World Markets Live - July 12 - CNBC Live Events

CNBC Live Events

World Markets Live - July 12

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

  • Geoff highlights fresh data which suggests that oil and gas service firms are reducing capital expenditure and asks Richard Harris, Chief Executive at Port Shelter Investment Management, if he is bearish on the sector.
    Harris says what is evident is "a natural fall out that takes 12 to 18 months" from oil price falls.
    I'm not terribly suprised to see weakness or consolidation in the Oil & Gas sector as it is a natural follow on from a halving of the oil price.
    - Richard Harris, Chief Executive at Port Shelter Investment Management
  • BMW Group reports June global sales rose 2.1 percent on the year to 232,620 cars. January to June sales are up 5 percent on the year to 1.22 million.
    Sales of the BMW Mini brand in June were up 3 percent on the year to 39,443 cars.
    Shares in the auto maker are up about 0.7 percent today.
  • These are some of the key stocks moving markets today.
    • Burberry has announced underlying revenue growth of 3 percent. The luxury brand, led by new CEO Marco Gobetti, reported retail revenue of £478 million in its first quarter. Stronger demand in mainland China and a continuing good performance in the UK were key factors.
    • Britain's biggest homebuilder Barratt Developments increased its output by just 76 homes in the last year. The figure was revealed today as they announced increased pretax profit of £765 million. Despite not increasing output, average prices for their houses rose by about 5.9 percent.
    • Bilfinger has issued its first profit warning in more than 2 years. This over U.S. legacy projects approved before newly appointed CEO Thomas Blades took over a year ago. The German engineering company logged a second quarter operating loss and now only expects 2017 EBITA to breakeven.
    • Pearson continues to fall as brokers cut estimates after selling a 22 percent stake in Penguin Random House. The stock is off about 10 percent  in two sessions.
  • Apple is reportedly scrambling to fix bugs on its next iPhone. According to Fast Company, problems with wireless charging and 3D sensing have engineering and design teams working around the clock.
    Apple typically releases new iPhones in September, but some industry watchers think the next model might appear as late as November. We asked Apple for comment about the reported problems, but a spokesperson wasn't immediately available.
    The share price of chipmakers who supply Apple seem largely unfazed by the news.
    Chipmakers remaining robust in face of Apple delivery rumors.
    Richard Harris, Chief Executive at Port Shelter Investment Management says it is interesting that Apple are reportedly pricing the new iPhone 8 at a level so much higher than competing phones.
  • The CEO of BP Bob Dudley says the OPEC and non-OPEC deal has brought some balance to oil markets, Dow Jones reports.
    Dudley says the company is boosting its focus on renewables to adapt to the low carbon economy. He adds that six out of seven big projects coming on stream in 2017 are natural gas.
    Dudley will be speaking to CNBC later this morning.
  • These are the top headlines following the European market open:
    • Back in fashion! A recovery in growth in mainland China helps Burberry post 3 percent underlying revenue growth in the first quarter, boosting its shares along with the rest of the luxury sector.
    • Shares in Amec Foster Wheeler fall sharply after the UK Serious Fraud Office launches a probe into suspected corruption and bribery at the energy services firm.
    • Pearson's shares fall more than 10 percent in two days, after the publisher is hit by a round of analyst downgrades, following its sale of a chunk of Penguin Random House.
    • Investors nervously await Janet Yellen's testimony on Capitol Hill, but IMF chief Christine Lagarde tells CNBC in an exclusive interview that the Fed will not cause another taper tantrum
  • Saudi Arabia is to cut oil shipments to customers by more than 600,000 barrels per day in August due to an increase in demand at home, according to Reuters citing a Saudi industry source.
    August oil exports will fall to their lowest level this year at 6.6 million barrels per day. Exports to the U.S. will fall below 800,000 barrels per day.
    Saudi Arabia is keen to see an improvement in the oil market and accelerate rebalancing, according to the source. Saudi Arabia will work closely with other producers to stabilise the market by making sure production cuts continue.
  • Bank of England Deputy Governor Ben Broadbent says he's not ready to raise interest rates. In an interview with the Scottish Press and Journal newspaper, Broadbent said it was "too tricky to make a decision" just yet. He cited a nervous mood among businesses as one reason why he was wary of pulling the trigger on rates.
    Broadbent's comments caused sterling to drop against the dollar. The pound is trading down 0.2 percent against the U.S. currency.
  • Britain's foreign secretary Boris Johnson has told the EU to "go whistle" over its final Brexit divorce bill. Responding to a question from a fellow eurosceptic Conservative MP in parliament, Johnson was urged to condemn demands by some EU officials for what he deems "extortionate" final payments.
    Jakob von Weizsäcker is an MEP for the Party of European Socialists and a member of Germany's SPD.
    He joins the TV team on the phone from Brussels.
    von Weizsäcker tells Geoff that Boris Johnson has started his apprenticeship in diplomacy but his humorous style may not be appropriate for Brexit negotiations.
    He says time is staring to run out a little bit after the clock started ticking from the triggering of Article 50.
  • Brokers are cutting their ratings for Pearson as its shares fall. This after it announced yesterday it sold a 22 percent stake in Penguin Random House.
    Panmure cut the stock from hold to sell, and dropped its target price to 525p. Credit Suisse gave the stock a neutral rating, but cut its target price to 730p. Lastly, Investec gave the stock a hold rating, but cut its target price to 647p from 774p.
    Shares in Pearson are down more than 10 percent.
  • Amec Foster Wheeler is under investigation by the Serious Fraud Office over use of third parties, bribery and corruption offences.
    The British oil and gas services firm said it will cooperate fully with the probe, adding that it did not expect the investigation to impact its 2.2 billion pound takeover by John Wood Group.  
    However, shares in the company have fallen sharply on the news.
  • There's growing speculation about Fed Chair Janet Yellen's future.
    Politico is reporting that President Donald Trump is considering replacing her with his National Economic Council Director. Gary Cohn was Goldman Sachs' president before joining the Trump administration.
    Gary Cohn, director of the U.S. National Economic Council.
    On set Michala Marcussen, Global Head of Economics of Societe Generale, tells Geoff and Carolin that personalities do matter when it comes to leading the Fed.
    She notes that Yellen herself could continue in the role.
  • The pound has hit an eight-month low against the euro at £0.8934
    That will tick up the price of egg and chips for those British holidaymakers as they bask in the sun.
  • Speaking at the World Petroleum Congress in Istanbul, Iran's deputy oil minister says Iran expects to reach oil output of 4 million barrels per day by the end of 2017. He says it is too early to discuss OPEC cuts.
    The minister says the country is not short of customers for its crude.
  • CNBC will be speaking to the CEO of BP Bob Dudley later this morning.
    Speaking in Istanbul, Dudley is reported to have said the OPEC strategy is working. He expects oil inventories to fall towards the end of the year. He says the oil market is pretty much in balance, according to Reuters.
  • Here's how European markets are performing one hour into Wednesday trade. The pan-European Stoxx 600 index is up 0.57 percent.
  • Oil markets are trading solidly higher after yesterday's U.S. government oil report which cut its crude production outlook for next year and saw current fuel inventories plunged.
    U.S. crude oil inventories fell by 8.1 million barrels in the week to July 7 to 495.6 million, according to the American Petroleum Institute (API).
  • Here are the best and worst performers across Europe.
    Perhaps the standout news this morning is that of biggest faller, Amec. The oil services and construction firm is being investigated by the UK Serious Fraud Office over suspected corruption and bribery. 
    On average though, it is a positive morning for Europe's bigger listed stocks with an aggregate of the top 600 rising by 0.5 percent.
  • Sanctions against Qatar will continue until demands of the 4 Arab states leading the boycott are met. They released a firm statement, as US Secretary of State Rex Tillerson visited Doha, part of a trip across the Middle East. Meanwhile, Qatar is working to circumvent the blockade by importing 4000 cows, the first of which are arriving this week.
    One man with property interest in Qatar is Hussain Sajwani, Chairman of Damac.
    He says, so far, there  has been no impact on the property market there so far but does not that oil prices have depressed sentiment on some countries in the region.
    He excludes Dubai from this, noting that the city is now deriving only small amounts of income from oil.
    Hussain Sajwani, Chairman of Damac.
    Sajwani has done deals with the Trump organisation and says he remains very happy to do business with the President and his sons.
    Mr Sajwani says he finds Trump fair, easy to talk to but a tough businessman. When pressed if there is any more deals with the Trump brand in future, Sajwani says none exist at present.
    On U.K. property he says land prices in London are coming down a touch and that offers up some opportunity to execute long term development plans.
  • The U.K. unemployment rate has dropped to 4.5 percent, the lowest level since 1975.
    The ILO jobless figure fell 64,000 to a total of 1.495 million in the 3 months to May.
    Sterling has risen on the news.
    Sterling rebounds on UK jobs data.
    June's adjusted jobless claimants rose +6,000.
    The negative news came in the form of depressed real income for U.K. householders with inflation reaching a 4 year high of 2.9 percent in May, which translated that pay in the three months to May fell 0.7 percent.
    That would mark the steepest fall since mid-2014. 
    Bob Dudley the CEO of  BP is live on air with Steve at the World Petroleum Congress in Istanbul.
    Steve asks Bob about balance in the market that is claimed by the BP boss and he takes a moment to qualify his meaning:
    To me it means balance on a daily basis between production and demand is equal and that is the case.
    It is just that the market is focusing on the high levels of inventories.
    Dudley says there is a school of thought that price spikes could occur as there an investment gap appearing from the Oil & Gas sector.
    He says as much as $2 trillion dollars may have been deferred in production. 
    Dudley is planning BP budget at around $50 per barrel.
    On the U.S./Russia relationship he says it is hard to penetrate the news and get a clears sense of what it means for firms such as BP.
  • On Trump's energy policy Bob Dudley says many people may not agree with his decision on coming out of the Paris climate accord.
    I'm sure there will be a new energy policy for the United States and I think Trump will encourage more use of natural gas.
    I think the U.S. will be increasing focus on renewables.
    - Bob Dudley, CEO of BP
    Dudley says with 2 billion more people due to live on the planet, he estimates that oil and gas will still provide the bulk of energy needs by 2035.
  • The euro zone industrial output for May has come in at +1.3 percent month on month and +4.0 percent higher year-on-year.
    That above forecasts of 0.8 and 3.6 percent respectively.
    The euro-dollar pair as it was at 10:40 a.m. BST.
  • Are you convinced by the argument for investing in crypto-currencies or is it just all a bit risky for you?

    The case for investors sticking out the volatility in bitcoin and ethereum

    CNBCThese digital assets offer more in return than any other, more established asset classes, experts say.
  • Royal Dutch Shell is to sell assets in Ireland for as much at $1.2 billion.
    Through Shell Overseas Holdings the energy firm has reached agreement with Canada Pension Plan Investment Board unit to sell shares in Shell E&P Ireland.
    Shell E&P Ireland holds a 45% interest in the Corrib Gas Venture. 
    The deal, which represents Shell's exit from upstream business in Ireland, is
    expected to complete in the second quarter of 2018.
    Shell says it will retain a presence in Ireland through Aviation JV, Shell and Topaz Aviation Ireland Limited.
  • The Italian energy firm ENI says it has successfully drilled an offshore well in Mexico.
    Oil production is expected for early 2019 with estimates ranging between 30,000 and 50,000 barrels per day.
  • U.S. markets look set for a mildly positive open later.
    Wednesday will see The Federal Reserve Chair Janet Yellen address Congress with her Monetary Policy Report.
    The Bank of Canada is also set to announce its latest interest rate decision and investors will watch to see if U.S. markets respond further to the release of Donald Trump Jr.'s emails.
  • The chief negotiator for Europe in the Brexit process, Michel Barnier, is speaking in Brussels and is keeping up the pressure on the U.K. to make progress on talks to withdraw from the political and trading union.
    So far Barnier has said that:
    • There are numerous differences with Britain on Brexit proposals for expat's rights
    • A problem if UK contests EU demand that ECJ is guarantor of rights.
    • Britain must recognize the existence of financial obligations to EU.
    Barnier says without progress on 3 main areas,  Brexit bill, citizens’ rights and Irish border, the EU and U.K. cannot move on to talks about a  future relationship.
    Michel Barnier, European Chief Negotiator for Brexit.
    In reference to the U.K. foreign minister Boris Johnson's call that the EU could "go whistle" for a settlement, Barnier said all he could hear is a clock ticking.
  • Donald Trump has said on Twitter that his son "did a good job last night".
    This amid mounting pressure over a meeting Trump Jr. attended with a Russian lawyer in the belief she would hand over damaging information on Hillary Clinton.
  • Some more commentary from the EU Brexit negotiator Michel Barnier.
    He has said that the European Union is not trying to push the abandon talks by insisting on EU court supervision.
    This means that the European Court of Justice would remain the ultimate arbiter of expat rights.
    Barnier wrapped up talks by suggesting that he could not imagine a great country like Britain would not respect its commitments to the EU.
    Barnier also confirmed that he will meet the main U.K. opposition leader Jeremy Corbyn  tomorrow as well as Scottish First Minister Nicola Sturgeon and Welsh leader Carwyn Jones.
  • OPEC's oil production rose again in June, driven by increases in Libya and Nigeria and as top exporter Saudi Arabia reported it pumped more than it agreed to last year.
    A joint committee of ministers from OPEC and non-OPEC oil producers decides on output caps.
    Libya and Nigeria are two OPEC members exempt from cutting output.

    The producer group's total output jumped by about 393,500 barrels a day to a total of 32.6 million barrels a day last month, according to independent assessments cited by OPEC in a monthly report.
    The increases came despite the producer group extending a deal to limit production in May.
    OPEC expects world oil demand growth to slow down slightly next year. It forecast global consumption will grow by 1.26 million barrels a day to average 97.6 million barrels a day in 2018.
    by david.reid edited by Spriha Srivastava 7/12/2017 11:05:00 AM
  • Oil prices hold gains as OPEC reports rising production in June:
  • OPEC's oil output jumps again in June as the group struggles to end the crude glut

    CNBCOPEC's oil output rose in June, driven by increases in Libya and Nigeria and as Saudi Arabia reported it pumped above its quota.
  • Gold steadied on Wednesday, holding above this week's near four-month low ahead of a closely watched speech by U.S. Federal Reserve Chair Janet Yellen later in the day.

    Investors will be watching Yellen's semi-annual monetary policy testimony before Congress for clues on the Fed's attitude towards inflation, and on when the U.S. central bank will start reducing its $4.5 trillion balance sheet.
  • French interior minister says France wants to work with Britain on re-negotiating 'Le Touquet' border controls agreement. That's according to Reuters.
  • U.S. markets are called higher today, ahead of the market open due in an hour and a half.
    Future values predict the Dow will open about 40 points higher, the S&P 5 points up and the Nasdaq to gain around 24 points.
    This after a mixed session yesterday when Donald Trump Jr. sparked a market sell-off when he published his email exchange concerning meeting a Russian lawyer in 2016. Market recovered from the sell off but the Dow finished flat and the S&P was down a couple of points.
  • Poland's June net inflation grew 0.8 percent year on year, matching forecasts, according to the country's central bank.
    Meanwhile, India's consumer price-based food inflation for June fell 2.12 percent year on year, according to the Indian government. Price-based inflation grew 1.54 percent in June year on year, below the 1.7 percent expected.
  • Games company Activision Blizzard has announced the sale of league teams for major global cities for the video game Overwatch, Reuters reports.
    Activision has spent the last few years developing the e-sports sector, releasing games designed to appeal to e-sport fans and promoting tournaments. The e-sports sector generates huge amounts of revenue by selling tickets, streaming access and merchandise to fans who want to watch e-sport video game tournaments.
    Overwatch league teams have been announced for Boston, Los Angeles, Miami-Orlando, New York, San Francisco, Seoul and Shanghai.
    New team owners include Robert Kraft, chairman and CEO of the Kraft Group and the New England Patriots, and Jeff Wilpon, COO of the New York Mets.
    Overwatch was launched in May 2016 and features teams of characters trying to complete objectives.
    Gamers playing Overwatch during 'Paris Games Week' in October 2016
  • American Airlines reports record traffic in June. Total revenue passenger miles were 21.0 billion, up 0.8 percent from June last year.
    It has raised forecasts for its key revenue metric. It expects its Q2 total revenue per available seat mile to be up around 5 to 6 percent.
    Shares are more than 3 percent higher in premarket trade on the back of the report.
  • Challenger Gray data shows June U.S. CEO turnover jumped nearly 19 percent, Dow Jones reports.
    95 CEOs left their posts in June, up 18.7 percent from May, but down 2 percent from a year ago.
  • U.S. stock index futures pointed to a higher open on Wednesday as traders awaited the latest central bank policy announcements.

    Dow futures rose 34 points, while S&P and Nasdaq futures climbed 4.25 points and 15.75 points, respectively.

    Federal Reserve Chair Janet Yellen will be outlining her Monetary Policy Report Wednesday in an address to Congress which is likely to also pose questions about further tightening and Yellen's own future at the central bank. Meanwhile, the Bank of Canada is expected to follow the Fed's gradual tightening agenda and hike rates for the first time in seven years.
  • Fed Chair Yellen: Central bank likely to unwind stimulus despite low inflation
    Federal Reserve Chair Janet Yellen emphasized Wednesday that the central bank is closely watching tepid inflation data but that she still expects to begin shrinking its $4.5 trillion bond portfolio later this year.

    In prepared remarks for her semiannual testimony Wednesday and Thursday on Capitol Hill, she said that the bond portfolio, or balance sheet, eventually will be "appreciably below" its current level. Last month, central bank officials unveiled their plan for slowly reducing reserves by phasing out reinvestments.

    Yellen: Fed likely to unwind stimulus despite low inflation

    CNBCIn remarks for her testimony on Capitol Hill, she said that the balance sheet, eventually will be "appreciably below" its current level.
  • Dollar hit session lows against the yen after Fed Chair Janet Yellen's testimony:
  • Royal Bank of Scotland will pay $5.5 billion to settle one of the two major U.S. investigations into allegations it mis-sold mortgage-backed bonds that it needs to resolve before the government can sell its shares in the bailed-out bank.

    The Edinburgh-based bank lender on Wednesday said it agreed to settle the lawsuit with the U.S. Federal Housing Finance Agency (FHFA) that accuses it of mis-selling $32 billion of mortgage-backed securities before the global financial crisis.

    Analysts had previously estimated RBS would have to pay between $3.5 to $5 billion to settle the case with the FHFA.
  • Shares in RBS are trading nearly 2 percent higher on the back of this news:
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