Before the bell: long-term interest rates matter more than short-term rates

Microsoft and Circle shine in New York, while Proximus and Belgian REITs brighten the mood in Brussels.

The Euro Stoxx 50 dipped 0.3%, while the S&P 500 closed nearly unchanged. Today will likely be even quieter, as United States markets are closed in observance of Juneteenth. Yesterday, the Federal Reserve held its policy meeting—an unsurprising affair resulting in no rate change. Jerome Powell remarked that import tariffs make it difficult to be confident inflation is under control. One wonders whether Trump—between golfing and keeping tabs on Iran—will weigh in with a bit less diplomatic wording. Yet perhaps the focus on short-term rates is overdone. Long-term bond yields matter more: they are set by the market and have a larger impact on the cost of borrowing and investing. Today, United States long-term yields remain high, pushing mortgage rates near 7%—cooling off real estate activity. Europe, by contrast, benefits from much lower long-term rates. Coincidence or not, Aedifica, Cofinimmo, and WDP were the top gainers in the Bel20 yesterday. Outside the index, Montea, another Belgian REIT, rose 1.9%. Proximus jumped 3.4% after naming Stijn Bijnens as its new CEO.

Asian markets are more cautious this morning, with Japan down 1% and Hong Kong off 2%, as tensions in the Middle East continue to simmer. The Swiss National Bank is expected to cut rates today. Otherwise, it’s a quiet day as companies head toward the close of Q2.

Quiet climb to a record, with fewer employees

Without much fanfare, Microsoft has once again notched fresh all-time highs. It closed yesterday at 480.24 dollar, up 14.7% year to date. That may not sound like much, until you consider it recovered from a 20% correction. The software giant now weighs in at a staggering 3,570 billion dollar market cap—making it the world’s most valuable listed company. Still, Microsoft isn’t resting on its laurels. After laying off 6,000 employees in May, more cuts appear to be coming—this time in sales. With 45,000 sales and marketing staff out of 228,000 total employees, a little streamlining might not hurt. If not, the company risks needing more drastic measures later.

The circle closes for Circle

Wall Street continues to deliver superlatives. Circle, the firm behind the stablecoin USDC (a cryptocurrency pegged to the dollar), soared 34% to 199.56 dollar yesterday. The company went public earlier this month at 31 dollar. The rally came after the United States Senate passed legislation aimed at regulating stablecoins, paving the way for broader adoption. Major retailers like Amazon and Walmart are already exploring stablecoins for customer payments. That could spell trouble for traditional payment processors and card issuers.

Did you know…

that Bloomberg reports that MiniMax, a Chinese start-up developing a hyper-efficient AI language model, is planning a swift IPO? Its partners include Alibaba and Tencent.