Key Takeaways
- Foxconn (2317) reported a massive 39.57% year-over-year revenue increase for May, driven by unprecedented demand for AI racks that has pushed Q2 performance well above previous guidance.
- CNN revealed secret Israeli military deployments in Azerbaijan during the recent war with Iran, involving elite commando units and drone operations stationed just 60 miles from the Iranian border.
- Broad "war fatigue" has gripped the United States, with a new Economist/YouGov poll showing 68% of Americans want the Iran conflict to end immediately due to economic concerns.
- China has authorized higher interest rates on dollar deposits at select banks, a strategic move to manage liquidity as President Xi Jinping prepares for a high-profile trip to North Korea.
- Turkey’s annual inflation hit 32.61% in May, slightly exceeding market expectations and highlighting the persistent price pressures facing emerging markets.
Foxconn Defies Seasonal Slump via AI Expansion
Hon Hai Precision Industry (2317), known globally as Foxconn, announced that its May revenue surged 39.57% year-over-year. While the second quarter is traditionally an "off-season" for the Information and Communication Technology (ICT) industry, the company noted that AI server racks are maintaining a significant growth trend.
Management stated that Q2 performance is currently tracking well above previous expectations of "significant growth." However, the electronics giant cautioned that it remains necessary to monitor the impact of a volatile global political and economic situation on long-term supply chains.
Secret Israeli Operations and Rising War Fatigue
A bombshell report from CNN has detailed how Israel secretly deployed elite military and intelligence units to Azerbaijan during the war with Iran. These units operated out of covert sites in southern Azerbaijan, providing a "valuable perch" to monitor northern Iran and facilitate drone operations. Some units were reportedly stationed only 60 miles from the Iranian city of Tabriz, which was a primary target of Israeli strikes.
Domestically, American support for the conflict is waning rapidly. A recent Economist/YouGov poll found that nearly 7 in 10 Americans favor a deal to end the Iran conflict swiftly. This sentiment is largely driven by economic anxiety and general war fatigue, as the conflict continues to influence global energy prices and defense spending.
China Adjusts Monetary Policy and Diplomatic Ties
In a move to stabilize its financial sector, China is now allowing certain banks to offer higher interest rates on U.S. dollar deposits. This policy shift comes as Beijing attempts to balance capital flows and support the yuan. Simultaneously, the Chinese Foreign Ministry announced that President Xi Jinping’s upcoming trip to North Korea is expected to "boost current friendship" and regional coordination.
On the border with Myanmar, China has called for the protection of Chinese nationals and institutions following recent unrest. Foreign Minister Wang Yi pledged to maintain stability along the China-Myanmar border, emphasizing that Beijing will not tolerate disruptions to its strategic interests in the region.
European Markets and Global Macro Indicators
European markets showed mixed results in early Friday trading. Evoke (EVOK) led gainers with a 10.0% jump, while Inditex (ITX) rose 1.2%. Conversely, Air France-KLM (AF) fell 2.0% and HSBC (HSBA) dropped 1.7% following broader sector volatility.
Economic data from France provided a silver lining, as manufacturing production grew 0.4% in April, beating the estimated 0.2%. Additionally, the Oman Oil Terminal has resumed operations following a recent blast, easing immediate concerns regarding Middle Eastern oil supply disruptions. However, Turkey's inflation remains a concern, with May consumer prices rising 32.61% year-over-year, keeping pressure on the central bank to maintain a hawkish stance.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.