Market Beats | New York Governor Signs Law Restricting ICE Operations; US May Job Growth Outpaces Forecasts; Point72 Explores Tap on Trading Insights from External Hedge Funds; SpaceX Plans Record Retail Share Allocation in Massive IPO; Traders Fully Price In Fed Rate Hike by Year-End; Meta Weighs Raising Equity Following Alphabet’s Funding Success; Bitcoin Drops Below $60,000 for First Time Since October 2024

—— New York Governor Signs Law Restricting ICE Operations; US May Job Growth Outpaces Forecasts; Point72 Explores Tap on Trading Insights from External Hedge Funds; SpaceX Plans Record Retail Share Allocation in Massive IPO; Traders Fully Price In Fed Rate Hike by Year-End; Meta Weighs Raising Equity Following Alphabet’s Funding Success; Bitcoin Drops Below $60,000 for First Time Since October 2024

1. New York Governor Signs Law Restricting ICE Operations

New York Governor Kathy Hochul signed legislation that bars masked US Immigration and Customs Enforcement agents from operating in the state and restricts federal immigration enforcement at certain sensitive locations like schools and churches. The new law, signed Friday, also bans local law enforcement agencies from entering into agreements that allow police officers to be deputized as immigration agents and creates a legal pathway for New Yorkers to sue federal officials they believe have violated their rights during immigration operations. The measure escalates a confrontation with the Trump administration which has threatened a surge of agents to the state.

White House Border Czar Tom Homan has said that New York’s limits on cooperation would force ICE to shift away from jail-based arrests and conduct larger, more visible operations in neighborhoods. “We don’t need law enforcement wearing masks,” Hochul said on Friday. “There is no rationale other than to intimidate and threaten people.” The Department of Homeland Security said it would not comply with the New York restrictions, arguing that local governments cannot dictate how federal immigration agents operate. The agency pointed to recent arrests in the state including several convicted of violent crimes.

Hochul has sought to draw a distinction between cooperation with federal authorities on serious crimes and participation in broader immigration enforcement.

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2. US May Job Growth Outpaces Forecasts

US job growth topped all forecasts in May and the unemployment rate held steady, offering the clearest sign yet that the labor market may be breaking out of a prolonged period of lackluster hiring. Nonfarm payrolls increased 172,000 last month after upward revisions to the prior two months, according to Bureau of Labor Statistics data out Friday. That marked the strongest three-month advance in more than two years. The unemployment rate was unchanged at 4.3%, and average hourly earnings rose 0.3%.

The report suggests the labor market is firming after near-zero job growth last year, despite more recent concerns about rising energy prices that have driven consumer sentiment to a record low. The figures could put more pressure on the Federal Reserve to consider interest-rate increases in order to contain inflation. Treasuries sold off, sending two-year yields up more than 8 basis points to 4.12%. Interest-rate swaps showed that traders boosted their expectations for a Fed rate hike, with markets fully pricing in a quarter-point increase by year-end. The advance in hiring was led by leisure and hospitality, which added 70,000 jobs, the most in more than three years.

The healthcare and social assistance sector, which has been the primary driver of job growth over the last year, continued to hire at a firm pace.

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3. Point72 Explores Tap on Trading Insights from External Hedge Funds

Point72 Asset Management is exploring ways to tap trading intelligence from external hedge funds, as rivals such as Citadel race to collect such signals from outsiders. The firm has hired alpha-capture veteran Ricky Nardis, who is set to start at Point72 mid-next year and may look at building a program that collects trading insights from other hedge funds, people familiar with the matter said, asking not to be identified discussing private information. The plans are fluid and could change, one of the people said. Nardis had earlier worked at Marshall Wace for its alpha-capture-focused fund, TOPS, led by Anthony Clake, and was at Millennium Management previously, the people said. Representatives for Stamford, Connecticut-based Point72 and London-based Marshall Wace declined to comment. Nardis couldn’t be reached for comment.

Some of the industry’s largest players have established, or are looking at building so-called buy-side alpha capture programs, which collect trading data or ideas from outsiders in exchange for a fee. Ken Griffin’s Citadel is also preparing to launch a new program that will collect trading insights from other hedge funds to feed into its own quantitative strategies. The approach was pioneered by Marshall Wace more than two decades ago, traditionally receiving insights from sell-side market participants, such as analysts at banks, to generate trading signals based on the vast amounts of data. But it has recently morphed into programs that take ideas from buy-side contributors as well, including other hedge funds. Point72 and Citadel already run sell-side alpha capture programs.

Founded by Steve Cohen, Point72 manages roughly $51 billion and employs more than 3,300 staffers globally. It specializes in making long-short bets on stocks but has also created a centralized quant business while pushing into macro trading and venture capital. The firm started conversations with investors last year to raise money for a private credit fund.

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4. SpaceX Plans Record Retail Share Allocation in Massive IPO

SpaceX is preparing the largest retail allocation ever attempted in a megacap IPO, with Elon Musk seeking to reserve as much as a quarter of the company’s $75bn float for individual investors. According to people familiar with the move, the billionaire chief wants to place small shareholders near the centre of the rocket and satellite group’s ownership from the outset, reflecting Musk’s longstanding preference for retail investors over Wall Street institutions. “Elon’s philosophy is all about broad access, that’s why he wants to include retail,” said one of the people.

No previous listing has combined a company of SpaceX’s profile with an individual of Musk’s reach. The world’s richest man promotes his businesses to 240mn followers on X, while Starship launches have turned the company into one of the world’s most recognizable private groups. In large-cap IPOs, retail buyers have historically received 5 to 10 per cent of the shares on offer. The allocation is significant enough that SpaceX took the unusual step of naming the five online brokerages distributing shares in its prospectus. The company also added a risk disclosure warning that retail participation could drive volatile trading. Reuters previously reported that up to 30 per cent of shares could go to retail.

The final retail allocation has yet to be set and will depend in part on demand, said people close to the deal.

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5. Traders Fully Price In Fed Rate Hike by Year-End

Traders in the $31 trillion Treasuries market fully priced in a Federal Reserve interest-rate hike by the end of this year after US job growth topped all forecasts in May, spurring yields higher. Interest-rate swaps showed traders bracing for a quarter-point increase in the US central bank’s key rates by the December policy meeting, with a roughly 60% chance that the move comes in October.

A selloff in the Treasuries market pushed yields higher across maturities on Friday, with those on two-year notes — most sensitive to changes in US central bank policy — jumping as much as 11 basis points to 4.15%, the highest this year. The 10-year yield was higher by six basis points to 4.53%. The dollar rose. “The question is: Will the Fed get out ahead of where markets are pricing, or are markets going to try to push the Fed,” Jeffrey Rosenberg, senior portfolio manager at BlackRock, said on Bloomberg Television. “So far, it’s the latter.”

That leaves policymakers, who will meet later this month for the first time under the leadership of Chairman Kevin Warsh, “playing catchup,” he said.

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6. Meta Weighs Raising Equity Following Alphabet’s Funding Success

Meta Platforms Inc. is considering raising equity after Alphabet Inc.’s successful $85 billion sale, according to the Financial Times. Meta shares fell on the report. Like Google’s parent, the social media company needs the money to fund its massive investments in infrastructure for artificial intelligence. Meta hasn’t yet hired banks and may not ultimately issue new stock, the FT reported, citing three people familiar with the discussions.

Meta shares slipped as much as 7% on the report, to $582.91. A spokesperson for the company described the report as “pure speculation.” “We’ve been clear that huge opportunities lie ahead in AI, and we’ll continue focusing on raising capital in the most flexible ways to support that,” the spokesperson said. Meta recently boosted full-year capital expenditures to as much as $145 billion — an increase driven in part by rising component prices.

Google’s offering was multiple times oversubscribed, Bloomberg has reported. Alphabet’s offering of Class A shares and Class C Capital Stock raised a total of $18 billion, up from a target of $15 billion.

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7. Bitcoin Drops Below $60,000 for First Time Since October 2024

Blue Origin’s New Glenn rocket exploded in a massive fireball while undergoing a test on a Florida launchpad Thursday evening, dealing a major setback to the Jeff Bezos-backed firm in its efforts to challenge a dominant SpaceX. The firm was preparing the vehicle for its fourth launch, which was slated to deploy a batch of satellites for Amazon.com Inc.’s Leo, a rival satellite network to SpaceX’s Starlink. None of the satellites were on the rocket when it exploded, a spokesperson for Amazon said. “Very rough day, but we’ll rebuild whatever needs rebuilding and get back to flying,” Bezos wrote in a post on X. The rocket experienced an “anomaly” during the test and all personnel have been accounted for and are safe, the company said on X.

New Glenn, which is key to Blue Origin’s plans for space exploration, is years behind schedule and has faced longer-than-expected waiting periods between flights. The explosion is the latest blow to its reputation as a reliable alternative to SpaceX’s Falcon 9. It’s unclear exactly how the explosion will affect the company moving forward, but Blue Origin’s launch schedule is certain to suffer significant delays.

The company has touted that New Glenn has a backlog of $10 billion in customer contracts, and CEO Dave Limp said last month he’d like to launch the rocket eight to 12 times this year.

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