Friday, June 21: Five Things You Need to Know to Start Your Day

‘Loose and Stupid’

Donald Trump suggested Iran's downing of a U.S. drone  was a decision by a “loose and stupid” individual, a comment that may ease escalating tensions. The president said the Islamic Republic made “a very bad mistake” by shooting down the unmanned aircraft but declined to detail any potential response. The UN called for “maximum restraint” as Tehran and Washington disputed whether the drone was over international or Iranian waters.

Stocks, Oil Surge

Oil jumped the most this year on the drone attack, with WTI futures surging as much as 6.1%. Speculative traders who’d turned against crude recently are ready to pile back in, according to LPS Futures. Asian equity futures are flat to slightly higher after U.S. stocks advanced, with the S&P 500 opening at a record high. And the global bond rally marched on. Ten-year Treasury yields dropped below 2% for the first time since November 2016 as a shift toward easing global central bank policy and Iran tensions pushed investors toward havens. The dollar fell across the board, as the Norwegian krone and Swiss franc both gained more than 1%.

Xi’s Push

Xi Jinping told Kim Jong Un he’s visiting to push for a political settlement on the Korean peninsula, and said China is willing to play a constructive role in denuclearization. Beijing is ready to help Pyongyang “address its legitimate security and development concerns,” as part of a deal, according to CCTV’s account of the Chinese president’s remarks.

Southeast Asia Convenes

The leaders of Southeast Asia’s economies are set to gather in Thailand this weekend as the shadow of Trump’s trade war keeps the region on edge. While China is the biggest trading partner for most of the participants, they also can’t afford to offend the U.S. Aside from slowing growth, the 10-nation summit in Bangkok is expected to focus on sustainability, ways of knitting the region’s markets together and efforts to foster digital innovation without compromising privacy and security.

Mr. Bear Turned Bullish

John Rachmat spent three years researching, backtesting and tweaking his quantitative investment model before he was convinced he had a winning formula. The former sell-side strategist, who accurately predicted the last two bear markets in Indonesia, has dropped near the bottom of the country’s performance rankings after his fund’s move to turn bullish on mining stocks shortly after it began trading in mid-2018.