June Sees Record Global Markets but Tech Giants Falter; Latvia Hosts First State-Owned IPO

June was a positive month for stock markets, though traditional leaders—the 'Magnificent Seven' tech giants—underperformed. Elon Musk's SpaceX successfully completed its initial public offering (IPO), issuing shares worth $75 billion and creating a $2 trillion company that immediately entered the global top ten. After an initial 50% surge, shares stabilized around $170, roughly 25% above the IPO price.

On the geopolitical front, the US and Iran signed a memorandum of understanding in June, committing to cease military actions and begin official negotiations. Markets welcomed the development, sending oil prices down to around $73 per barrel. However, oil transit through the Strait of Hormuz remained heavily restricted, and Israel, not included in the initial agreement, expressed dissatisfaction. A final deal is expected within 60 days.

Lower oil prices and easing inflation pressures gave central banks some breathing room. The European Central Bank raised interest rates on June 11, but Germany's long-term bond yield fell by nearly 10 basis points. Germany's preliminary annual inflation rate dropped from 2.6% to 2.3% in June. In the US, the Federal Reserve held its first meeting under newly appointed Kevin Warsh on June 17; he did not signal support for rate cuts but emphasized a firm commitment to anchoring inflation expectations, ready to raise rates if needed.

In local markets, Latvia witnessed a rare event: state-owned infrastructure maintenance and construction company LAU Infra Grupa completed its IPO, raising over €6 million. It is the first state-owned enterprise to offer shares to the public. Luminor-managed second-pillar pension plans purchased shares worth more than €0.5 million. Meanwhile, Latvenergo issued new 7-year bonds totaling €300 million, with demand nearly nine times exceeding the offer; the coupon rate was set at 4.16%.