World Markets Live - April 25 - CNBC Live Events

CNBC Live Events

World Markets Live - April 25

We’ll be updating you throughout the day with essential breaking news, data alerts, earnings reports and all the major market movements.

    Welcome to World Markets Live. We'll begin full blog coverage for Tuesday from 0600 BST.
    For now, here are the opening calls for European markets.
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    These are the top headlines this morning.
    • The French market closes out its best day since 2012 and the relief rally helps the Nasdaq to a record high amid broad U.S. gains as investors welcome the results of the French election. 
    • Marine Le Pen takes a leave of absence from the National Front, stepping down as party leader to run as an independent Presidential candidate, backed by the far-right party. 
    • North Korea reportedly stages a huge military drill as a nuclear-armed U.S submarine docks in South Korea as the stand-off with Pyongyang intensifies. 
    • U.S. President Donald Trump could delay the payment for his border wall with Mexico as a White House source tells NBC there are concerns it could spark a government shutdown by the end of this week. 
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    Triple-digit gains for the Dow and the Nasdaq hit a fresh record high in U.S. market trade yesterday. The market's favoured result in the French presidential election raised risk-on sentiment and boosted equities.
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    Novartis reports Q1 core net income of $2.69 billion, versus poll expectations of $2.668 billion.
    Sales came to $11.5 billion during the quarter, versus expectations of $11.6 billion.
    The company confirms its 2017 outlook.
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    French Presidential finalist Marine Le Pen said that she is "taking a leave of absence" from her role as the leader of the National Front Party, in an attempt to broaden her appeal before the next round of voting.  
    Speaking on French public television, Le Pen described herself as "no longer the president of the National Front, but a presidential candidate."  
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    The ECB's Ewald Nowotny says uncertainties over future U.S. measures are worrying.
    The U.S. economy could be without orientations for a while, he said in an interview with Der Standard, Reuters reports.
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    Bank stocks led market gains yesterday, as equities rallied on the results of the French presidential election.
    The French CAC logged its best day since 2012, while the U.K.'s FTSE and German DAX enjoyed their best day since 2016.
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    The ECB's Ewald Nowotny, in an interview with Der Standard, says that if the U.S. expands its deficit to boost growth, this could could lead to higher long-term interest rates in Europe, Reuters reports.
    On the topic of Brexit, he says EU financial institutions wanting to operate in the EU must have a seat and supervision in the EU. He adds that he fears Brexit problems have been underestimated and many negative surprises could arise, Reuters reports.
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    Former ECB President Jean-Claude Trichet expressed confidence that Macron will come out on top in the second round of voting, telling CNBC Emmanuel Macron represents the views of the majority of the French people.

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    CNBC's Claire Fournier reports from France on the latest news concerning the presidential election race between Marine Le Pen and Emmanuel Macron.
    There is still a second round to win, even though polls are saying he will defeat her 60 percent to 40. That means that Marine Le Pen will double her score from the first round and double her father’s scores in 2002.
    There is a lot of danger, and what will the other voters do? The Fillon and Melenchon voters, will they go to Le Pen or to Macron?
    The current president, François Hollande, threw his support behind Macron with a message on the social media platform Twitter.
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    A number of European leaders have weighed in to support first-round victor Emmanuel Macron. Speaking to CNBC, Italian Finance Minister Pier Carlo Padoan said he believes Macron is the best candidate.

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    CNBC’s Steve Sedgwick weighs into Marine Le Pen’s decision to temporarily step aside as leader of the National Front.
    I haven’t looked into any deep analysis of why she’s now not Marine Le Pen, National Front, she’s Marine Le Pen, presidential candidate, but it seems that she’s treating the electorate like mugs, isn’t she?
    “I’m not actually this person I was yesterday, I’m this person without that label” and she’s trying to say “I’m not that toxic National Front label.” A toxic label that blighted her father’s aspirations and hers previously and her party’s previously. 
    She is the same woman. It’s like Nigel Farage saying I’m not UKIP. He’s UKIP through and through.
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    President Donald Trump could delay the payment for his border wall to much later in the year.
    A White House source has told NBC he could push out the cost of the wall along the border with Mexico to avoid adding to the complications around a potential government shutdown. 
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    The euro enjoyed a bumper day yesterday, rising to around 5 month highs against the U.S. dollar. 
    The single currency is fairly flat against most major currencies this morning.
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    Ericsson reports Q1 sales of 46.4 billion Swedish crowns, versus forecasts of 47.2 billion.
    The company reports an operating income loss of 12.3 billion crowns. Gross margin fell to 13.9 percent, from 33.3 percent previously.
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    The Trump team is looking to make some big plays ahead of marking his first 100 days in office this weekend. NBC's White House correspondent Kristen Welker has more details.

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    Volvo Group reported first quarter profit of 4.8 billion Swedish krona, topping analyst estimates. 

    The company maintained its outlook for for both its European and American markets, but said it saw positive signs of increased order activity in North America.
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    LVMH announces it is regrouping the entire Dior brand within LVMH. The company says it wants to strengthen its fashion and leather goods division via the acquisition of Christian Dior Couture from Christian Dior for an enterprise value of 6.5 billion euros.
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    Randstad has reported first quarter revenues of 5.5 billion euros as gross profit rose by 6.4 percent.
    The Dutch recruitment consultancy said its acquisitions were well on track, adding that the Monster transition was progressing well. It cautioned, however, that M&A activity would be limited this year
    Robert Jan van der Kraats, CFO of Randstad, says the company had a strong last quarter of 2016 and this continues in 2017.
    All regions are contributing. Clearly Europe has accelerated towards the end of last year and this continues into the first quarter of this year.
    He adds that investments in technology are contributing to the growth in the French markets.
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    Robert Jan van der Kraats, CFO of Randstad, discusses the French election and how its outcome could affect the labour market.
    We are not unhappy with the current status of the elections in the French market.
    We are very much dependent on the strength of the French economy overall and it is clear that France needs some improvements and some reforms and that seems to be one of the remaining options now. We feel rather comfortable with what it is happening now in this market.
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    Alitalia workers have rejected a restructuring plan to rescue the company by cutting jobs and salaries. This puts at risk a round of financing planned to keep the Italian flagship carrier solvent.
    Prime Minister Paolo Gentiloni called an emergency meeting to discuss the fate of the carrier after a number of Italian officials said they won't approve a state bailout. The flag carrier, 49 percent owned by Etihad, has been rescued by Italian Governments and private investors several times over the years.
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    Asian stocks are rising on the return of risk-on sentiment following the result of the French presidential election.
    Safe-haven assets such as the yen and gold are under pressure, but a weakening yen is good for Japanese exporters, leading to a boost for the Nikkei.
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    North Korea has reportedly staged a massive live fire-drill to commemorate the 85th anniversary of the founding of its military. This as tensions in the region continue to escalate following the docking of a US submarine in South Korea.
    The show of force comes amid rising fears over Pyongyang's nuclear programme. Seema Mody spoke to South Korea's finance minister and asked him whether regional risks were taking their toll on the country's economy.
    Many people are worrying about this North Korean factor and geopolitical risks there, and yes there is some, but as far as the impact on the economy is concerned I believe these so called political risks have some limited impact.
    He added that North Korean risks have been an ongoing concern for some time and the impacts on the economy have been limited.
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    French eyewear group Essilor reports a Q1 sales rise. Revenue increased by 10 percent to 1.96 billion euros and the company forecasts revenue growth of between 6 and 8 percent.
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    Here are the top headlines for the hour.
    • Seeing the clearer picture. Novartis reports a drop in core income as it battles to revive sales at its eyecare unit Alcon and demand for its heart failure drug remains soft.
    • A restyling at Christian Dior. LVMH and the Arnault family offer to completely take-over the group in a bid to simplify the business.
    • Ericsson promises to continue cost cuts and improve profitability as the Swedish firm posts a wider loss than expected in the first quarter.
    • Cloud gathers pace for SAP as revenues rise in the first quarter, but net profit slips as share-based compensation weighs on earnings.
    Comment ()
    Later this morning, we'll be speaking to the Ericsson CEO after another weak set of results.
    We also have the CEO of Swedbank, Birgitte Bonnesen. After that we speak to the head of Volvo, Martin Lundstedt.
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    Whitbread reports full year pretax profit of £515.4 million. Operating profit for the full year was £552.7 million.Underling full year profit rose 5.3 percent.
    Total revenue was £3.106 billion, versus £2.921 billion last year.
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    More earnings this morning.
    Puma raised its outlook for the full year to low double digit growth in revenue. The company expects full year EBIT of between 185 million euros and 200 million euros.
    Q1 sales at Puma increased by 15 percent to 1.005 billion euros. Net earnings improved 92.2 percent to 49.6 million euros, from 25.8 million last year.
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    Swedbank has beaten first quarter net profit forecasts, supported by solid domestic spending and a recovery in Swedish exports. Loan loss fell on the quarter, coming in below estimates at 339 million Swedish krone. 
    Birgitte Bonnesen, CEO of Swedbank, says the bank has a policy of creating a large capital buffer to absorb volatility.
    It’s both on pension debt, but it’s also not to worry about new regulations coming in. We don’t know where we’ll end up with Basel IV yet and there are other things moving out there. We want to be prepared and this is what it’s for, and then of course to lend more.
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    Andrew Sentance, senior economic adviser at PWC, discusses the problems facing banks
    The big picture is we’re now 10 years on from the first tremors of the financial crisis in the summer of 2007, so you’d of expected banks to repair their balance sheets by now and you’re observing that. What hasn’t happened to normalize affairs is interest rates.
    Interest rates are still at the sort of emergency levels we came out of the financial crisis in and I do think this is something central banks need to address over the next few years.
    Yes, growth may be slowing in some economies, but actually growth in Europe in general is doing okay.
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    The Trump administration has invited all 100 U.S. senators to a briefing at the White House on Wednesday to discuss the situation in North Korea. 
    The briefing will be given by Secretary of State Rex Tillerson, Secretary of Defense Jim Mattis, Director of
    National Intelligence Dan Coats and General Joseph Dunford, chairman of the Joint Chiefs of Staff.
    Congressional aides suggested the briefing was being held at the White House to underscore the message to North Korea that Washington is serious about wanting a change to the status quo, Reuters reports.
    Meanwhile, North Korea has reportedly staged a massive live fire-drill to commemorate the 85th anniversary of the founding of its military.
    This as tensions in the region continue to escalate following the docking of a U.S. submarine in South Korea. The show of force comes amid rising fears over Pyongyang's nuclear programme.
    by luke.graham edited by Spriha Srivastava 4/25/2017 6:29:41 AM
    Comment ()
    Labour's Jeremy Corbyn hit the campaign trail in Scotland yesterday ahead of June's snap general election. Addressing the Scottish Trade Union Congress, the leader of the opposition said the election would be about QUOTE "the people versus the powerful."
    He urged Scotland to reject the "vicious Tories who are too busy fighting Europe" and the SNP who he says are obsessed with severing ties to Westminster.
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    Shares in U.K. companies Centrica and SSE closed sharply lower in yesterday's trade after Britain's Conservative party revealed it would cap energy prices if it was re-elected in June's vote. 
    Speaking to BBC radio, defence secretary Michael Fallon said they hadn't seen the competition they were hoping for, adding it was right to protect people against arbitrary price rises.
    Centrica CEO Iain Cohn hit back at the proposal saying it would stifle innovation and impact customer service.
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    Deepa Venkateswaran, analyst at Bernstein, says the Conservative proposal for a cap on energy prices
    If you looked at the industry profitability last year, it was around £1 billion. The impact of the cap is around £1.7 billion, so clearly the industry can’t perpetually be running at a loss. The industry will have to readjust.
    So, the first thing they’ll do is move away from making losses on fixed price tariffs, which have generally been the acquisition tariff. They’ve been happy to make a loss on those, so that will change.
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    Speaking yesterday, SNP leader Nicola Sturgeon warned against a rightward drift in UK politics. Sturgeon added that Prime Minister Theresa May called the vote in a bid to strengthen her grip on power before an investigation over election expenses fraud catches up with her party.

    Comment ()
    European markets set to continue with yesterday's rally, with future values predicting a higher open for stocks this morning.
    The CAC 40 enjoyed its best day since 2012 and touched 9-year highs during yesterday's session following the results of the French presidential election.
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    French industrial confidence rises to 108 in April from 105 in March, beating forecasts of 104, according to INSEE.
    April service sector confidence fell to 103 from 104 in March, while composite business confidence remained stable at 104, same as the month before.
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    Antoine Lesne, head of SPDR ETFs strategy & research EMEA at State Street Global Advisors, reveals which sectors to watch in French markets following the election results.
    The sectors that we watched yesterday were financials and consumer discretionary. On the side was technology. I think financials had a relief rally based on the removal of the Frexit risk, at least for now and obviously as Mr Macron was reminded this morning this is not won yet. The polls are still positive, but you have to win the election before you go there.
    He says financials and banks are strong picks for a Macron win. State Street expects a great deal of risk-on trades following the result of the French election.
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    European markets are now open, moving gradually to the upside. Markets enjoyed a strong rally yesterday, with the pan-European Stoxx 600 gaining 2.11 percent, on the result of the first round of the French presidential election. 
    Comment ()
    Ericsson posted a bigger than expected first quarter loss of 12.3 Swedish kroner, with writedowns and restructuring costs dragging earnings into the red.
    The Swedish mobile telecom equipment maker's sales also missed estimates. The company said it was taking a "more prudent approach" in assessing its risk exposures given the current market environment. 
    Shares are down 2 percent on the results.
    CNBC will be speaking to the company's CEO about the results at 11:20 CET.
    Comment ()
    Stephen Macklow-Smith, head of Europe equity strategy at JP Morgan Asset Management, explains his positive bias towards European corporates.
    At the back end of last year we were saying that after six or seven years of Europe being pretty much in the tank and earnings going nowhere, our sense was that this was a year in which we’d start to see earnings growth, real growth in the economy and inflation starting to pick up again.
    That translates into nominal growth, which gives you a kicker on earnings and we thought valuations at the end of last year were attractive. The issue was political risk.
    Macklow-Smith says the market saw the risk of a populist party getting into power, but this risk is now less likely following the weekend’s results of the first round of the French presidential election.
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    Andrew Sentance, senior economic adviser at PWC, pours cold water on some of the confidence stemming from the French presidential election.
    How confident can we be though that Macron will deliver economic reform in France? All his predecessors for the last 30 years have ducked the issue. He won’t have a strong position in the French parliament. He doesn’t have a party he can rally behind him and he comes from the left-ish side of politics. 
    People are putting a lot of hope on him and I can understand that and he’s not Le Pen, so that’s good, but in terms of his ability to drive through reform in France it seems he’s going to face the same obstacles as his predecessors.
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    Volvo shares pop 6 percent higher in early trade on Tuesday.
    Volvo Group reported first quarter profit of 4.8 billion Swedish Kroner, topping analyst estimates. The company maintained its outlook for both its European and American markets, but said it saw positive signs of increased order activity in North America.
    Comment ()
    Whitbread, the owner of coffee-chain Costa reported full-year 2016 revenues of £3.1 billion, compared to £2.9 billion a year prior.
    Costa opened 255 new locations across the year. The company, which also runs Premier Hotels, said it expected consumer confidence to dip in the year ahead. 
    Shares are falling sharply today, dropping more than 5 percent.
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