AGP Executive Report

AI-led rally: US indexes hit fresh highs as AI spending optimism lifted tech; Marvell jumped ~30% after Nvidia CEO Jensen Huang called it the “next trillion-dollar company,” while HPE surged on an AI server/network outlook. Mega-fundraising: Alphabet plans an $80B AI compute push, including a $10B Berkshire Hathaway investment, after announcing a $180B–$190B capex range. Labor signals mixed: JOLTS showed job openings up 731k to 7.618M (highest since May 2024) but hiring fell 419k, with resignations at a near-6-year low—suggesting “slow-hire, slow-fire” amid Iran-war uncertainty. Geopolitics & rates: Markets weighed Middle East risk and oil moves; Europe held modest gains as Brent eased. Corporate updates: Dollar General raised FY guidance after Q1 profit beat; Hormel kept 2026 outlook despite fuel/logistics cost pressure. Automation demand: Interact Analysis forecasts collaborative robot shipments nearly doubling to 128,918 units by 2030, with China set to hold 61.4% share. Policy & tax tech: Israel’s Tax Authority says it will use AI to review 100% of tax reports (from ~4% today). Tokenization liquidity: Symbiotic launched Liquid Lane to swap tokenized assets for stablecoins quickly, aiming to fix redemption delays.

AI Funding Push: Alphabet plans to raise up to $80bn via equity sales, including a $10bn Berkshire Hathaway investment, to expand AI compute as its capex outlook climbs to $180–$190bn—an aggressive bet that demand for AI infrastructure stays ahead of supply. Semiconductor Demand: STMicroelectronics doubled its 2026 data-centre revenue forecast to about $1bn and sees 2027 potentially doubling again, pointing to sustained AI infrastructure buildouts (including major hyperscaler demand). Labour Market Risk (UK): The British Chambers of Commerce warns UK unemployment could rise by 400,000+ by 2028, with youth unemployment forecast to jump as higher labour costs and AI reduce entry-level hiring. Energy Volatility: Oil prices dipped after US-Iran talk uncertainty, with markets still nervous about the Strait of Hormuz and regional escalation risk. IMF Milestone (Sri Lanka): The IMF completed reviews under its rescue program, unlocking $695m in cash support and bringing total disbursements since 2022 to $2.4bn, though vulnerabilities remain. Corporate Watch (Australia): ASIC’s case against Rex and former directors is nearing its close, with the defence arguing major gaps in how the board’s statements were assessed. Telecom Competition (Australia): Vodafone’s network-sharing expansion is said to make it a credible challenger, narrowing the coverage gap with Optus and Telstra. Healthcare Policy (US): AHA urged CMS to revise FY2027 inpatient rehab and skilled nursing payment proposals, warning that tighter rules and productivity adjustments could reduce clinical flexibility.

Middle East Shock to Industry: Surveys show Iran-war supply strains are hitting European factories hardest, with Eurozone manufacturing still expanding but under pressure from fast-rising input costs and weaker demand. Oil-and-Inflation Spillover: Markets brace for more volatility as Iran-US talks wobble; Brent risks topping $100, keeping inflation and rates in focus. Mortgage Rates Watch: Zillow data shows 30-year mortgage rates easing slightly to 6.537%, but the broader message is “stay elevated” as oil-linked inflation keeps pressure on borrowing costs. AI Chip Boom in Asia: South Korea and Taiwan are seeing an AI-driven economic lift via higher tech pay, investment, and consumption, even as supply-chain buffers grow. Smartphone Demand Downshift: Counterpoint flags a record 2026 smartphone contraction (down 13.9%) tied to worsening memory chip shortages. Mining Cost Reset: AISC costs are structurally higher for miners, pushing electrification as a margin hedge; gold looks comparatively strong while copper faces a tougher cost floor. Policy & Budgets: Virginia lawmakers return to Richmond with a looming budget deadline and a major fight over data-center tax exemptions. Defense Contractor Momentum: SAIC posted a strong quarter with margin expansion and a large backlog, reinforcing defense spending resilience. Cloud Spend in India: Gartner forecasts public cloud services growth to $17.5B in 2026, led by AI-ready infrastructure.

Smartphones & chips: Counterpoint says global smartphone shipments could fall 13.9% in 2026 to 1.08bn units as memory-chip shortages worsen, hitting low-end models hardest. China growth pulse: China’s official manufacturing PMI stalled in May (50 vs 50.3 in April) as export orders weakened and input costs rose, underscoring demand fragility. AI-driven semis rally: TrendForce lifted 2026 memory and DRAM forecasts sharply, while Samsung crossed the 2,000-trillion-won valuation mark on the AI memory boom and HBM4E sample shipments. Geopolitics & commodities: Copper climbed as Goldman raised its 2026 target, with markets watching Iran-related tariff and supply risks; grains also bounced as oil prices supported biofuel demand. Housing cooling: UK Nationwide reported house prices down 0.6% m/m in May, with Iran-war uncertainty and higher rates weighing sentiment. Spain manufacturing: Spain’s PMI eased to 51.2 in May as Middle East-linked supply delays, costs, and weaker new orders pressured output. Corporate moves: Applied Nutrition raised its outlook, bought a US site for $16m, and licensed Sour Patch Kids/Swedish Fish sports nutrition production. India rates watch: RBI is expected to hold at 5.25% on June 5, with West Asia risks clouding inflation and growth.

IMF/WB/IEA Energy Security: The IMF, World Bank and IEA warn that if Strait of Hormuz shipping stays disrupted, global oil inventories could be drawn down fast enough to trigger summer fuel scarcity and broader economic strain. Macro Inflation Watch: The Philippines’ BSP estimates May inflation may have jumped to 7.1%–7.9% (7.9% would be the fastest in 3+ years), blaming food costs, peso weakness, and Middle East-linked energy shocks. Central Banking Signals: Reserve Bank of India policy looks set to stay on hold at 5.25% for June 5, while Australia’s RBA vote split 3-3 keeps a July rate hike on the table. China Demand Check: China’s May factory PMI stalled around the 50 line as export orders weakened and input costs rose, adding pressure to shift toward domestic demand. Housing Pressure (AU): New data shows Sydney and Melbourne home prices falling as higher rates and tax changes bite, while national prices are mostly flat. Markets & Stocks: S&P 500 hit a record 9th straight weekly gain as oil eased on ceasefire hopes; Zscaler slid despite beating Q3 estimates, while Snowflake and Dell jumped on stronger AI-linked outlooks. Crypto Market Structure: CME’s move to 24/7 Bitcoin futures ends the old weekend “gap” trading signal.

Housing & Tax Policy Shock (Australia): FoundIt warns Queensland and Melbourne renters face rent rises far above Treasury’s “$2 a week” estimate after negative gearing changes, with some Brisbane areas flagged for ~$17–$18 weekly jumps and Melbourne increases projected to wipe out promised tax relief. Sovereign Risk (Bulgaria/EU): The FT says Bulgaria could be hit with an excessive deficit procedure soon after joining the eurozone, with the deficit seen above the 3% rule and potential borrowing-cost pressure. Energy & Commodities (Hormuz): IMF/World Bank/IEA chiefs warn summer fuel shortages and market instability if Strait of Hormuz shipping doesn’t normalize, as inventories are drawn down and fertilizer prices hit low-income countries. Crypto Tax (EU): Circle’s policy lead says the EU’s $23B crypto tax forecast may be overstated, arguing transaction levies could push activity to DeFi and non-EU venues. AI & Markets (Tech): Wall Street’s AI-led rally keeps lifting “old guard” tech names; Dell and Micron momentum stories dominate, while Ruvi AI pitches a contributor-paid model for training data. Semiconductors (Tower): Tower Semiconductor highlights AI-driven silicon photonics demand with 2027 contract visibility and upbeat guidance.

Housing Affordability: Australia’s house-price slide isn’t translating into easier borrowing—Canstar analysis using Westpac forecasts shows Sydney and Melbourne prices may fall further in 2026, but borrowing capacity is shrinking faster, tightening entry-level affordability. Middle East Energy/Fertiliser Shock: IMF, World Bank and IEA warn fuel shortages could hit this summer if Strait of Hormuz shipping doesn’t normalize; the same risk is flagged for fertiliser markets, with Zimbabwe warned maize output could be severely damaged if disruptions persist. India Market Mood: Indian benchmarks ended the week lower as FII selling and a below-normal monsoon forecast revived food-inflation worries; Nifty and Sensex both fell, with crude weakness helping some sectors. Wall Street Tech-Led Bounce: US stocks closed at record highs on AI and earnings strength, with Dell’s forecast upgrade driving tech; investors still watch Iran-deal headlines. FX/Ruble Outlook: Sovcombank expects the ruble to stay supported in June, helped by higher oil export earnings amid ongoing Hormuz-related supply strain. Commodities Watch: Asian rice prices jumped in May as war and weather risks lift fertiliser and fuel costs, while global grain sentiment stays cautious. Crypto/AI Finance: AI is increasingly embedded in money management and fraud detection, while markets weigh risk across crypto as sentiment shifts. Wellness Demand: Sauna investment trends continue to spread in Australia and New Zealand, reflecting ongoing at-home recovery spending.

Global Food Outlook: The World Bank says West Asia conflict-driven food price pressure in 2026-27 should be smaller than early Russia-Ukraine effects, but still lifts its forecast—food prices up 2% in 2026 and 1% in 2027, with wheat and maize prices rising 4% in 2026. Wall Street & AI Earnings: U.S. stocks extended record gains as Dell surged after raising full-year guidance on booming AI server demand; investors also watched potential U.S.-Iran deal headlines. Housing Pressure: Zillow flagged a grim housing outlook, pointing to high rates and prices versus incomes plus tight supply of homes. Corporate Strategy & Capital Markets: Universal Music rejected Pershing Square’s unsolicited proposal, citing undervaluation, while Steakholder Foods advanced warrant exercises raising about $1.1m gross. Real Economy Watch: Canada slipped into a technical recession, with weak investment and housing weighing on growth; NAIOP sees office absorption improving but warns recession odds remain. Regional Growth Constraints: A water-constrained region near Mannheim expects 34,000 new residents and 17,500 new homes by 2031, hinging on whether new water capacity can keep up. Fintech/Market Infrastructure: FedEx Freight spinoff begins June 1 (FDXF), and Snowflake’s forecast raise signals continued enterprise AI data platform momentum.

AI Infrastructure & Semiconductors: Dell surged after lifting revenue and profit forecasts as AI data-center buildouts drive demand for its Nvidia-powered servers, with AI server revenue guidance raised to about $60bn for fiscal 2027. Market Mood: Wall Street pushed to fresh records as a tentative US-Iran ceasefire extension eased oil volatility, while corporate earnings kept the rally intact. Gold & Rates: UBS trimmed its end-2026 gold forecast to $5,500/oz as Iran-war risks and higher-for-longer rate expectations weigh, even as analysts still expect bullion to recover. Energy & Commodities: Ukraine cut gas storage tariffs to spur long-term bookings ahead of winter; wheat prices slid on a stronger euro and improved harvest outlooks. Emerging Markets FX: Zambia’s kwacha is expected to strengthen on mining inflows and copper strength, while Ghana’s cedi faces pressure from FX demand. China Macro: Reuters poll points to flat factory activity in May as weak demand and cost pressures bite, despite AI-driven electronics support. Housing & Policy: South Africa’s SARB warned more rate hikes may be needed if inflation risks worsen. Tech Hardware Outlook: Omdia says the “AI Factory” model is reshaping data centers into intelligence manufacturing, with major capex still accelerating. Regional Growth: Mexico outperformed the US and Canada in travel spending and arrivals in 2025, helped by lower Middle East disruption exposure. Corporate Deals: Ocado shares jumped after a partnership with Asda to overhaul ecommerce infrastructure starting early 2027.

Rates & Housing: Freddie Mac put the 30-year mortgage rate at 6.53% (up 2 bps), keeping affordability tight even as the 10-year Treasury yield eases; Zillow and Fannie Mae still see rates hovering in the low-6% range. Fed Watch: The Fed’s preferred inflation gauge (PCE) jumped to 3.8% in April, raising questions about how soon policy can turn. Markets & Oil: Stocks pushed to fresh highs on a tentative US-Iran ceasefire extension, while oil swung with the deal’s odds and Hormuz risk. AI & Equities: BlackRock’s global strategist says AI buildout spending could reach $6T by decade’s end, supporting a risk-on stance; meanwhile, Epoch AI expects inference compute to outpace training by 2030. Corporate Signals: Best Buy surged after beating sales estimates; Oracle jumped on a JPMorgan Overweight call and a massive $30B cloud deal; El Pollo Loco authorized a $40M buyback. Crypto: Standard Chartered urged investors to treat Ethereum’s slump like Amazon’s post-dotcom reset, arguing fundamentals will catch up. Canada Risk: The BoC warned that geopolitics, AI, and sovereign-debt stress could combine into a shock that tests financial resilience. Commodities: Sugar prices slid as Brazil production and global surplus expectations weighed on the market.

Markets & Rates: Wall Street pushed to fresh records as oil slid and investors looked past Iran-driven uncertainty, while U.S. banks reported 1Q profits up 3.6% with capital and liquidity still strong, even as “paper” losses rose. Central Banks: South Africa faces a likely SARB rate hike as inflation hits a 19-month high and households’ debt burden worsens; South Korea’s central bank held rates but signaled a coming tightening cycle, lifting its 2026 growth forecast to 2.6%. NZ Economy & Budget: New Zealand’s Budget 2026 targets an earlier return to surplus, but economists warn forecasts may be optimistic amid Iran-linked inflation risks; the RBNZ also kept the OCR on hold while internal votes leaned toward hikes. Geopolitics & Energy: The Iran conflict remains the key macro swing factor, with lawmakers in the Philippines urging scrutiny of DOE/ERC rules amid power-cost and outage concerns. Business & Deals: Futurum Group bought Aptiviti/ETR to boost predictive tech-spend forecasting; Sanofi’s venglustat won priority review in the U.S. for type 3 Gaucher disease. Industry Outlook: Multiple market-forecast releases highlighted growth in automation, inspection robots, UPS systems, and virtual store design, reflecting continued capex focus on efficiency and resilience.

Central Banking Watch: New Zealand’s RBNZ held the OCR at 2.25% but Governor Anna Breman said hikes are “very likely,” with mortgage rates expected to rise—keeping pressure on households. Energy & Policy: Philippines lawmakers urged a wider review of DOE/ERC rules after May 13 power interruptions, arguing the issue may be both generation and transmission planning. Oil & Markets: US stocks hovered near records as Brent and WTI eased on hopes for US-Iran de-escalation, while investors weighed lingering geopolitical risk. Tech Earnings: Nutanix reported 34% higher full-year revenue and raised guidance; Palo Alto Networks faced scrutiny after Zscaler’s downbeat outlook, with investors watching its June 2 print. AI Infrastructure Theme: Goldman lifted its S&P 500 year-end target to 8,000 on earnings strength tied to AI spending, while Nvidia/semis sentiment stayed in focus. Consumer Demand Signal: IDC says smartphone shipments are set for the worst year on record in 2026 as memory shortages push prices higher. Africa Growth Outlook: The 2026 African Economic Outlook projects 4.2% growth, citing resilience amid tighter global conditions. Corporate Moves: AMSC posted strong fiscal 2025 results with revenue up to $299.2m and a bigger backlog, reinforcing demand for power control solutions.

AI/Chips Momentum: Nvidia says it will spend about $150B a year in Taiwan and calls the island the “epicentre” of the AI revolution, reinforcing the idea that AI capex is still accelerating even as geopolitics stays messy. Semiconductors & Markets: The AI memory rally keeps lifting Korea—SK Hynix hits $1T market value and drags the KOSPI to a record, while Bank of America upgrades South Korea’s growth view on chip-driven exports, investment, and consumption. Energy Costs: UK households face a 13% jump in the Ofgem energy price cap from July 1 (electricity +~5%, gas +~24%), with the Middle East conflict still the key driver. Central Banks: Sri Lanka’s central bank delivered a surprise 100bp hike to 8.75% to defend the currency and fight inflation; Hungary’s central bank flagged uncertainty but cites a stronger forint as a partial cushion. Lithium Supply: SQM raised lithium guidance after strong profits, betting demand from battery storage keeps the market tight. Cyber & Drones: DNS firewall demand is forecast to surge, and South Africa’s drone insurance debate is shifting toward stronger commercial third-party cover. Healthcare Watch: Zealand Pharma will present Phase 2 obesity/metabolic health data at the ADA sessions.

Fed/FDIC: The Fed and FDIC cleared the “living wills” of the biggest US banks, saying no major gaps remain after 2024 derivative-portfolio fixes—supportive for financial stability sentiment. Rates Watch: New Zealand’s OCR is expected to stay put at 2.25%, but markets are focused on whether guidance sets up a July hike. Macro Mood: US consumer confidence eased in May as Iran-linked inflation worries rose, even as households still expect some improvement later this year. Energy/Food Inflation: ANZ warns Australia’s food inflation risk is rising as Iran-driven oil stress lifts fertiliser costs (Australia imports most fertiliser), while US drivers brace for a “most volatile summer” at the pump if Strait of Hormuz shipping stays disrupted. AI/Markets: Semis led risk-on moves: Micron surged on AI memory demand targets, Qualcomm jumped on a ByteDance AI chip deal, and Nasdaq pushed to fresh highs. Healthcare/Policy: EMA backed both oral and high-dose Wegovy approvals, moving Europe closer to a major weight-loss pill launch.

Middle East Risk-On, Then Risk-Off: Markets jumped on fresh US-Iran “deal” chatter and hopes for Strait of Hormuz reopening, but the optimism got hit fast as the US carried out “self-defence” strikes and Iran signaled the talks are still far from settled—oil slid, then steadied around the mid-$90s, while FX and equities stayed jumpy. Rates & FX Watch: Traders are now focused on how the conflict tone feeds into inflation and the next rate path, with the Indian rupee’s rally likely to face month-end dollar demand. Earnings Spotlight: In New Zealand, Fisher & Paykel’s strong result brought relief and lifted sentiment, while Infratil’s guidance softness weighed on the stock. AI Meets Reality: Indian IT shares are down sharply YTD as AI shifts budgets from traditional outsourcing toward infrastructure and software, leaving revenue conversion lagging. Energy/Materials Themes: Freeport-McMoRan pushed copper output targets via leaching tech, while mining M&A momentum continues as majors chase scale and permitted assets.

Singapore Macro: Singapore’s Q1 economy grew 6% y/y, powered by AI-chip demand and stronger wholesale trade, manufacturing, and finance—while officials kept the 2026 growth range at 2%–4% but flagged rising downside risks from the Middle East. Israel Rates: The Bank of Israel cut its benchmark to 3.75% (from 4%) for the third time in six months, citing stable inflation and a stronger shekel, but warned cuts will be gradual amid lingering Iran uncertainty. Brazil Inflation: Financial markets lifted Brazil’s 2026 inflation forecast to 5.04% (from 4.92%), pushing expectations further above target as fuel-price pressure persists. UK Debt Politics: With Labour leadership turmoil in the background, UK debt-cost concerns resurfaced as the chancellor warned internal conflict could trigger a bond-market backlash. Housing/FX Stress: Ghana’s cedi extended depreciation to 10.11% ytd on FX demand pressures; mortgage-rate sensitivity remains a live theme as conflict-driven spreads stay the key swing factor. Regional Real Estate: Colliers says Metro Manila retail vacancy is improving, but a slower recovery is likely as Middle East risks weigh on spending. Saudi Healthcare: Saudi Arabia’s Global Health Exhibition 2026 expands into dermatology, orthopaedics/rehab, and dental—signaling continued Vision 2030 healthcare investment.