World Markets Live - July 3 - CNBC Live Events

CNBC Live Events

World Markets Live - July 3

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

  • Tesla CEO Elon Musk says the company's Model 3 sedan has passed regulators' testing, as the company looks to begin production on the high-volume sedan this month.
    In a string of tweets, Musk said that the Model 3 approval was 2 weeks ahead of schedule. He added that he expects to be able to make 20,000 per month by the end of the year. Musk said earlier they will be priced around $35,000 each.
  • Good morning and welcome to World Markets Live. Here are the opening calls for European markets.
  • These are the top headlines this morning:
    • Stock markets kick off the second half of the year on a lacklustre note, after the Nasdaq ends the first half with the worst week of 2017 and yields rise across the globe.
    • This despite strong economic data from two of the world's biggest economies. Business confidence in Japan hits its highest level in more than three years, while China's manufacturing sector returns to growth in June.
    • Saudi Arabia and its Gulf neighbours give Qatar another 48 hours to meet their ultimatum, after Doha says their demands were made to be rejected. 
    • Beating them to the punch! President Trump takes his fight against the media to a new level, tweeting a mock wrestling video portraying him bashing a CNN logo.
  • Japan's Tankan report showed manufacturers' sentiment beat expectations, hitting a three-year high. The Big Manufacturers Index for June came in higher than expected at +17, compared with a Reuters poll forecast for +15. This was an increase from +12 in the March survey.
    Meanwhile, the Caixin China manufacturing PMI for June beat expectations, coming in at 50.4, marking a three-month high.
    Asian stocks were mixed on Monday, with the Nikkei higher and the Hang Seng and Shanghai Composite flat.
  • Lothar Mentel, the CEO at Tatton Investment Management, says his company is equities underweight for the first time in a long time.
    Watch that conflict brewing between the central banks and the economy. Is the economy strong enough and still synchronized enough globally to really work without stimulus from the central banks as they announce they will be cutting back?
    The central banks have made it quite clear that we are coming to the end of extraordinary monetary stimulus.
    Mentel says they don't think there is much upside in stocks until it becomes clearer in the autumn what earnings are doing.
  • Irish manufacturing PMI rises to 56.0 in June from 55.9 in May, a 23-month high according to Reuters.
    We'll have several PMI releases from euro zone economies today, proving evidence of Europe's economic progress.
  • Lothar Mentel, the CEO at Tatton Investment Management, says markets are overreacting to central bank comments.
    That nervousness of the markets is exactly why we've gone 5 percent equities underweight, because we see them just overreacting to any piece of news that comes out because they feel quite highly valued.
  • EQT infrastructure fund has announced it is to acquire a majority interest in Global Gateway South terminal in the port of Los Angeles.
    The deal has an enterprise value of $875 million.
  • Saudi Arabia and its Arab neighbours are extending the deadline for Qatar to accept its demands by 48 hours. Qatar's foreign minister has described the demands as made to be rejected.
    The blockade has been going since last month, with the Arab states accusing Qatar of funding terror, which it denies. 
  • Barclays has reportedly chosen Dublin as its post-Brexit EU hub and plans to add over 100 jobs in the city. The bank had narrowed its decision to Frankfurt or the Irish capital and has picked Dublin, where it already has about 120 staff. Barclays has agreed to rent a city centre property that can hold over 400 workers.
  • Four ex-Barclays executives are in court in London today facing charges brought by the Serious Fraud Office, connected to 2008 emergency fundraising in Qatar.
    CNBC's Gemma Acton says the Barclays institute itself is also a defendant in the case.
    This is the first time that criminal charges have been brought against a global bank and its leadership team, with regards to action taken during the 2008 financial crisis. 
  • Cloud storage company Dropbox is considering going public. That's according to a Reuters report, which says the tech company is talking to investment banks about underwriting a potential IPO. Dropbox was valued at nearly $10 billion in a private fundraising round in 2014. Its flotation would be the largest tech IPO since Snap's blockbuster listing earlier this year.  
    Meanwhile, food takeaway service 'Deliveroo' is set to become the latest European tech firm to gain 'unicorn' status. The start-up is in talks with investors, including SoftBank, on a fundraising round that would value it over £1 billion. 
  • U.S. markets finished mixed on Friday, with the Dow and S&P closing a little higher while the Nasdaq fell nearly 4 points. The Nasdaq ended the first half of the year with its worst week of 2017.
  • France's Total has announced a deal to invest $1 billion in an Iranian gas field. It's the first major investment by a western company in Iran in years.

    The gas field, located under the Persian Gulf, is one of the world's largest. Iran's oil ministry says the contract would be signed today.
    Meanwhile, Verizon Communications could be contemplating buying Disney. That's according to a report from the New York Post. One source told the paper "not to count Verizon out" of a potential deal for Disney.
  • Danone has announced it is selling Stonyfield, one of its U.S. dairy subsidiaries, to Lactalis for $875 million. This is a binding agreement.
    The subsidiary generated around $370 million in turnover in 2016, according to Reuters.
  • Pierre Moscovici, European Commissioner for Economic and Financial Affairs, says it is out of the question that France would seek a delay to going below 3 percent of public spending target.
    Meeting the EU target of reducing the country's public spending deficit to 3 percent in the first major test for new French president Emmanuel Macron.
    Moscovici says he has confidence in the French government over taking the necessary economic measures.
  • Tesla CEO Elon Musk says the Model 3 car has passed all its regulatory requirements ahead of schedule.
  • Japanese Prime Minister Shinzo Abe's Liberal Democratic Party has been defeated in the Tokyo Metropolitan Assembly election. His party lost more than half of its pre-election seats, scoring its worst ever result in a Tokyo poll.
    The poor performance follows a series of favouritism allegations involving the Prime Minister and senior members of his party.
    Tokyo Governor Yuriko Koike, who is the current leader of the newly-formed Tomin First no Kai (Tokyo Residents First) party, marks the names of candidates who won a seat in the elections
  • German Chancellor Angela Merkel says world leaders should focus on sustainable and inclusive growth in the coming G20 summit. This as anti-globalization demonstrators march in Hamburg to protest poverty and climate change.
    Speaking in her weekly podcast, Merkel set the agenda of the summit, saying leaders should focus on wealth distribution, free markets and environmental issues.
  • President Trump has been busy on Twitter again. His tirade against the media has attracted attention. NBC'S Jennifer Johnson filed this report

  • These are your headlines for the next hour:
    • Stock markets kick off the second half of the year on a lacklustre note, after the Nasdaq ends the first half with the worst week of 2017 and yields rise across the globe.
    • China's $9 trillion bond market is now open to overseas investors, as Hong Kong and China launch a bond trading link.
    • Saudi Arabia and its Gulf neighbours give Qatar another 48 hours to meet their ultimatum, after Doha says their demands were made to be rejected. 
    • Beating them to the punch! President Trump takes his fight against the media to a new level, tweeting a mock wrestling video portraying him bashing a CNN logo
  • China's defence ministry says it resolutely opposes a U.S. warship entering Chinese territory in the South China Sea. That's according to a Reuters report.
  • Hong Kong and China have launched a much-anticipated bond trading program, connecting overseas investors with  China's $9 trillion bond market. 
    This was launched to celebrate the 20th anniversary of the Hong Kong handover, according to reporter Emily Tan.
    Now investors have the opportunity to buy Chinese bonds through Hong Kong trading houses, the question is should they?
    CNBC's Geoff Cutmore had this to say.
    You clearly have the perception that the state government backs not only the state government bonds, but also the local government bonds, which trade very closely to the yields of state government bonds, but I think what would surprise many people is this is now the third largest bond market in the world after Japan and the United States, and quietly the Chinese have been getting on with learning how to issue debt, because they want to wean the economy away from the dependence on the banking system that we have here in the EU.
  • Paul Donovan, global economist and managing director at UBS Wealth Management, says central bankers and regulators combined are rigging bond markets.
    What you have is an environment where the largest buyer is typically the local central bank, or has been, and where regulation is also stricter and has forced certain investor classes (it varies from country to country) to buy bonds whether they want to or not. 

    So what you’ve got is a captive pool of investors in bonds, whereas equity markets (with the exception of Japan) are largely unaffected by this.
  • Airbus says the company is now united under a single brand following a corporate reorganisation.
    The company says it will now benefit from a simpler structure that enables faster decision-making, less bureaucracy, greater collaboration and increased efficiency.
    Fabrice Bregier is now the first ever company-wide COO and president of the commercial aircraft arm. The company now has one single corporate headquarters in Toulouse.
  • Tesla CEO Elon Musk earlier tweeted to say the Model 3 has passed regulatory requirement ahead of schedule. It will now go into production. Musk predicts they will produce 20,000 cars per month by December.
  • Polish mobile operator Play says it has gotten its IPO prospectus approved.
  • Four ex-Barclays executives, plus Barclays itself, are in court in London today facing charges brought by the Serious Fraud Office, connected to 2008 emergency fundraising in Qatar.
    CNBC's Gemma Acton says proceedings will begin around 2pm BST.
    One of the reasons why this case has gained so much attention, is because it’s the first a global bank and its leadership team has faced criminal charges with regards to events that took place during the 2008 financial crisis.
    What’s actually be trialed here? The Serious Fraud Office has brought three separate charges.  All five defendants, the executives and the bank itself, will face the first charge which is conspiracy to commit fraud by false representation in regards to the 2008 June capital fund raise.
  • Saudi Arabia and its Arab neighbours have extended the deadline for Qatar to accept their demands by 48 hours. The Arab states instigated a blockade against Qatar last month, accusing it of funding terror. They have asked Doha to take a number of steps or face further sanctions, including the closure of the Al Jazeera news network, and curbing relations with Iran.

    Paul Donovan, global economist and managing director at UBS Wealth Management, discusses how the situation affects oil prices.
    We’ve seen some of this coming though in the past week. There’s been some upward pressure. But I think fundamentally the oil story is supply and demand and it’s going to be more about demand coming through from the United States and from China in the second half of the year.

    He says U.S. and China demand will move prices more than the noise from Qatar.
    Oil prices are higher today.
  • Sweden's manufacturing PMI reaches 62.4 points in June. That's better than expected, with a Reuters poll forecasting a reading of 59.8 points.
  • Vivendi says it has bought Bollore's majority stake in Havas.
    The company says it intends to make a full buyout offer for Havas. 
  • New figures released by PWC show that the U.K.'s pension fund deficit fell to £460 billion at the end of June. That's a £50 billion decrease on the month before. PWC says a small increase in long-term real interest rates helped shrink the deficit.
    Steven Dicker, chief actuary at PwC, explained why this is important.
    What we’re talking about here is the way pension trustees value the deficit, so the way this sort of hits the wider economy is this is what decides how much cash companies need to put into schemes over time. So if you think about it this £460 billion is a huge number, but it’s sort of ten years of about the rate at which companies have been trying to pay off deficits.
  • Norway's Statoil and partners Eni and Petoro have made an oil discovery in the Kayak well in the Johan Castberg license in the Barents Sea.
    Statoil estimates the discovery at between  4 and 8 million standard cubic meters of oil, or between 25 and 50 million barrels of oil equivalents.
    Statoil will now make efforts to find a commercial solution for the discovery and to find similar prospects in the Barents Sea. Drilling will next start at Gemini North.
  • France's Total has signed a $4.8 billion gas deal with Iran. It's Tehran's first major energy contract with a European oil company in more than a decade.
    A consortium led by Total is investing to develop the world's biggest gasfield, South Pars. The agreement comes only weeks after the U.S. senate approved new sanctions against Iran. 
  • This is live picture of the release of the SpaceX Dragon CRS-11 Cargo Craft from the International Space Station. The mission was contracted by NASA and is being flown by SpaceX, which was founded by Elon Musk.
  • EDF has reported an update on the Hinkley Point C project. EDF says the first nuclear concrete for the building of Unit 1, scheduled for mid-2019, has been confirmed.
    The project's completion costs are now estimated at £19.6 billion (in 2015 sterling), an increase of £1.5 billion since previous evaluations.
  • London-listed defence and aerospace company BAE Systems has signed a £3.7 billion pound deal with the U.K. Ministry of Defence.
    The British government has agreed to buy three new high-tech warships, after months of wrangling and delays.
  • European markets are now open for the first trading day of the second half of 2017.
    The pan-European Stoxx 600 opened higher.
  • Every sector of the Stoxx 600 is in the green at the start of Monday trading.
  • Vivendi has acquired Bollore's 59 percent stake in Havas for 9 euros 25 cents a share. In accordance with market regulations, the French media company said it will now make a full buyout offer for the rest of Havas.
    Meanwhile, Airbus has integrated its corporate structure under a single brand. The company says this will reduce bureaucracy.Shares in the company are up almost 1 percent.
  • The head of the French car association says it is raising its target for growth in the French car market in 2017.
    The association now sees a 3 to 4 percent rise in French new car sales this year, versus an earlier target of a 2 percent rise.
  • The Stoxx 600 is now up more than 0.6 percent at the start of trading. Here's how the individual European bourses are performing.
  • Some data releases have come out this hour.
    Spanish June manufacturing PMI slips to 54.7 from 55.4 in May. Output fell to 55.8 in June from 57.0 in May.
    Meanwhile Swiss retail sales fell 0.3 percent in May, compared to a fall of 0.9 percent the previous month.
  • Is PMI data a useful indicator for the economy and markets? Paul Donovan, global economist and managing director at UBS Wealth Management, says the data is wildly exaggerated.
    We do not have 3.5, 4 percent growth in Europe. We are not going to get 3.5, 4 percent growth in Europe. That’s what the PMI numbers have been technically implying. 
    What we are seeing is a correction in a rather dubious indicator. It’s a sentiment indicator, it’s not a real-world indicator, and it’s coming back down. We know people don’t fill in these surveys properly. We can prove they don’t fill them in properly looking at the export number.
    Donovan says the data is due a correction and doesn't tell us anything about the real world.
  • Banco Popular is set to start off-loading around 30 billion euros of toxic assets in a bid to bolster its balance sheet. The bank's new chairman said it would begin looking for partners to buy some of its risky assets following last month's takeover by Santander.
    Talib Sheikh, portfolio manager for the multi-asset solutions team at JP Morgan Asset Management, weighs in on the sector, saying they have been fairly positive on European equities.
    We know that (European financials) are making steps to clear up their balance sheet, we’ve seen capital raising. This all looks to be positive and in the same way.
    I guess the question really is now banks, 6 to 12 months ago, you buy them on a rerating plane and that’s something that we were doing. The question now becomes can they actually grow their earnings. I guess that’s a bit more up in the air.
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