Xi Steps Up Call to End Iran War, SpaceX’s Mega-IPO Bank Lineup | The Opening Trade 5/20/2026
Speakers
Clare
— Portfolio Manager
Freddie
— Fund Manager
Rufaro
— Head of Fixed Income UK and Europe at RBC Wealth Management
Stéphane Boujnah
— CEO, Euronext
Summary
The episode covers UK inflation data coming in softer than expected, global bond yields stabilizing after a sharp selloff, and a potential Samsung strike threatening chip supply. Key interviews include Euronext's CEO on IPO momentum, a fund manager favoring staples and financials, and an analyst bullish on NVIDIA ahead of earnings. Geopolitical tensions in the Middle East and fiscal concerns remain dominant macro themes.
- UK April CPI fell to 2.8%, below forecasts, reducing Bank of England rate hike expectations.
- Global long-end yields are near multi-year highs but show signs of pausing.
- Samsung union talks break down, raising risk of a strike that could disrupt memory chip supply.
- NVIDIA earnings are seen as a critical macro event; purchase commitments are the key metric.
- The fund manager Freddie favors Kroger, Tesco, and J.P. Morgan while avoiding AI hardware.
- NATO considers helping secure the Strait of Hormuz if not reopened by July.
- SpaceX IPO is reportedly led by Goldman Sachs with a $2 trillion valuation target.
- European defense IPO pipeline is strong, driven by capacity needs and high valuations.
Trade Ideas
Long-end U.S. Treasuries are attractive but wait.
30-year U.S. Treasury yields have reached levels not seen since the Global Financial Crisis, making the long end increasingly attractive. However, we are patient and not yet buying, monitoring for further fiscal and inflation dynamics. The setup is worth watching for a potential entry point.
Avoid investment grade credit.
Credit spreads are too tight given heavy issuance from governments and tech sectors, inflationary outlook, and rising real yields. We expect spreads to widen further and recommend being underweight investment grade corporate credit.
Staple retailers benefit from consumer weakness.
Weakening consumer spending benefits staple retailers as consumers trade down. Kroger and Tesco are defensive holdings with stable earnings, low debt, and attractive valuations (13.5x earnings). They are less impacted by higher yields and offer a safe haven in a slowing economy.
J.P. Morgan benefits from higher yields.
Higher bond yields are a net positive for J.P. Morgan as a financial institution. Banks with large net interest income benefit from a steeper yield curve and higher rates, making J.P. Morgan an attractive holding in a rising rate environment.
NVIDIA is the best AI pick.
NVIDIA's purchase commitments to suppliers continue to rise sharply, indicating strong demand and tight supply chain control. With accelerating top and bottom line growth and a compelling valuation relative to its ecosystem, NVIDIA remains the primary beneficiary of the AI buildout. The risk is solely about supply, not demand.
