CAC 40

Introduction: Ankara Could Change Everything

Tuesday. European defense stocks are frozen in anticipation. Investors are looking at the map and focusing on Ankara — the Turkish capital, where this week’s NATO summit will take place. The two-day event could become the very catalyst Europe’s defense sector has been waiting for.

Goldman Sachs’ basket of European defense stocks has already recovered 17% from its June low, reaching its highest level in more than a month. But this may only be the beginning. If the summit meets expectations, we could see a real rally. If not, the rebound may prove temporary.

What are investors expecting? First of all, clear signals about the future funding of national armies. Donald Trump, who will attend the summit, is likely to increase pressure on European allies, demanding that they raise defense spending to 5% of GDP. This demand, which once seemed unrealistic, may now become reality.

The escalation of the conflict between Russia and Ukraine adds urgency to the issue. The shortage of air defense systems in Kyiv’s arsenal is becoming increasingly obvious, and Ukrainian leader Volodymyr Zelensky is likely to use the summit to call on Western allies for additional weapons supplies.

Morgan Stanley analysts have already called the summit a “key catalyst for European defense.” They expect stronger EU commitments and a repeat of U.S. calls, which would strengthen market confidence in a multi-year cycle and provide an attractive entry point.

Defense stocks have lagged the market this year, gaining only 3.4% amid doubts over how much of the promised spending will actually materialize. The Stoxx 600 index, meanwhile, has risen nearly 10%. But after the summit, the situation could change.

Let’s take a closer look at what is really happening in Europe’s defense sector, what to expect from the NATO summit, and which...

KEY EVENT: ECB Rate Decision — June 11  |  25bp Hike 90% Priced  |  ECB Deposit Rate 2.00%  |  Euro CPI 3.2% (May, highest since late 2023)

EUR/USD 1.1638  ·  EUR/GBP 0.8644  ·  Lead $2,014.51/T  ·  Corn 420.56¢/bu  ·  CAC 40 8,278.1  ·  AstraZeneca £13,150  ·  EU 20Y 3.48%  ·  USDT $1.0001  ·  BNB/USD $594.5

Session Overview — European Markets

Friday's European session opens with an unusual and defining tension: the euro is firming ahead of a rate hike that is already almost fully priced — a reminder that in modern markets, anticipation can both deliver and disappoint. With the European Central Bank's June 11 decision six days away and May eurozone inflation confirmed at 3.2%, the question is no longer whether the ECB will hike, but how hawkish the guidance will be and what comes next.

The macro backdrop is dense. Eurozone inflation rose to 3.2% in May — its highest reading since late 2023, with core at 2.5% and services inflation surging to 3.5%. These data points have pushed money markets to price a near-certain 25 basis-point hike at the June 11 meeting, lifting the ECB deposit rate from 2.00% to 2.25%, with a second hike priced for September and a third increasingly likely before year-end. ECB Governing Council member Isabel Schnabel on Monday added a hawkish note: it is too early to determine the exact number of rate hikes — a deliberate signal that the ECB is not inclined to front-run market guidance. Bank of Italy Governor Fabio Panetta was equally pointed: the forward-looking picture calls for a recalibration to counter the risk of persistent inflationary tensions.

Beneath the ECB narrative, the geopolitical picture remains the dominant risk overlay. Iran hostilities continue to disrupt oil supply chains and push energy-driven inflation across Europe. A conditional Lebanon...

Hi, this is NorthRay.🆕

Remember when I told you I wanted to buy Apple but couldn't because the market was closed?

Then I opened a trade on the SPX (the S&P 500 index). It closed with a small profit.

And that got me hooked.

Because there's something almost magical about indices. You buy one thing—and instantly get exposure to hundreds of companies. You don't have to guess whether Apple will soar or Tesla will fall. You're simply betting on the entire U.S. economy.

Spoiler: I liked it.

Today I'll explain what indices are, how they work, and why I now watch them almost as often as EUR/USD.

What Is an Index? (The Simple Explanation)

An index is a basket of stocks.

Instead of buying 500 individual stocks, you buy one instrument—the index—and it moves according to the average performance of the companies inside it.

Here's a simple analogy:

Imagine you're a teacher. You don't need to know how every student performed on an exam. You only need to know the class average.

If the average score is high, the class did well. If it's low, the class struggled.

An index is basically the average score of a group of companies.

Some companies inside the index may be rising while others are falling. The index shows the overall result.📉

The Most Important Indices in the World

There aren't that many. I learned five of them, and that's enough to get started.

Why Indices Are More Convenient Than Individual Stocks

I've traded both individual stocks (Apple) and indices (S&P 500). Here's what I've learned.

1. Less Stress

A single company can drop 10–20% because of one bad news story: a management scandal, a failed product launch, or a lawsuit.

An index made up of 500 companies is less likely to suffer such...