¶ Intro / Opening
Good morning from the Financial Times. Today is Friday, June 12th, and this is your FT News briefing. SpaceX's blockbuster IPO debuts today, and interest rates are back up in the Eurozone. Plus, there might be some empty seats at the World Cup.
The real fans are the fans that really can't get in because of the ticket prices. For the ticket prices now for the people who have money.
I'm Mark Filipino and here's the news you need to start your day.
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¶ SpaceX's Blockbuster IPO Debut
Today is the big day. Elon Musk's SpaceX is going public, and here are the three numbers you need to know. The rockets/AI company raised$75 billion. The group is releasing 555.6 million shares, and here's the big one they'll be worth$135 apiece. SpaceX plans to pour the capital into projects ranging from AI infrastructure to new satellite constellations.
Now, to put this all into context, Alibaba had the most valuable IPO prior to this one. It went public in 2014, and shares were worth almost$86 in today's money. Compare that with the$135 share price for SpaceX. The listing comes during a volatile week for US markets and other blockbuster IPOs are gearing up too. Anthropic and OpenAI are all racing to go public.
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¶ ECB Raises Rates Amid Inflation
The European Central Bank raised interest rates yesterday for the first time since 2023. It was just a quarter percentage point, and it brings interest rates back to the level from a year ago. But it's big news.
Mr President, the war in the Middle East is generating inflation pressures, and the decision to raise rates is mapping out how the shock might evolve. and affect the medium term outlook for the euro area.
That was ECB President Christine Lagarde yesterday. A lot of people were watching her words carefully. The ECB is the first central bank in the G7 to increase borrowing costs since the war in Iran began. Chris Giles is the FT's economics commentator. He writes our weekly newsletter on central banks, and he's here to give us some broader context. Hey Chris. So guys, let's start with the why. Why did the ECB say it's raising rate?
Well it's all to do with energy prices. Energy prices have pushed up both Headline inflation across the Eurozone. But most importantly, there's been a broadening of inflation. So that goes into food, into restaurants, all of that sort of stuff. Those prices have been rising as well. So the E C B said that however they did the forecasts, they needed an interest rate rise to ensure that they got inflation back to their two percent target in two years or so.
Is this the beginning of a tightening cycle, do you think?
I think we don't know yet. Where the European Central Bank is right at the moment is that it is likely they will raise again because their forecast they produce were consistent with two rate rises. So we're expecting another rate rise sometime this year. They didn't want to do anything forceful and do a half point in one go because
They're not entirely sure that is going to be necessary, the second rate rise. They think it's likely. And so if they did it all in one go, they'd be sort of assuming that this crisis was going to go on a long time and was going to make inflation a lot worse.
Chris, the timing of the E C B meeting is interesting in the sense that we have three other major central banks meeting next week. We have the Federal Reserve, we have the Bank of Japan, and we have the Bank of England. Is the expectation that these other central banks are gonna raise rates too?
No, the expectation's quite different. The Fed is Almost certain, ninety-nine percent certain, not to raise interest rate, to leave him at three and a half to three and three quarter percent next week. It's the first meeting of Kevin Walsh, the new Fed chair. He's coming in having wanted to lower interest rate.
Well why can the Fed sit tight while the ECB is raised? Well, Fed's starting point is different and the Fed was starting at a level of interest rates that was mildly restrictive, whereas the ECB was roughly neutral. So they were in a different position and I think that explains why both central banks can have the same assessment of the economy and their various economies while doing a slightly different thing.
The Bank of England's in a very similar position to the Fed and it's very unlikely to raise rates also next week. The Bank of Japan rather differently are coming from the opposite side, so They have still a stimulative monetary policy and so it's almost certain that they do raise interest rates from three quarters of one percent to the round number of one percent next week.
because they are using essentially the war in Iran to get their interest rates closer to normal and to damp down on inflation.
Chris, I want to end on gold because there is an expectation that the Fed will raise interest rates at some point this year. That's putting pressure on gold, which has hit a six month low this week. Could we see more pressure on precious metals if central banks commit to these tightening cycles?
I think we could see more pressure on any sort of non remunerated asset, so asset which doesn't have an interest rate.
like gold or Bitcoin, which has also uh been struggling recently. Really tough. When you have central banks raising interest rates, but so that if you have money in cash you're gonna get a better return and people think, well that's maybe Well, it's certainly safer, but also uh you you get a decent return if you keep your money in cash rather than having it in a much more speculative asset that also doesn't pay any interest.
Chris Jouse is the FT's economics commentator. Thanks, Chris.
Thanks, Mark.
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¶ World Cup Ticket Price Controversy
The World Cup kicked off yesterday, but some stadiums might be emptier than you'd expect. That's because the ticket prices are a bit bonkers. MetLife Stadium in New Jersey is right outside New York City and it's hosting a few of the games, so our producer Sophia Ethmed hit the streets of New York to ask people about these crazy expensive tickets.
How much would you be willing to pay to attend a World Cup match?
I would say I'm $200.
The most would have to be like five hundred, six hundred if I'm being real.
If it were a really really big game I'd consider paying 800.
I can safely say that World Cup tickets are going for a lot more than that. Just so you can get a sense of the prices. The early stage game that I'm most excited for is tomorrow. It's Brazil playing Morocco. And the cheapest tickets I could find online are going for about$2,000. Here's how the people I spoke to would rather spend that amount of money in a city that's as expensive as New York.
I'm rent is kind of like that's like a month of rent for most people.
Paying 50% of daycare for my son.
Uh can buy me a lot of groceries, one thing's.
Ha ha ha.
And that's for an early stage game. Don't even get me started on the prices for the final. We don't even know who will be playing in it yet, and somehow the cheapest tickets right now start around$4,000. And they go as high as almost nine thousand.
Even if it was like a game or matchup that I really cared about, I couldn't think about paying that much.
It's outrageous. I mean the real fans are the fans that really can't get in because of the ticket prices. You know, the ticket prices now for the people who have money.
It's kinda disappointing how like resellers kinda kill the fan experience in a way.
I wanted to know more about why this year's World Cup is just so expensive. So I'm joined now by the FT's Chris Cook. He's been reporting on this for us. So how expensive are tickets this year relative to past World Cup?
So the short answer is that this World Cup is the most expensive World Cup ever. So group stage tickets are up to about three times the price of those for the last World Cup held in Qatar in twenty twenty two. Some of the prices, if you're uh like a European football fan that are being quoted are absolutely wild. I am delighted to say that I'm a season ticket holder at Crystal Palace, the sort of mid size
Premier League team and it cost me about a thousand dollars a year to have a season ticket. That's nineteen games across the whole season. That's roughly how much it would cost at the moment to get a ticket to see uh the USA versus Paraguay. a rather under subscribed game happening in Los Angeles.
Wow, with how high these ticket prices are, are any tickets selling?
Yeah, so the way that FIFA released the tickets is actually another thing that's slightly baffling. So FIFA allowed people to buy up to forty tickets. amass quite a big box office of your own and then it allowed them to resell them at basically whatever price they wanted. So one of the slightly odd things about this tournament is at the beginning of this week they're about at a hundred and eighty thousand tickets to the group games.
Which were available from people who clearly bought those tickets with the intention of reselling them at a profit. But um one of the things that's been happening over the last week is those resellers have managed to shift a load of those tickets by massively slashing their prices. That means that a load of those people are losing money on their ticket scalping.
So there could be over a hundred thousand potentially empty seats if those tickets don't sell. And this is all coming at the same time as a pretty severe affordability crisis in the US, too. What has the reaction from local politicians been like?
So the first politician to really put the FIFA prices on the agenda in the US was Zaron Mamdani, the recently elected mayor of New York, who campaigned against FIFA's pricing.
What this all means is the biggest sporting event in the world is happening in your backyard and you'll be priced out of it. That's why I'm calling all soccer fans to demand FIFA and dynamic pricing. Let's call this price gouging what it is.
But that's actually really been put in the shade recently by the New York Attorney General, Letitia James. and the New Jersey Attorney General Jennifer Davenport, who have begun an investigation into FIFA, into whether they've misled fans and whether they were trying to do something that was going to lead to soaring prices. So there's a possibility that this will turn into yet another FIFA financial scandal.
And what does FIFA have to say about all of the ticket scalping or touting?
So FIFA's been very unapologetic about Gianni Infantino, the FIFA president yesterday, basically said, Look, starting the prices very, very high means that the money goes into football. That's you know, the money that FIFA says it uses for developing football. But it's worth pointing out, by the way, that when you go to a big European football tournament
There are very strict touting controls. And in fact, Toronto in this tournament has very strict anti-touting controls. So if you look on the FIFA resale website for the Toronto games, you'll see there are almost no tickets. And that's because you're not allowed to sell the Toronto tickets for above face value, which means basically the only people who buy tickets are people who want to go to the game.
Maybe it's time to go to Toronto. Chris Cook is the FT's Enterprise Editor. Thanks so much, Chris.
Thanks for having me.
You can read more on all these stories for free when you click the links in our show notes. This has been your daily FT News Briefing. Check back next week for the latest business news. The FT News briefing was produced this week by Sophia Ahmed. Sonia Hudson, Katia Kunkova, Fiona Simon, and Victoria Craig. I'm your editor, Mark Filipino. Our show is mixed by Alex Higgins and Kelly Gary. We had helped this week from Peter Barber, Michael Lelo, David DeSilva, and Gavin Coleman.
Our intern is Cole Van Miltenberg, our executive producer is Topher Forges, Flo Phillips is the FT's global head of audio, and our theme song is by Metaphor Music.
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