World Markets Live - August 11 - CNBC Live Events
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CNBC Live Events

World Markets Live - August 11

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

  • Good morning and welcome to World Markets Live.
     
    We are going to take you through the major breaking live blog, CNBC, business news, real time events this Friday until after the stock market closes in Europe.
     
    Our headlines as we get underway:
     
    • U.S. President Donald Trump doubles down on his North Korean rhetoric saying his 'fire and fury' comments were not tough enough
     
    • Equities in Asia also fall after the major U.S. indices post one of their worst days of 2017, as geopolitical uncertainty grips investors 
     
    • Investors continue to move money into "safe assets" as famed investor Ray Dalio recommends a higher gold allocation amid rising geopolitical tensions.
     
    • Shares in Snap and Blue Apron take a tumble in after-hours trade as both newly public companies report a miss in their latest numbers
  • President Trump has issued a fresh round of warnings to the North Korean regime.
     
    He said Pyongyang should be 'very, very nervous' about taking any action to provoke America. The remarks were delivered during the closest thing to a fully-fledged presidential news conference the White House has hosted in months.
     
    Stocks in the United States fell the most since May on Thursday as tensions between the United States and North Korea persisted.
    • The Dow fell 204.69 points to close at 21,844.01, with Goldman Sachs contributing the most losses. That was its biggest point loss since May 17.
    • The S&P 500 declined 1.45 percent to end at 2,438.21, with information technology and financials leading the way lower.
    • The Nasdaq even worse, pulling back 2.13 percent to 6,216.87, with Apple, Alphabet, Amazon and Netflix all trading lower.
    Asian equities sold off steeply in session with the South Korean Kospi hitting an 11-week low. Here's how the Asian markets closed:
     
     
    It should be noted that the Japanese Nikkei was closed for a holiday today.
     
    Reuters is reporting that one Chinese newspaper, viewed as state media, is suggesting that China should remain neutral if North Korea fires first on U.S. territory. That seen as a warning to Pyongyang.
  • Innogy has reported first half EBITDA of 2.44 billion euros versus a consensus forecast of 2.46 billion . The firm has maintained full year guidance.
     
     
    Innogy is 77 percent owned by RWE and is Germany's largest energy firm.
     
    Tune in to the TV channel at 9.50 a.m. London time (10:50 CET) for our interview with Innogy CEO Peter Terium.
     
     
  • Ray Dalio, manager of the world's largest hedge fund, has said to buy gold on the rising risk created by North Korea.
     
    In a post online, the Bridgewater Associates founder, who manages about 160 billion dollars, said the rising uncertainty means at least 5 to 10 percent of your portfolio should be in the yellow metal.
     
    Dalio also cited possible problems the U.S. congress will have with raising the debt ceiling later this year.
     
    Gold is getting back up to June prices.
     
    Gold prices have edged up to touch their highest in over two months and are set for a fourth consecutive day of gains.
  • Steve plucks this tweet out from the big bucket of social media to highlight the impact of the appointment of White House Chief of Staff John Kelly.
     
    He was meant to bring a new discipline to the White House right?
  • European stocks are seen opening sharply lower on Friday morning as geopolitical tensions over North Korea intensify.
     
    The FTSE 100 is expected to open lower by 36 points at 7353; the DAX is seen down by 68 points at 11,934 and the CAC is set to start 30 points lower at 5,077.
     
    So far this week, investors have rather reversed the recent affection for European stocks.
     
     
  • The price of oil fell after OPEC's latest monthly report showed that output had jumped in July. While still high by OPEC standards, compliance among the 14 country cartel fell 10 percent. Despite this, the group remains bullish and forecasts higher demand for crude in 2018. 
     
    This print was taken at 06:36 a.m. London time.
     
    On set Paul Hickin, Associate Editorial Director of S&P Global Platts says OPEC is hoping that a predicted stringer demand will absorb current and forecast levels of production.
     
    He says demand is forecast by both OPEC and the IEA to hit record levels in 2018.
     
    The oil analyst says there is much current effort to keep the OPEC supply cap deal together. Hickin adds that both Russia and Saudi Arabia view Iraq as the shaky country that could threaten the entire deal.
     
    In normal circumstances, Hickin argues that would be tolerated but the problem has been intensified by Libya and Nigeria adding a lot of extra supply to the market.
     
    Paul Hickin, Associate Editorial Director, S&P Global Platts
     
  • A reminder of our headlines at this hour:
     
    • U.S. President Donald Trump doubles down on his North Korean rhetoric saying his 'fire and fury' comments were not tough enough
     
    • Equities in Asia also fall after the major U.S. indices post one of their worst days of 2017, as geopolitical uncertainty grips investors 
     
    • Investors continue to move money into "safe assets" as famed investor Ray Dalio recommends a higher gold allocation amid rising geopolitical tensions.
     
    • Shares in Snap and Blue Apron take a tumble in after-hours trade as both newly public companies report a miss in their latest numbers
  • The final German inflation reading for July has come in at +0.4 percent month on month and +1.7 percent year on year. That matches the flash reading.
  • Geoffrey Yu, Head of the U.K. Investment Office at UBS Wealth Management is our guest host today. He says European Central Bank President, Mario Draghi, is struggling to generate inflation across Europe and that will only get worse if the euro remains at its current elevated level.
     
    By September when the forecasts come out, if the euro is still here then I think he has a problem.
    Yu says the Draghi speech at Jackson Hole in less than three weeks time is the next big event for European policy watchers.
     
    This print was taken at 07:13 a.m. London time.
     
    UBS's Yu says the pace of the recent rise in the euro reflects the lack of positioning that the market had taken on the currency.
     
    Yu argues that the market needs direction for data for any correction. He says wage growth and PPI data are particularly crucial to the outlook for investors.
     
    Geoffrey Yu, Head of the U.K. Investment Office at UBS Wealth Management
     
  • European futures are suggesting a negative open for the main bourses in a little over 30 minutes.
     
     
  • The Premier League returns this weekend, with England's top flight football competition buoyed by a three-year, multi-billion pound television rights deal.
     
    But the agreement is reportedly under pressure from tech giants like Amazon and Facebook looking to bid for broadcast rights. 
     
    Barclays Premier League match between Manchester City and Hull City at the Etihad Stadium on August 31, 2013 in Manchester, England.
     
    Guy Peddy, Head of European Telecom Research at Macquarie is on set and he says if "Big Tech" enters the broadcasting space it will push them into a world of regulation that they are not used to.
     
    He says the biggest issue at the moment is the development of networks to facilitate over-the-top content (OTT). Improved networks would allow technology companies to broadcast high data volume content, such as popular sport, over the internet.
  • Novozymes reports a second quarter expectations miss with Q2 EBIT of 963 million Danish krona. Net profit was 35 million on sales of 3.54 billion krona. The company maintains its underlying EBIT growth outlook.
     
    Peder Holk Nielsen, CEO of Novozymes, says the company had a good first half and beat its own expectations. He says growth rates are likely to pick up.
     
    There’s a lot of good momentum in the business, particularly in our food and beverage business and our bioenergy business is doing very well.
     
     
     
  • French July CPI inflation fell 0.3 percent on the month. Year on year inflation is up 0.7 percent.
     
    Private sector payrolls rose 0.5 percent in Q2 and 91,700 net new jobs were created, according to INSEE.
     
  • According to Reuters, an adviser to Turkish President Recep Erdogan has said that Turkish banks are paying too much tax and that needs to be fixed.
  •  
    And as predicted, stock investors have taken back some cash back out of European stocks this morning.
     
     
  • Spain's CPI inflation rate for July comes in at 1.5 percent year on year and -0.7 percent month on month, according to INE. These matched forecasts.
     
    Also, the Danish unemployment rate for June was 3.5 percent, according to the country;s statistics office.
  •  
    Even if you are invested in the best performing European sectors this morning, you may well still be losing money. Unless you are short of course!
     
     
     
  • European stocks are sharply lower this morning as geopolitical tensions over North Korea intensify. European stocks are following on from Asia and the United States.
     
     
    The FTSE 100 in the United kingdom in particularly bad shape. That a reflection of the heavy influence of Basic Resources on the index.
     
    As you can see below, Basic Resource stocks are averaging around 3 percent lower this morning and are the worst performing sector.
  • Stephen Macklow-Smith, head of European equity strategy at J.P Morgan Asset Management, says the market has been digesting a powerful movement in the bond markets.
     
    We’ve had a change in the environment in the first six months where yield curves ceased to steepen and started to flatten.
     
    From a valuation point of view, we’re not concerned. Particularly relative to bonds, European equities look fine. The earnings story is good. Companies are not being rewarded for posting good earnings in the second quarter and that’s true in the states and Europe, but as long as the direction of economic travel remains positive, we don’t see much reason to be concerned.
     
     
     
  • Old Mutual has reported a first half profit rise of 37 percent, spurred on by weak sterling and good performance in its Old Mutual Wealth division. This as the Anglo-South African financial services firm announced plans to list Old Mutual Wealth and its emerging markets division in London and Johannesburg in 2018.  
     
    The Italian government has reportedly extended a deadline for Telecom Italia to submit a report on its top shareholder Vivendi. According to Reuters, Telecom Italia now has until August 23rd to hand over details of the role Vivendi has in managing the company. Authorities are probing whether the French media group breached rules by failing to declare its effective control of a company considered a strategic national asset. 
     
     
    Allianz subsidary Pimco Income Fund attracted inflows of $2.65 billion dollars in July. It brought the funds total net assets to $92 billion dollars. Pimco's new flagship fund has brought in roughly $23.5 billion dollars in the last 12 months. 
     
    Innogy says it added 50 thousand customers in Britain in the second quarter. But Germany's largest energy group warned it's facing tough competition in the British retail power market, as it tries to revive its troubled local unit, Npower. Innogy says it still expects the unit to report an operating loss in 2017 and reaffirmed its overall group outlook.
  • Morgan Stanley forecasts the euro to rise to $1.25 in Q1 2018, and for sterling to fall past parity with the euro.
     
    Stephen Macklow-Smith, head of European equity strategy at J.P Morgan Asset Management, says the bank is right to be a little concerned about the rising value of the euro.
     
    European companies, in particular German countries, if you think about the history of the last six decades, they’ve been used to living with a permanently rising currency and the way they get around that is they’re always optimizing on cost but also focusing on quality.
     
    The euro is a little lower against major currencies today.
     
     
  •  
     The current snapshot of the biggest moving European stocks are as follows.
     
     
    On the losers Novozymes has cut guidance after second quarter results disappointed.
     
    Exane BNP Paribas has cut Dixons Carphone Warehouse to an underperform rating on concerns over its mobile business.
     
    Dixons has shed around a quarter of its value in 2017.
     
     
  • Stephen Macklow-Smith, head of European equity strategy at J.P Morgan Asset Management, says earnings for the financial sector look promising.
     
    The direction of travel looks favorable. And at the back-end of last year, we thought that the last area of European banking that needed recapitalizing was Italy and that’s now happened. So I think that long drawn out recovery is now well-established.
     
    The banking sector of the Stoxx 600 is down almost a percent today, but over 12 months it is up 46 percent. Over the same period, the Stoxx 600 as a wholeis up just 8.67 percent.
     
     
  • So after 34 minutes of European trade, our headlines look like this:
     
    • European equities follow Asia and the US lower as geopolitical uncertainty around North Korea continues, with U.S. President Donald Trump saying his 'fire and fury' comments were not tough enough.
     
    • Safe haven trades continue their upward trend with famed investor Ray Dalio recommending a higher gold allocation amid the rising tensions.
     
    • Miners lead losses in Europe as talk of higher margin requirements and increased geopolitical tensions weighs on metal prices.
     
    • Novozymes shares sink as second quarter earnings for the biotech firm miss across the board. But, the CEO strikes a bullish tone, telling CNBC growth rates are likely to pick up. 
  • Software development company Luxoft expects lower full-year revenue and EBITDA margin. This despite posting a 17.5 percent increase in quarterly revenues.
     
    Evgeny Fetisov, CFO of Luxoft, says the company is facing some headwinds in its financial services vertical.
     
    If we look at the business, the growth is 55 percent and this is the message we will be giving out to the market. The business is structurally strong. We are growing fast.
     
    Fetisov says they see growth across the board and are fairly optimistic.
     
     
  • Evgeny Fetisov, CFO of Luxoft, says the headwinds facing the financial services sector is cyclical.
     
    If you look at financial services on a broader scale, with these global interest rates, the banks are only left with their commissions as part of their income and some of them are struggling. Without the outlook for higher rates, I believe the financial services will start to fair better in the near term.
  • Shares in Snap fell sharply in after hours, with the company reporting a decrease in its daily active users.
     
     
    Second-quarter revenue was below expectations, adding to fears the social media company could be succumbing to competition from Facebook.
     
    Snapchat uses advertising, like short video clips and augmented reality filters, to make money, so a growing pool of users means there's a growing number of eyeballs that will see those ads. 
  • Fixed Income strategist at Deutsche Bank, Jim Reid, has issued his morning brief and says if we can tear our eyes away from the threat of nuclear war, inflation is where the market is most sensitive.
     
    For the US CPI today, our economists expect core CPI inflation (+0.2% vs. +0.1%) should finally snap its streak of four consecutive monthly misses which could be important. They also remind us that as recent Fed statements have emphasized, policymakers will be monitoring near-term inflation trends closely.
     
    Hence, an in line print would provide tentative evidence that the recent downshift in core inflation may be behind us.
    That data is out at 1:30 p.m. London time.
  • We've been talking about the future of work this week and our next guest is here to talk about how technology is changing the way people commute to work.
     
    Marco Ferreira, head of strategic accounts for connected car at Cisco Jasper, says the connected car could become an extension of our work office or home. He also addressed security concerns around cars connected to the internet.
     
    It is a concern in society, but again keep in mind that everything is regulated. Everything is open; you can check how the government is going to monitor those lines.
     
    I’d rather have that security in place to make sure that law enforcement have the tools they need.
     
     
     
  • These are your headlines for the hour:
     
    • European equities follow Asia and the US lower as geopolitical uncertainty around North Korea continues, with U.S. President Donald Trump saying his 'fire and fury' comments were not tough enough.
    • Safe haven trades continue their upward trend with famed investor Ray Dalio recommending a higher gold allocation amid the rising tensions.
    • Miners lead losses in Europe as talk of higher margin requirements and increased geopolitical tensions weighs on metal prices.
    • Novozymes shares sink as second quarter earnings for the biotech firm miss across the board. But, the CEO strikes a bullish tone, telling CNBC growth rates are likely to pick up.
  • The IEA says the oil market is re-balancing.
     
    It says global oil supply rose in July by 520,000 barrels per day in June and OPEC crude output rose by 230,000 bpd in July to 32.84 million bpd, led by production recovery in Libya. 
     
    Oil prices are lower after the release.
     
     
  • Commenting on the latest oil report, Neil Atkinson, head of the oil industry and markets division at IEA, says Libyan production has risen very strongly in recent months.
     
    But by its nature, because of the political situation in Libya, it’s just as possible that production could go back down again as continue to rise. And in Nigeria, there’s no clear end in sight to the difficulties they’ve had there.
     
     
     
  • Italy's final reading of EU-harmonised inflation fell 1.9 percent month on month to July, and is up 1.2 percent year on year. This matches the preliminary reading.
  • The London fire brigade says it is investigating reports of a fire on a train at Oxford Circus underground station.
     
    Several rail commuters have reported on Twitter they were evacuated from the station and say there was a strong chemical smell.
  • Oxford Circus station is closed following a fire alert, according to the rail service's official Twitter account.
  • President Trump has issued a fresh round of warnings to the North Korean regime. He said Pyongyang should be QUOTE 'very, very nervous' about taking any action to provoke America. The remarks were delivered during the closest thing to a fully-fledged presidential news conference the White House has hosted in months. NBC's Kristen Welker was at the briefing and filed this report.

  • Asia markets are sharply lower today on continued concerns about the geopolitical concerns. The Shanghai Composite finished the week down 1.6 percent.
     
     
  • Oil has hit session lows after the latest IEA report warned the OPEC compliance rate with production cuts has dropped to 75 percent. Output by OPEC producers rose to 32.84 million barrels per day.
     
     
  • Gold prices are steady near two-month highs as tensions between the U.S. and North Korea lends support to the precious metal.
     
    Investors are seeking the commodity as a safe haven. Ray Dalio, manager of the world's largest hedge fund, has said to buy gold on the rising risk created by North Korea.

    In a post online, the Bridgewater Associates founder, who manages about $160 billion, said the rising uncertainty means at least 5 to 10 percent of your portfolio should be in the yellow metal.

    Dalio also cited possible problems the U.S. congress will have with raising the debt ceiling later this year.
     
     
  • Here are the top headlines today:
     
    • European equities follow Asia and the US lower as geopolitical uncertainty around North Korea continues, with U.S. President Donald Trump saying his 'fire and fury' comments were not tough enough.
    • Safe haven trades continue their upward trend with famed investor Ray Dalio recommending a higher gold allocation amid the rising tensions.
    • Miners lead losses in Europe as talk of higher margin requirements and increased geopolitical tensions weighs on metal prices.
  • Hong Kong says Q2 GDP grew 1 percent quarter over quarter.
     
    The territory revises its forecast for full year GDP growth upwards to 3 to 4 percent from 2 to 3 percent previously. Full year headline inflation for 2017 is forecast to rise 1.6 percent.
     
  • Oxford Circus Tube Station has been evacuated due to fire alert. Here's a tweet from the BBC:
     
  • The pan-European Stoxx 600 is down more than 1 percent and has hit a five-month low:
     
     
  • A sell-off in heavyweight basic resources stocks prompted a third day of losses for European shares on Friday, putting them on track for their worst week this year.
     
     
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