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AU Financial Review
6 days ago
- Business
- AU Financial Review
Oil traders brace for turmoil as Iran crisis imperils supply
Israeli strikes on Iranian energy infrastructure are spooking markets as investors become increasingly concerned that a longer-term oil price spike will fuel inflation and derail hopes of interest rate cuts. Israel attacked South Pars, the world's largest gas field, at the weekend, causing production to be partially suspended. In later attacks, Israel struck Tehran's main gas depot and one of the country's largest oil refineries in separate parts of the capital. Iran is the third-biggest producer in the Organisation of the Petroleum Exporting Countries. The targeting of energy assets represents a new front in the conflict, which erupted on Friday when Israel launched a wave of missiles at the Islamic Republic's nuclear program. Oil prices in the United States surged as much as 14 per cent, before settling 7.5 per cent higher at $US73 a barrel. But traders are bracing for more wild swings when oil market trading resumes on Monday, particularly after Iranian military officials said Tehran was considering closing the Strait of Hormuz – a key shipping route that connects the Persian Gulf and the Gulf of Oman. Crude oil futures posted their biggest single-day increase in more than three years on Friday. 'A significant disruption to these flows would be enough to push prices to $US120 a barrel,' warned ING's head of commodity strategy Warren Patterson. 'Higher oil prices clearly reduce the chances of the Federal Reserve cutting rates in the third quarter.' The escalation in the Middle East took place in the same week that US inflation data for May came in lower than expected, and as officials in Washington and Beijing appeared to be closing on a deal to avert the worst of the trade tariffs threatened earlier this year. The positive sentiment pushed the ASX to a fresh record last week, while US equities traded just 1.6 per cent shy of its all-time high. But Israel's strike on Iran triggered an abrupt reversal on Friday, dragging the S&P 500 down 1.1 per cent as investors fled to the safety of gold, which lifted prices of the precious metal back near all-time highs. Wall Street's 'fear gauge' – the VIX Index – topped 20, a level that indicates a divide of calm and nervousness in financial markets. The local sharemarket is expected to follow Wall Street lower, with futures indicating the S&P/ASX 200 will drop 0.2 per cent, or 20 points, to 8532 at the open on Monday.
Yahoo
13-06-2025
- Business
- Yahoo
Drone Maker Airo Jumps 140% in Latest Post-IPO Debut Pop
(Bloomberg) -- Airo Group Holdings Inc. shares climbed 140% in their public trading debut on Friday after the company raised $60 million in an initial public offering, becoming the third company this month to more than double during its opening session. Shuttered NY College Has Alumni Fighting Over Its Future Trump's Military Parade Has Washington Bracing for Tanks and Weaponry NYC Renters Brace for Price Hikes After Broker-Fee Ban Do World's Fairs Still Matter? As Part of a $45 Billion Push, ICE Prepares for a Vast Expansion of Detention Space The stock pared earlier gains of as much as 291%, triggering volatility halts several times, to finish the day at $24 each on Friday in New York. The aerospace and defense tech firm on Thursday upsized its IPO to 6 million shares and priced the deal at $10 per share, below the marketed range of $14 to $16 apiece. The frenetic start gives the company, which makes the bulk of its revenue from its drone-making segment, a market value of $622 million based on the outstanding shares in its filing. Chirinjeev Kathuria, Airo's executive chairman, co-founder and largest shareholder, had indicated interest in buying as much as $5 million worth at the offering price, the filing showed. Airo's initial plan to go public in April had been frustrated by a spike in volatility, measured by the VIX Index, Wall Street's so-called fear gauge. The more recent fall in the VIX back closer to 20, plus the strong performance of recent IPOs such as Circle Internet Group Inc. and Voyager Technologies Inc and publicly-traded competitors to Airo such as AeroVironment Inc., had encouraged the company to revive the offering, Kathuria said in an interview with Bloomberg News. Having already met with investors in April, the offering was already well oversubscribed late Wednesday when Airo decided to reprise its plans to go public, enabling the deal to proceed after only a one-day roadshow and despite Thursday night's attack by Israel on Iran unsettling markets. 'With Iran and Israel, we always hope for a peaceful result but that also feeds into the demand because there is a lot more appetite for aerospace and defense investments,' Kathuria said. The debut surge, which pushed Airo's market capitalization to about $1 billion at the highs, also came just two days after shares of space and defense firm Voyager Technologies Inc. ended their debut session up 82% after more than doubling at one point during early trading. Circle's 168% first-day gain on June 5 following its IPO also demonstrated investors' rekindled enthusiasm for first-time share sales. Conflicts in Ukraine and the Middle East have highlighted the cost-effectiveness of drone technology in warfare. 'Modern warfare has completely changed because of drone technology,' Kathuria said. Airo's IPO also came just days after President Donald Trump signed executive orders aimed at accelerating domestic drone production to reduce the US's reliance on commercial drones imported from China. The company plans to begin making military drones in the US and get certified to sell these drones to the US Department of Defense in about six months, Kathuria said. Airo's existing drones already operate in European Union and NATO countries, and have been tested and deployed in the conflict in Ukraine, the filing shows. The drones have been used for reconnaissance and targeting by European North Atlantic Treaty Organization members, and have proved difficult to shoot because of their AI-enabled capabilities, Kathuria said. 'Today they don't have ammunition, but we are equipped and willing to do that if NATO countries and the US ask us,' he said. The company had raised only a small amount of money in the IPO to limit dilution to existing shareholders, Kathuria said. 'By going public we are able to access $200 million of financing from the Canadian government and other financing in the debt market,' Kathuria said. 'There's a lot of credibility in going public when you are bidding for NATO and US DoD contracts.' Cantor Fitzgerald & Co., BTIG and Mizuho Securities USA worked on the offering, the filing shows. Shares are trading on the Nasdaq Global Market under the symbol AIRO. (Updates with shares in first three paragraphs.) American Mid: Hampton Inn's Good-Enough Formula for World Domination The Spying Scandal Rocking the World of HR Software New Grads Join Worst Entry-Level Job Market in Years As Companies Abandon Climate Pledges, Is There a Silver Lining? US Tariffs Threaten to Derail Vietnam's Historic Industrial Boom ©2025 Bloomberg L.P. Sign in to access your portfolio
CNBC
11-06-2025
- Business
- CNBC
Wells Fargo says tariffs to hold back stocks this year, but then sees new highs in 2026
This year could be a washout for the stock market thanks to lofty tariffs, but 2026 could mark a return to new highs, according to the Wells Fargo Investment Institute. President Donald Trump's tariffs will continue to limit upside for equities this year, as corporate earnings come under pressure from higher inflation, constrained profit margins and a slower economy, but investors can start positioning for a recovery that's likely to come next year, wrote Darrell Cronk, president of the investment institute. "Significantly surpassing the equity-market highs reached early this year has likely been delayed by the tariff-related hit to consumer and business sentiment along with the imminent economic slowdown that we expect," Cronk wrote. "Without a recession, we believe the risk of further equity-market downside — beyond lows reached in April — is likely limited while upside reward potential is significant by year-end 2026," he added. .VIX YTD mountain Volatility Index (VIX), year to date. The reasoning behind the Wells Fargo thesis is this: Positive forces expected later this year, such as tax cuts and lower interest rates, in addition to lower oil prices, should offset some of the pressure from higher tariffs, helping the U.S. avoid a recession. What's more, Cronk noted that volatility historically occurs near market bottoms. In 10 comparable periods in the past, he said, when the VIX Index topped 40, the median 18-month forward return for the S & P 500 was 30%. The VIX topped 50 at one point during the April selloff and was last trading above 16. "In real time, the uncertainties can feel so large that it is difficult to look past them, but also in each case households and businesses adjusted, and generally, returns soon followed," he wrote. "In sum, the new tariffs are significant, and uncertainty may persist for some months to come," he continued. "However, we would follow the lesson of history and lean into equities." While near-term returns may remain muted, investors should "lean into the recovery" by allocating toward quality companies, Cronk said. He prefers U.S. large caps and U.S. midcaps, anticipating the U.S. will maintain its status as the global leader both economically and, by extension, in stocks. He also said he favors developed markets excluding the U.S. over emerging markets. "We view further periods of volatility as an opportunity to lean into equities to position for the gains we expect through 2026," Cronk said.
Bloomberg
02-06-2025
- Business
- Bloomberg
Hedge Fund Picton Buys Volatility, Fearing a New Tariff Tantrum
The head of Canada's Picton Mahoney Asset Management said the global market volatility that has faded in recent weeks is likely to return, and his firm is betting on it. Equity markets have rallied sharply since US President Donald Trump paused many of the tariffs he had announced in his 'Liberation Day' speech. The S&P 500 has surged 19% since the April 8 close and just notched up its best May since 1990. The VIX Index, a volatility gauge, has tumbled. It closed Friday at 18.57, compared with its lifetime average around 19.5.
Yahoo
21-05-2025
- Business
- Yahoo
Hinge Health, MNTN IPOs Test Strength of US Listing Rebound
(Bloomberg) — The digital-health and advertising-technology sectors share a rich history of IPO disappointment, making this week's planned debuts of physical therapy platform Hinge Health Inc. and TV ad software firm MNTN Inc. a test of whether the nascent recovery in the US first-time share sale market can keep going. Can Frank Gehry's 'Grand LA' Make Downtown Feel Like a Neighborhood? Chicago's O'Hare Airport Seeks Up to $4.3 Billion of Muni Debt NJ Transit Makes Deal With Engineers, Ending Three-Day Strike Former initial public offering darlings such as SmileDirectClub, which shut down in 2023 after shares collapsed, and Teladoc Health Inc., whose stock is trading nearly two thirds below its listing price, offer cautionary tales. These wipeouts show the difficulty of technology startups aiming to make health-care cheaper and more efficient winning over investors. In the adtech sector, only a few companies — most notably Trade Desk Inc. — have found lasting success in a digital advertising landscape dominated by Alphabet Inc.'s Google. Yet enticing valuations and insulation from trade conflict are helping Hinge Health and MNTN attract solid investor interest in their offerings, proving that, priced right, investors are willing to get behind listings from less-loved sectors. 'We're seeing renewed IPO interest in sectors like digital health and adtech because they sit at the intersection of strong secular tailwinds and maturing business models,' said Mike Bellin, PwC's US IPO leader. 'These companies are benefiting from increased demand for personalized, data-driven solutions and are now demonstrating the scale and profitability that public market investors are looking for,' Bellin said. 'This activity reflects a broader shift in the IPO market — investors remain selective, but they're ready to engage when the growth story is compelling and backed by fundamentals.' Ahead of pricing later on Wednesday, both the Hinge Health and MNTN IPOs were multiple times oversubscribed, people familiar with the offerings have said. Hinge Health is guiding investors to price at the top end or above a marketed range, Bloomberg News reported earlier Wednesday. Both deals are proving well-timed, with the recent broader market recovery and pullback in volatility measured by the VIX Index – Wall Street's so-called fear gauge — falling below 20 in the past week before lurching back up on Wednesday. Other recent debuts have delivered meaningful post-IPO gains — a necessary precursor to greater activity levels. Most notably, shares of CoreWeave Inc. have more than doubled since the AI data center operator went public in late March, salvaging what had seemed like a misfire of epic proportions when the size of the offering was cut and the stock initially traded underwater. Since then, only five companies raising more than $100 million, excluding blank-check companies, have gone public in the US as the tariff drama whipsawed markets. Yet all five are trading above their respective IPO prices, and the few names that have debuted in recent weeks have offered either little or no exposure to goods facing tariffs, or a preparedness not to press investors for top dollar. 'In light of the tariff, economic, inflation uncertainty, investors are focused on sectors and stories which are relatively protected from trade policy, demonstrate visible growth and reasonably valued,' said Stephane Gruffat, global head of equity capital markets syndicate at Deutsche Bank AG. Hinge Health, which uses software and AI to automate musculoskeletal care for people experiencing chronic pain or recovering from surgery, would command a market capitalization of nearly $3 billion at the top of its IPO price range. This equates to about 7.6 times last year's revenue of $390.4 million, according to Bloomberg calculations. Though Hinge Health lacks an ideal peer, the IPO values the company at a significantly lower revenue multiple than digital health companies such as Veeva Systems Inc. and Doximity Inc., as well as software firms concentrating on specific industries such as trades-focused ServiceTitan Inc. whose shares are up more than 70% since it went public in December. Hinge Health is also set to list at a significantly lower valuation than the $6.2 billion figure implied by a 2021 funding round when the pandemic underscored the value of virtual health-care options. Despite bringing the star power of creative director and movie star Ryan Reynolds, MNTN's IPO values the 16-year-old company at a modest market cap of as much as $1.4 billion. That's about six times trailing revenue of $226 million last year, well below the double-digit sales multiple of Trade Desk, which went public in 2016. Smaller adtech companies such as PubMatic Inc., Viant Technology Inc. and Magnite Inc. trade at comparatively modest trailing revenues multiples. 'Trade Desk does get a premium given its scale and track record so MNTN should trade at a discount,' said Rohit Kulkarni, Roth Capital Partners' senior research analyst. Still, MNTN's 28% top-line growth in the first quarter of 2025 versus a year earlier, and the rapid growth of the streaming services it helps steer small and medium-sized businesses' ad dollars towards, may convince investors to to treat it more like Trade Desk than other adtech firms. 'There was a time when adtech was immediately looked at with suspicion because of a long string of failures but Trade Desk helped mitigate that,' said Matt Kennedy, senior strategist at Renaissance Capital, a provider of pre-IPO research and IPO-focused ETFs. 'It's not like digital health and adtech are working right now, and the most highly valued companies are still staying private as long as possible.' Why Apple Still Hasn't Cracked AI Inside the First Stargate AI Data Center Anthropic Is Trying to Win the AI Race Without Losing Its Soul Microsoft's CEO on How AI Will Remake Every Company, Including His Cartoon Network's Last Gasp ©2025 Bloomberg L.P. Error 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
