Stocks Soar After Trump Cancels Threatened Strikes on Iran

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Alex Ossola (0:33)

President Trump has a new nominee for Intelligence Director that could help defuse a fight with Congress.

Plus, Trump calls off threatened attacks on Iran, sending markets soaring. And Citigroup is using the blockchain to make it easier for wealthy clients to trade shares of private companies.

Gina Heeb (0:49)

The pitch that Citi is making is this structure is regulated and so investors know what they're buying.

Alex Ossola (0:55)

It's Thursday, June 11th. I'm Alex Ossola for The Wall Street Journal. This is the PM Edition of What's News, the top headlines and business stories that move the world today.

SpaceX this afternoon disclosed that it has sold the more than 555 million shares in its IPO at $135 a piece, giving it a valuation around $1.77 trillion.

And investors have lined up. The journal has learned that the asset manager BlackRock has put an order to buy at least $5 billion worth of SpaceX shares. Other big investment firms have also submitted eye-popping orders. These companies often buy large stakes and IPOs, but these orders are much bigger than normal. The journal understands that individual investors alone requested over $70 billion worth of SpaceX shares. Investors typically aim big with their orders for an IPO, knowing that they're unlikely to get their full requests when a company is in high demand. The record-breaking offering has now officially raised $75 billion for the company. Elon Musk is now poised to become the world's first trillionaire. And one of Musk's friends and a long-time investor in SpaceX stands to get the second biggest payday.

Antonio Gracia joined the board of SpaceX in 2010 He also served on the Tesla board for 14 years. Gracia and his firm Valor Equity Partners will own 6.7% of SpaceX's Class A shares, a $68 billion stake. Gracia's and Musk's relationship goes beyond business. The two have partied together, the Wall Street Journal has reported, and they have traveled together with their families to Europe, the Caribbean, and Africa. Gracia was also a groomsman at the wedding of Musk's brother.

In other banking news, we're exclusively reporting that Citigroup is establishing a new way for its wealthy and institutional clients to trade shares of private companies. That is, companies that aren't publicly traded. The key part of the system, it runs on a blockchain. The bank said it is in discussions with some of the largest private companies to get involved, and it hopes that other Wall Street banks will also join its venture. Gina Hebe, who covers banks and finance for the journal, says that currently there are limited ways to get access to private companies.

Gina Heeb (3:04)

Investors can use special purpose vehicles or exchange traded funds.

But in those structures, it can sometimes be a little bit less clear what you're actually owning, and they can come with fees. This structure is regulated. It works through something called a depository receipt, which are essentially securities that allow investors to buy stakes in foreign companies. These are authorized by the companies, and so investors know what they're buying, and they know the ownership that's coming with that.

Alex Ossola (3:33)

Gina says that Citi says that this is also beneficial for the companies involved.

Gina Heeb (3:38)

The pitch that Citi is making to companies is that this is going to open up a whole new world of foreign investment. Eventually, they hope to expand to US investors as well. This is supposed to help companies raise money from abroad.

Alex Ossola (3:52)

For seniors, which Medicare plan they choose may have a major impact on whether they can get nursing home care when they need it. A new federal investigation shows that Medicare insurers varied a lot in how often they rejected requests for patients seeking nursing home stays, as well as for long-term care hospitals and inpatient rehab facilities. The Medicare insurers with the biggest enrollments, United Health Group, Aetna and Humana, were among the most likely to initially refuse access. For these companies, denial rates were around 13% for nursing home care. For long-term care hospitals, initial rejection rates were as high as 80%.

Today, the European Central Bank raised interest rates for the first time in almost three years, lifting its key rate to 2.25% from 2%. The decision makes the ECB the first major central bank to tighten monetary policy in response to the jump in energy prices caused by the war in Iran. Markets widely expected this move, and investors are betting the ECB will raise rates at least once more this year. Inflation remains a major issue for the Federal Reserve as well. The latest data point, prices charged by American producers went up again in May, rising 1.1%. That was more than analysts expected. The Producer Price Index, or PPI, is used to help calculate another inflation metric, the Personal Consumption Expenditure Price Index, that's the Fed's official gauge.