes meeting where he'll be presented with options to respond to the prospect for a wider, protracted war in the Middle East.
The president monitored the ongoing attacks overnight from the White House and posted on Friday morning that Iran still had the chance to 'make a deal.'
Secretary of State Marco Rubio is the president's point person in the ongoing conflict, as the White House national security advisor.
Rubio announced Thursday night that Israel's action against Iran was 'unilateral' and that the United States was not involved.
'Our top priority is protecting American forces in the region,' Rubio announced in a statement.
Sill, in a potentially harrowing statement, the Iranian Foreign Ministry noted that the United States would be held responsible for Israel's attacks.
'The Zionist regime's aggressive actions against Iran cannot have been carried out without the coordination and authorization of the United States,' they noted.
Trump told Fox News host Bret Baier Thursday evening he was aware of the pending Israeli strikes before they took place, but did not intervene to stop them.
'Iran cannot have a nuclear bomb. We'll hopefully get back to the negotiating table,' Trump said. 'There are several people in leadership in Iran who will not be coming back.'
Trump also spoke with CNN host Dana Bash about the strikes and vowed to stand with Israel.
'We of course support Israel, obviously and supported it like nobody has ever supported it,' Trump said, according to Bash.
'Iran should have listened to me when I said - you know I gave them, I don't know if you know but I gave them a 60-day warning and today is day 61,' he added.
Rubio warned Iran not to attack any American forces in the region.
'Let me be clear: Iran should not target U.S. interests or personnel,' he wrote.
The president's decision to allow Israel to strike Iran drew cheers from more hawkish Republicans, who have been urging him to take more aggressive approach in the Middle East.
'Game on,' wrote Sen. Lindsey Graham on social media. 'Pray for Israel.'
'Donald Trump doesn't mess around. Bombs away,' cheered Rep. Randy Fine of Florida on social media after the attacks.
Trump's first Secretary of State and former CIA director Mike Pompeo appeared on Fox News on Friday morning, greeting hosts by noting it was 'a very good morning'
'There was literally zero evidence that the negotiations were going to lead to a good outcome,' he said about Trump's peace talks.
'I think the Israeli leadership finally decided not only did they have the moment to do this, but they had the tools and resources to effectively obliterate much of the Iranian regime's military programs.'
Pompeo cheered on the strikes as a demonstration of 'Western resolve' to prevent Iran from obtaining a nuclear weapon.
'This was the go time,' Pompeo said about the attacks. 'I hope they stay in this. They need to continue this until they complete the effort to diminish Iran's nuclear program in a way that we get a decade or two of respite. I don't think the ayatollah going to change his ways.'
Trump shared his thoughts on the strike on social media, reminding Americans he gave Iran a 'chance' to make a deal.
'I told them, in the strongest of words, to 'just do it,' but no matter how hard they tried, no matter how close they got, they just couldn't get it done,' he said, noting that he warned them of Israel's potential attacks.
Trump blamed Iranian hardliners for failing to move on negotiations.
'Certain Iranian hardliner's spoke bravely, but they didn't know what was about to happen. They are all DEAD now, and it will only get worse!' he wrote.
The president signaled his openness to ongoing peace talks, warning of Israel's 'more brutal' efforts to conduct more military strikes.
'Iran must make a deal, before there is nothing left, and save what was once known as the Iranian Empire,' he wrote. 'No more death, no more destruction, JUST DO IT, BEFORE IT IS TOO LATE. God Bless You All!'
Trump's special Middle East envoy Steve Witkoff was scheduled to attend peace talks in Oman on Sunday and still intends to keep his end of the deal, according to Axios.
Iran announced on state television it will not participate in any future nuclear peace talks.
Israel's strikes targeted the Natanz nuclear site in Iran as well as key Iranian military officials.
Mohammad Bagheri, the commander in chief of the military was killed as well as Gen. Hossein Salami, Gen. Gholamali Rashid, Gen. Amir Ali Hajizadeh:
Iranian state media also announced that two scientists who were leading Iran's nuclear developments were also killed, Fereydoun Abbasi, the former head of the Atomic Energy Organization of Iran and Mohammad Mehdi Tehranji, the president of the Islamic Azad University in Tehran.
My take: My read is that President Trump has done whatever he could to prevent this conflict from escalating, but Israel decided that it had to strike Iran in what it believed was the last chance to stop Iran from having nuclear weapons.
Iran, on the other hand, has lost trust in the US, after Donald Trump in his first term as US president walked back on the previous nuclear accord that the US signed with Iran in 2011 under the Obama administration (with agreements from China, Russia, the UK, France and Germany at that time). Hence, Iran did not agree to the US suggestions to halt its nuclear programmes in the latest negotiations in past few weeks.
Iran believes that it should have nuclear weapons which will deter any Israel aggression in the Middle East and will get some form of “respect” from the US in the way that the US will refrain itself from any direct conflicts with Iran, like the way the US treats any other country with nuclear arms such as Russia, China and North Korea.
I do not expect Iran to participate in the scheduled peace talk with the US in Oman this Sunday. Rather, I would expect Iran to plan more strikes on Isreal in coming weeks, just like the way Iran has retaliated against Israel after Israel killed the Hamas leader in Tehran last year.
Without nuclear weapon and any direct support from China or Russia, there is only so much that Iran can do against Israel, like what has happened in last decades. It is frustrating for Iran, as for other Muslim countries like Saudi Arabia or Malaysia. We can only condemn the Isreal attacks and call for the conflicts not to escalate into a regional war. The latter is unlikely now as Iran allies in the region have been weakened in past 2 years, with Hamas almost getting eliminated in Gaza and Houthis militia in Yemen (and its major port) attacked by Israel and Amercian forces weeks ago. Iran’s allies in Syria (previous pro-Iran regime has been overthrown) and southern Lebanon (several Hezbollah leaders killed) have also been forced to move north by Israel forces in past one year.
The best outcome from this latest conflict would be for Iran to strike Isreal with drones and some long-range missiles which would be mostly blocked by Israel’s air defense system, then Iran would claim some form of victory in its retaliation and stop. Iran would then quickly rebuild its nuclear development programmes but it would take another decade or two before Iran would get back to its success level before the latest strike by Israel. The cycle would repeat in another 20-30 years, but the two countries would co-exist for another century or so.
That sounds like my wishful thinking, but I think that is the US / Israel’s plan as well. I may be reading this wrong, and things may get completely out of hands at certain stages, things that even US President could not have a good control of. So fellow investors would better do own assessment on the geopolitical risks and the impacts on own investments.
UN conference on Palestinian statehood postponed following Israeli strikes on Iran
Euronews, June 14, 2025
French President Emmanuel Macron announced on Friday that a top-level UN conference on a two-state solution for Israel and Palestine has been postponed amid surging tensions between Israel and Iran.
France and Saudi Arabia were due to co-chair the conference hosted by the UN General Assembly in New York on June 17-20, and Macron had been among leaders scheduled to attend.
Macron told reporters that the two-state conference was postponed for logistical and security reasons, and because some Palestinian representatives couldn’t come to the event. He insisted that it would be held “as soon as possible” and that he was in discussion with Saudi Crown Prince Mohammed bin Salman about a new date.
He insisted that “this delay does not call into question our determination to move forward with the implementation of the two-state solution, whatever the circumstances."
One of the aims at the UN conference was to increase the number of countries recognising Palestinian territories as an independent state.
Israeli Prime Minister Benjamin Netanyahu has rejected the creation of a Palestinian state, and Israel refused to participate in the conference.
On Wednesday, Reuters reported that US President Trump's administration had sent a cable discouraging governments around the world from attending the conference.
It reportedly warned countries that any "anti-Israel actions" taken after the conference could be followed by diplomatic consequences from Washington.
Macron stressed that “the aim is a demilitarised Palestinian state recognising the existence and the security of Israel,” Macron said. Any such state would exclude any Hamas leaders, he said.
France and Germany up domestic security following Israel-Iran tensions
After Israel’s strikes on Iran on Friday, Macron said that France’s military forces around the Middle East are ready to help protect partners in the region, including Israel, but wouldn’t take part in any attacks on Iran.
He said "the risk of this march towards nuclear weapons by Iran threatens the region, Europe and, more generally, collective political stability."
French schools, places of worship, public buildings, public festivals and gatherings and places of interest for the French Israeli, American and Jewish communities are all the focus of a call for greater security given out by France's interior minister Bruno Retailleau today.
In a letter seen by Euronews addressed to the minister of defence, the heads of the army, police and other security chiefs, Retailleau said that deteriorating situation in the Middle East following Israel's strikes on Iran necessitated implementation of immediate action to increase security within France.
In addition to calling on a beefed up police presence and extra vigilance, the note also called for efforts to track individuals, "particularly Iranians or those with links to Iran", already of interest to French authorities in the context of anti-radicalisation.
After convening with his security cabinet, German Chancellor Friedrich Merz said Germany will also increase protection of Israeli assets and Jewish sites.
While Merz emphasised Israel’s “right to protect its existence and the security of its citizens," he also called on both sides to refrain from further escalation.
My take: I do not expect Europe (France or Germany) to have much say with things happening the Middle East, nor they can do much to influence any outcome. The US has used its veto power once again last week at the UN Security Council meeting to block a resolution to demand an immediate ceasefire from Israel in Gaza and to allow aids into the Gaza strip. Similarly, any effort (by France or any other country) to push for a two-state solution for Israel and Palestine will come to no avail if Israel / the US does not agree.
Dollar and other safe havens rise as Israel strikes Iran
Reuters, June 13, 2025
NEW YORK: The US dollar rallied alongside the safe-haven Japanese yen and Swiss franc, with currency markets abruptly reversing direction on news Israel had launched strikes on Iran.
Israel has begun carrying out strikes on Iran, two US officials told Reuters, adding that there was no US assistance or involvement in the operation. Another report suggested that explosions were heard northeast of Iran’s capital Tehran.
An index that measures the dollar against six other currencies gained 0.4%, and was last at 98.07, in early Asia trading.
Against the yen, the dollar slipped 0.35% to 143 per dollar, while the Swiss franc tumbled 0.39% to 0.807 per dollar.
Risk-sensitive Asian currencies such as the Aussie dollar and the New Zealand dollar weakened 0.9% each.
Earlier in the week, the dollar index hit multi-year lows as investors were not impressed by a US-China trade truce, while cooler-than-expected inflation data fuelled expectations of more aggressive interest rate cuts by the Federal Reserve.
The dollar is on track for weekly declines against the yen, the Swiss franc and the euro.
Crude prices LCOc1 jumped more than US$4 on the news as investors priced in potential supply disruptions from the oil-rich region, while gold prices climbed 0.8% to their strongest since early May.
What to do next for Bursa stocks?
With the Israel - Iran conflict escalating fast, nobody knows what will happen next, even the US will struggle to control the situation on the ground as Israel Prime Minister Netanyahu is out of control now and Iran has lost trust in the US.
The immediate impacts to the world are skyrocketing crude oil prices and potential disruption to air travels in the Middle East. The escalating conflicts are also forcing global funds to flow into traditional safe havens like US dollars, Treasuries, Japanese yen and Swiss francs.
There is conspiracy theory saying that the US is allowing Israel to ratchet up attacks onto Iran, partly to attract more global funds to flow into US Treasuries & assets and partly to divert attention away from its failing tariff war.
The US on surface has reached certain framework agreement with China on the supply of rare earth minerals, but details are scarce on what exactly they have agreed upon. More people believe that China has not loosened much its export control of rare earth minerals, with only a small fraction of rare earth minerals allowed for export to the US mainly for the automobile sector. They are strictly not for any military use or for any advanced semiconductor use, so the US is still very much constraint on its production of any advanced weapons including the all-important F35 fighter jets. China will never allow exports of rare earth minerals to the US for its weapon industry to make advanced weapons to fight against China later.
That is why the US has not relaxed the export of advanced AI chips and chip design software to China, nor lowered the 30% tariffs on Chinese imports to the US. Except for the UK, the US has in fact not reached any major trade agreement with any trade partner. So the Trump administration needs to play down the tariff war progress or non-achievement, by creating other headline news. Some say the chaos in Los Angelas is also intentionally created by the Republicans, one to divert the attention away from tariff war and two to blame on the Democrat State Governor of California for his inability to control the illegal immigrants. California state governor Gavin Newsom is the frontrunner for the next Democrats’ choice for Presidency candidate.
With that thinking in mind, it seems that the US will not allow the Israel - Iran conflicts to escalate into a full-blown regional war. It is now up to how the US can control the actions of Netanyahu, or for that matter how the US can bring him down in Israel political struggles if he refuses to follow US instructions. On Iran, the US will just need to monitor and make sure that Iran cannot get any more advanced weapon from Russia or China. Trump for that matter has already had direct communications to Putin and Xi Jinping.
As such, we just need to deal with the occasional strikes from Israel or Iran in coming days or weeks that will affect investment sentiment, and the immediate impacts from the skyrocketing crude oil prices and strengthening US dollar, and a potential high inflation in the US leading to less interest rate cuts by US Fed. Again, I must caution that this is my wishful thinking, and we must monitor the situation in the Middle East in order to protect our investments and to identify the best time to bottom fish.
I have written my expectations on the few stocks I cover from the impacts of the Israel - Iran conflict, in my flash post on Friday. As it turns out, the stock performance on Friday itself did reflect such expectations:
YTL / YTL Power - small positive biased as high crude oil prices will push generation higher at Jordan Power, and stronger US dollars will increase earnings from overseas subsidiaries in ringgit term
AEON - slight negative bias as a stronger Japanese yen will make its imported goods from Japan more expensive in ringgit term
Eco-Shop / Padini - largely neutral as about 1/3 to 50% of their products are imported from China and the ringgit - renminbi forex remains stable
IOIPG - slight negative bias as the chance for US Fed to cut interest rates will become lower, affecting SIBOR to stay high
VTC - largely neutral
Hong Kong stocks like Alibaba, Ping An and JD.com - slightly negative bias as escalating geopolitical conflicts always attract global funds to flow into safe havens like US Treasuries and Japanese yen
Net short positions on YTL Power increased slightly to 22.6m shares, while net short positions on YTL and IOIPG decreased slightly to 23.6m and 15.5m shares respectively at close Friday.