World Markets Live - August 31 - CNBC Live Events

CNBC Live Events

World Markets Live - August 31

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

  • Our top headlines as we get the blog underway this morning:
    • Chinese manufacturing beats expectations with surprising growth in August. Revitalized exports and infrastructure spending drive the strong PMI numbers.
    • President Trump hits the road to campaign for a tax overhaul. But there's a lack of specifics, and plenty of opposition in Congress.
    • British Prime Minister Theresa May talks Brexit in Asia, visiting Japan in a bid to establish a new trade relationship for a post-Brexit world.
    • Gasoline futures surge as disruption from Hurricane Harvey prompts supply fears.
  • China's manufacturing PMI beat expectations in August, revealing surprise growth in the sector. Analysts had forecast a slight dip in activity on rising borrowing costs.
    However, services PMI disappointed, cooling to 53.4.
    Shuang Ding, Head of Greater China Economic Research at Standard Chartered, says non-manufacturing accounts for about 60 percent of the Chinese GDP.
    So if we put both indexes (manufacturing and services) together, actually I see a weakening of the real economy.
    Shuang Ding said he is still forecasting 6.8 percent growth for China in 2017, but there will be a slight slowdown in the second half of the year.
    Below is a chart showing quarterly growth in Chinese GDP.
    Source: Official data, Trading Economics
  • 35 people are reported dead and tens of thousands of people displaced after tropical storm Harvey ripped through Houston, Texas. Several people are still missing.
    The rescue effort has continued overnight. The storm has abated but has moved into Louisana
    As the waters started to recede, the clean-up operation has begun across the devastated areas. 
    Moody's Analytics is putting the cost of Harvey at somewhere between $51 and $75 billion.
    Robert Grant and Rocky from the Texas Task Force 2 search and rescue team work through a destroyed apartment complex trying to find anyone that still may be in the apartment complex after Hurricane Harvey passed through on August 27, 2017 in Rockport, Texas.
  • Pernod Ricard has announced a 3.3 percent rise in underlying profit growth for its 2016/2017 full year results.
    The French listed drinks firm recorded fiscal 2017 sales of 9.01 billion euros.
    In comments, Pernod Ricard said the improvement was broad based with better sales in the U.S., China, and Eastern Europe.
    Investors also received a 7 percent dividend hike.
    Pernod Ricard is the world's second biggest spirits group.
    Looking ahead, the drinks maker said it forecasted an underlying profit growth of between 3 and 5 percent in the full year up to the end of June 2018.
  • Theresa May has described the levels of Japanese investment in the UK in the wake of the Brexit vote as a "powerful vote of confidence" in the country.
    She made the comment after taking part in trade talks with her Japanese counterpart Shinzo Abe.
    The British prime minister is visiting Japan as she seeks to strengthen the UK's trading relationship with the world's third largest economy. 
    U.K. Prime Minister Theresa May meets with Japanese Prime Minister Shinzo Abe in Kyoto, Japan.
  • The U.S. dollar has risen after a positive ADP payrolls report for August and a positive Q2 GDP revision in the United States.
    The U.S. economy grew faster than expected in the second quarter, with Commerce Department figures showing gross domestic product increasing at 3 percent in April to June.
    Economists had forecast 2.7 percent. The growth was the best since the first quarter of 2015.
    Print taken at 8:18 a.m. London time.
    Meanwhile, private sector employers hired 237-thousand workers in August, according to payrolls processer ADP.
    The number beat expectations and was the biggest monthly increase in five months.
  • Asian markets are mixed after positive U.S. data gave Wall Street a boost and China's August official manufacturing PMI beat expectations.
    Print taken at 6:45 a.m. London time.
    The dollar has also extended overnight gains.
    China's official manufacturing PMI rose to 51.7 in August, beating the 51.3 forecast in a Reuters poll.
    Meanwhile, the official services PMI for China dropped to 53.4 in August, compared with 54.5 a month earlier.
    The August number was the lowest since May 2016, according to Reuters.
    Meanwhile, U.S. stocks closed higher on Wednesday..

    The S&P 500 gained 0.46 percent to close at 2,457.59, with information technology leading eight sectors higher. The S&P also posted a four-day winning streak, its longest since late May.

    The tech-heavy Nasdaq composite rose 1.05 percent to 6,368.31, leading other major U.S. indexes, and notched a three-day winning streak.
    European markets are expected to begin trade higher on Thursday, as investors looked to upcoming data and news coming out of the political sphere, while cheering on the positive trading seen overseas.

    Looking ahead to major bourses, the U.K.’s FTSE 100 is expected to open 14 points higher at 7,379, while the German DAX is set to start on a positive note, up 38 points at 12,040 and the French CAC up 21 points at 5,077, according to IG. 
  • Gasoline futures have spiked more than 6 percent in session. Over 7 days it is up almost 24 percent.
    Investors are exhibiting nervousness after a crucial supply line to the New York area was closed down due to Hurricane Harvey related flooding.
    Wider processing has been negatively impacted with some estimating as much as 30 percent of U.S. processing is offline.
  • German July retail sales have come in at -1.2 percent month on month.Year on year the figure still marks a +2.7 percent rise.
    Analysts had forecast a fall of -0.4 percent from June to July.
  • Everything outside the U.K. is very good.
    Paul Venables, CFO of the recruitment firm Hays says Europe is in full swing and the company now has 75 percent of its business there.
    The U.K. market is "broadly stable".
    Hays has reported a full year operating profit of £211 million versus £181 million a year ago.
    Hays has roared 30 percent higher over the last 12 months.
  • President Trump has suggested that the time for cooperating with North Korea is over.
    Tweeting one day after Pyongyang fired a ballistic missile over Japan, the president said  "talking is not the answer".
    Kokou Agbo-Bloua, Global Head of Flow Strategy and Solutions at Societe Generale is on air.
    He says investing amid geopolitical uncertainty is tricky for investors, especially in an era of such low volatility.
    Agbo-Bloua says one strategy is to buy volatility on the Kospi.
    Agbo-Bloua says the yen is a favorite trade for risk on/off moves but warns that the "endless QE" of the Japanese government will keep a sturdy cap on the currency.
    He calls gold to potentially rise 5-10 percent from current levels in coming months as long as U.S. yields do not elevate.
  • Top negotiators from Britain and the European Union are set to update the press on this week's latest round of Brexit talks.
    Officials on both sides have exchanged barbs over a lack of progress in negotiations. 
    Brok: Hard Brexit would be a disaster for Britain.
    Elmar Brok is a "Brexit Sherpa" for the European Parliament and is on air with Willem Marx in Brussels.
    He says on the three questions of negotiation; citizens rights, financial obligations and the Irish question, there is not fast enough movement.
    He says there is not even a proposal from the British side to discuss the exit bill that Britain may face.
    Brok says Brexit is dangerous and "expensive for all of us, but more for Britain".
  • French preliminary CPI for August has come in at +0.5 percent month-on-month. It was forecast at +0.6 percent.
    The July producer price number has come in at +0.1 percent month-on-month.
  • Sheila Patel, CEO of Goldman Sachs Asset Management International has joined the team on set.
    She says clients are more confident about Europe after the French election.
    I think what's really key in developed markets is valuations and Europe does seem to have opportunities, particularly when viewed against the United States.
    Patel says she is still more positive about Emerging markets versus developed markets but now is the time to be selective.
    For example, you seen quite a bit of weakness in the China internet sector. People thought maybe that is one area where people had over-committed, but is there still growth there?
    Patel also highlights EM tourism as one are of potential growth.
  • Following from yesterday's positive session we appear to have kicked off in the same vein.
  • The European markets look like this.
    French supermarket Carrefour proving a huge drag on the CAC however, falling more that 12 percent at the open.
    Carrefour cut its full-year sales goal after posting first half operating profit short of analyst expectations, while warning profit could fall up to 12 percent in 2017.
    Weakness in Carrefour's core French market weighed on earnings.
    Several banks, including Jefferies, JPMorgan and Barclays have cut their rating on the stock.
  • German retailer Metro showed a recovery in its sales figures for the third quarter, reporting earnings of 215 million euros. The company maintained its mid-term guidance of 3 percent sales growth. 
    French spirits maker Pernod Ricard has posted over 3 percent growth in full-year net profit, boosted by strong sales in the US and China. The owner of Absolute Vodka and Martell cognac also raised its dividend by 7 percent.
    French conglomerate Bouygues reiterated its full-year guidance for higher earnings after posting strong first-half profits. The owner of French TV channel TF1 says operating profit surged 87 percent, while sales rose 3 percent.

    Swiss drug giant Novartis has won approval from the US Federal Drug Administration for a lucrative $475 thousand dollar leukemia treatment. The move was widely expected after a FDA panel unanimously supported the drug's approval. 
    These are the biggest moving stocks in Europe as at 8:13 a.m. London time.
    British fashion designer Jimmy Choo says it's well positioned to deliver strong results this year after posting a sharp increase in first-half pre-tax profit and revenue. The group reported 16 and a half percent revenue growth but described the operating environment as challenging.
    Activist investor Elliott Management is threatening to derail Cinven and Bain's planned acquisition of the pharmaceutical firm Stada. It says it will only support the deal if minority shareholders in the company receive at least 74.4 euros per share. 
    Ladbrokes Coral has reported a 7 percent rise in half year earnings. The betting company saw operating profit of almost 159 million pounds, up from nearly 148 million pounds previously. Revenue also jumped for the period. The results come after GVC talks ended over a reported takeover of Ladbrokes.
    Hays full year profits were boosted by 17 percent. The result is broadly in line with estimates. The UK recruiter benefited from growth in continental Europe.
  • The retail firm Westfield has announced a partnership with ride hailing taxi firm, Uber.
    Westfield says it will devote pick up and drop off areas for Uber vehicles at all of its 33 shopping centers in the United States.
    The deal also includes a permanent "Uber Lounge" at the Westfield Century City LA store, which is currently undergoing renovation.
    People shop at the newly opened Westfield World Trade Center shopping mall at the Oculus on opening day on August 16, 2016 in New York City.
  • Moody's has said it expects China's economy to grow by 6.8 percent in 2017.
    The ratings agency has played down concerns over failed auto loan payments stating that delinquencies were set to remain low.
    European stocks may be up this morning but August will finish lower for the average of the top 600 listed companies.
  • The German adjusted jobless rate for August has come in unchanged at 5.7 percent. That matching estimates.
  • The EU competition commissioner Margrethe Vestager has said that German automakers could face "very high" fines if they are caught guilty of price collusion.
    Vestager also said to Business Insider that she sees no major differences between business practices of Anmerican tech companies and german auto firms.
    German autos are lower in session.
  • China's manufacturing PMI beat expectations in August, revealing surprise growth in the sector. Analysts had forecast a slight dip in activity on rising borrowing costs.
    However, services PMI disappointed, cooling to 53.4.  
    Jonathan Fenby, China Chairman at TS Lombard is on set and says the key takeaway is that manufacturing is stillstring.
    Fenby argues that any slackening of growth in China won't happen until the early part of next year. In part he says this is down to a cooling in property.
    On Beijing interference in the way bigger Chinese companies are run, Fenby says he sees the trend continuing. He says private firms are given only so much leeway but the Communist party are keen to keep a tight grip.
    I see this as a  part of Xi Jinping's power accumulation.
  • A reminder of our headlines as we head into the mid-morning trades:
    • Brexit talks move ahead, and the stakes get higher with every tick of the clock. CNBC spoke exclusively to the European Parliament's chief Brexit negotiator, who said settling the divorce bill will be critical.
    • British Prime Minister Theresa May says the UK will build the "closest, freest trading relationship possible" with Japan as she continues her post-Brexit trade-building mission.
    • Carrefour shares sink to the bottom of the Stoxx 600, dragging rival Casino down, after the French grocer issues a profit warning on declining margins. 
    • And President Trump hits the road to campaign for a tax overhaul. But there's a lack of specifics, and plenty of opposition in Congress.
  • I guess it just isn't good for business.

    Warren Buffett: Here's why I haven't been criticizing Donald Trump

    CNBCBerkshire Hathaway chief Warren Buffett, who's remained quiet on President Trump, tells CNBC he tries not to mix business and politics.
  • U.S. futures are suggesting markets will open higher later today.
  • Euro zone inflation in August accelerated to 1.5 percent versus an estimate of 1.4 percent.
    The euro nudges up to its highest session level against the dollar.
  • Germany's unemployment rate came in unchanged at 5.7 percent in August, in line with expectations, while the number of jobless claims fell by 5,000.
    This is evidence that the increase in unemployment claims in June was likely a blip, according to Claus Vistesen, chief euro zone economist at Pantheon Macroeconomics.
    The steady decline in unemployment claims and rising number of vacancies continue to tell a story of a tight labour market, and risks of upward wage pressures. In addition, strong underlying growth in the economy suggests that the labour market will get tighter still in the short run.
    The separate report for employment—July data—showed that the pace of job gains accelerated slightly to 1.6%, from 1.5% in June, which is an impressive run rate in light of how low the joblessness rate is. 
    The euro is up about 12 basis points against the dollar today.
  • The Stoxx 600 is up almost 0.6 today, carrying on the rally seen yesterday, as markets digest positive overseas trade. Here's how the individual major bourses are performing.
  • An explosion and smoke have been reported by local news media at the flood affected Arkema chemical plant in Crosby, Houston. 
    Arkema has warned that a lack of cooling power would trigger explosions but say the threat of more still remains and that residents should stay away.
    The explosion is thought to be from peroxides which are no longer being stored at a low temperature due to a lack of power.
    In a statement reported by the BBC, the company said:
    At approximately 2am CDT [07:00 GMT], we were notified by the Harris County Emergency Operations Center of two explosions and black smoke coming from the Arkema Inc plant in Crosby, Texas.
    Local officials had previously established an evacuation zone in an area 1.5 miles from our plant, based on their assessment of the situation.

    We want local residents to be aware that product is stored in multiple locations on the site, and a threat of additional explosion remains. Please do not return to the area within the evacuation zone until local emergency response authorities announce it is safe to do so.
    The company evacuated remaining workers at the damaged plant on Tuesday, and Harris County ordered the evacuation of residents within a 1.5-mile (2.4-km) radius of the plant, which makes organic peroxides used in the production of plastic resins, polystyrene, paints, and other products.
  • The U.K. Prime Minister Theresa May has said she agrees with Japanese Prime Minister Shinzo Abe to increase the pace of sanctions on North Korea.
    For his part Abe has said he agreed with May that China should do more to rein in the actions of Pyongyang.
    Seperately,Theresa May has said Britain should be free to sign international trade deals during the Brexit transition period. 
    U.K. leader Theresa May with Japanese counterpart Shinzo Abe.
  • The UN Human Rights chief says he is concerned that civilians are "paying an unacceptable price" in the battle for Syria's Raqqa, according to Reuters.
    He says forces battling Islamic State in Raqqa may be breaking international humanitarian law.
  • The Stoxx 600 has hit a session high after Reuters reports the policymakers at the ECB are increasingly worried by the strong euro.
    These euro concerns increase the change of a delay to a decision on QE, or could cause a more gradual exit from asset purchases.
  • The euro has hit a session low against the dollar following a Reuters report that ECB policymakers are concerned about the common currency's strength and may delay or slow down QE tapering as a result.
    The asset purchase programme is due to expire at the end of the year, but the ECB may now opt to taper the purchases at a more gentle pace. It is assumed that the central bank will need to taper QE before raising the interest rate, although this is not necessarily the case. 
    Here's what a source told Reuters.
    The exchange rate has become a bigger issue.
    It is now less favourable for an exit and a stronger argument for a muddle-through option.
  • French Prime Minister Édouard Philippe says mass unemployment is a terrible waste for France and reforms are required to tackle this. He adds that President Macron's labour reform plan is meant to make up for lost time and that voters gave Macron a majority and mandate on labour reform.
    This comes as the French workers union CFDT says it is "disappointed" with the government's reform proposals.
    The government has said it would cap unfair dismissal payouts and give companies more flexibility to adapt pay and working hours to market conditions. 
  • The recently-elected French president wants to make the labor market more flexible to improve the country's economy.

    However, the issue has always sparked problems with trade unions. Opponents will closely monitor Emmanuel Macron's press conference at around midday local time on Thursday and the president is likely to face resistance.
    Click on the link below to read more on this story.

    France’s Macron could be about to face his defining moment amid fierce protest and plummeting support

    The French government is to unveil final details of proposed labor reforms Thursday in what is seen as a key plank of President Emmanuel Macron's political and economic strategy for the next five years.
  • The French Prime Minister Edouard Philippe says the labor reform proposals will cap fines for unfair dismissal, will merge employee representatives at large companies and will help small firms bargain with employees. The decrees are intended to balance union demands and ambition. 
  • Dollar General reports Q2 earnings per share of $1.08, missing the IBES forecast of $1.09. 
    The company earnings net income of $294.8 million on revenue of $5.83 billion in the second quarter and says same store sales rose 2.6 percent.
  • U.K. Prime Minister Theresa May is visiting Japan this week to build relations between the two countries. She and Japanese President Shinzo Abe have published a joint statement today concerning the recent North Korean missile test.
    North Korea’s recent ballistic missile launch on August 29, which passed over Japan, was an outrageous provocation and posed an unprecedented, serious and grave threat to Japan’s national security. Japan and the United Kingdom condemn North Korea in the strongest terms possible for this reckless act, which was a clear violation of United Nations Security Council Resolutions.
    In response to this illegal action, Japan and the United Kingdom agree to work together to counter this threat, and to work with others in the international community to strengthen pressure against North Korea, including by increasing the pace of sanctions implementation and working towards the adoption of a new and effective resolution at the UNSC. 
  • The EU's chief Brexit negotiator Michel Barnier says Brexit talks this week have brought useful clarifications on many points and was fruitful, but no decisive progress on main subjects was made.
    He says at the current pace, they have not made sufficient progress to open trade talks.
    He says it is impossible for the EU to automatically recognise U.K. rules and standards as adequate. He also criticised the U.K. government's recent error in sending deportation letters to EU citizens in the U.K.
    He also criticised Britain over the Brexit bill. He said it is not acceptable that the U.K. will not pay the EU beyond its obligations in the final pre-Brexit budget. 
    Barnier says trust needs to be built to resolve issues over rights and finances.
  • U.K. Brexit minister David Davis is also speaking after another round of Brexit negotiations with the EU. 
    Davis says concrete progress was made this week. He says the U.K. is ready to settle its EU bill in line with the law but also in the spirit of continued relationships. He claims the U.K.'s approach is substantially more flexible and pragmatic than the EU in order to avoid Brexit disruption.
    He said both sides aimed to be constructive this week.
  • Campbell Soup reports Q4 adjusted earnings per share of 52 cents on sales of $1.66 billion. Net income was $318 million.
    This missed expectations. The IBES view for sales was $1.69 billion and earnings per share of 55 cents. The company expects 2018 sales to either fall 2 percent or be unchanged. 
    The company said the bottom line was disappointing, but it expects to return to profitable growth going forward.
  • The latest Challenger Gray report says U.S. job cuts rose 19.4 percent in August versus July. Employers shed 33,825 jobs in August, 5 percent more than a year ago. 
    The report says high lay-offs occurred in the retail sector due to store closures, but demand continues for skilled technical workers and logistics and supply chain workers.
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