Bloomberg - Evening Briefing - Burned by surprise

Bloomberg Evening Briefing

On Monday morning, one of the world’s most profitable currency trades unraveled thanks to a twist in Mexico’s elections that few saw coming. A day later, investors in India started frantically dumping stocks, triggering a $386 billion wipeout when they realized they had badly miscalculated the scope of Narendra Modi’s election victory. Around the world, surprise results in some of the biggest developing countries are illustrating how much markets have riding on the politics of 2024—and the pitfalls of trusting opinion polls to predict the outcome. The Year of the Election as it’s being called, in which 40 countries are holding national votes, is already burning investors, providing an early warning as votes in the European Union and UK near—not to mention the looming global fallout from the US election in November. 

Here are today’s top stories

A year since Blackstone President Jon Gray hailed a “golden moment” for private credit, the gold is already losing its luster as far as Wall Street is concerned. The pace of buyouts is slowing and some private credit funds are struggling to return cash to their investors. Meanwhile the banks are back, contesting deals and undercutting direct lenders on margins.

Much of the worry over US commercial property has legitimately centered on the office market, where more than $38 billion in buildings were in distress as of March. That’s compared with apartment buildings, of which only about $10 billion worth are in trouble. But what’s been lost in the shuffle are multifamily buildings. They make up the biggest share of properties with potential distress—exceeding even offices—with more than $56 billion worth of real estate at risk. And unlike office buildings, which are largely backed by major financial institutions, much of this sector’s calamity is centered on personal investors

Jensen Huang, the Nvidia billionaire, just led an unprecedented cast of tech glitterati to the world’s biggest computing conference in Taiwan, where he effortlessly upstaged the likes of Intel’s Pat Gelsinger without a single official keynote or session. From packing a 4,000-seat sports stadium to paparazzi-fueled night-market jaunts, the leather jacket-clad CEO and his $3 trillion company drew the largest audiences and biggest entourages. As icing on the cake, he just joined the likes of Elon Musk in a select group of business chieftains worth at least $100 billion. That’s thanks to a $315 billion Nvidia market rally over three frantic days. “Someone coined the term Jensanity,” said Dan Nystedt, an analyst at TriOrient Investments, “andthat’s exactly what it’s been.”

Jensen Huang Photographer: Annabelle Chih/Bloomberg

Over the past 18 months, Tesla has missed its sales goals and seen its share price fall, as Chief Executive Officer Elon Musk makes dramatic decisions about the company’s future. Musk cut the price of Tesla cars, fired much of the team behind its Supercharger network and hinted that Tesla will pursue a robotaxi to position itself as more of an artificial intelligence company than an automaker. With Tesla’s share of the electric vehicle market getting smaller as rivals ramp up, is the once-iconic carmaker on its way to irrelevance?

Oh those meme stocks. Keith Gill, whose Roaring Kitty online moniker has sent GameStop shares surging yet again, sparked another rally in the video-game retailer after a YouTube post said he’d return to the platform Friday for the first time in three years. GameStop shares rose 47% to $46.55, triggering multiple volatility halts. The stock is up 76% in two days and has soared 167% since Gill tweeted a cryptic meme on May 12. While Gill’s YouTube post contained no information on what the investor planned to discuss or whether he’d disclose new positions, his anticipated return sparked further speculation that he’s bullish on GameStop. And that apparently was more than enough.

Keith Gill Photographer: SOPA Images/LightRocket

The top leadership structure of South Africa’s African National Congress said it will seek to form a government of national unity with opposition groups after last week’s election failed to produce an outright winner. The ANC won marginally more than 40% support in the May 29 vote, ceding its parliamentary majority for the first time since apartheid ended three decades ago. That means it will have to secure the support of at least one of its three main rivals to retain power.

Until very recently, Chinese leader Xi Jinping may have felt vindicated in striking a “no limits” partnership with his ally in the Kremlin, Minxin Pei writes in Bloomberg Opinion. China has managed to provide just enough support to strengthen Vladimir Putin’s war on Ukraine, tilting momentum on the battlefield without blatantly contravening US red lines. But Pei notes that Russia’s recent string of advances are threatening to make Xi’s life far more difficult.

A hardware store in Kharkiv, Ukraine, lay destroyed following a Russian strike on May 26. Photographer: Sergey Bobok/AFP

What you’ll need to know tomorrow

Sydney’s Best Restaurants Are Shutting Down

For decades, Sydney has been one of the world’s top dining destinations. But now the city is in a critical culinary moment, as some of its highest-profile restaurants shutter. They are the victims of Australia’s cost-of-living crisis and the lingering effects of the pandemic. Owners throughout the industry have blamed the tough conditions on everything from elevated interest rates and rising wages to high prices. Workplace regulations that will be introduced in August, aimed at improving minimum standards for casual workers including pay, may make things even tougher.

Sydney, Australia  Photographer: Brendon Thorne/Bloomberg

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