World Markets Live - July 6 - CNBC Live Events

CNBC Live Events

World Markets Live - July 6

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

  • Treasury yields initially dipped after the weaker-than-expected payrolls data, but these have now reversed. ADP June U.S. private sector jobs total increased by 158,000.
    The benchmark 10-year yield has hit its highest level since May 12, rising 4 basis points.
    The 30-year yield has hit a more-than one-month high of 2.895 percent.
  • Good morning and welcome to World Markets Live.
    We'll begin full blog coverage from 0600 BST. For now, here are the opening calls for Europe.
  • Here are the top headlines this morning:
    • Get ready for the great unwind. Minutes from the latest Fed meeting show officials are ready to start shrinking the bank's balance sheet, despite an intense debate over inflation levels.
    • Asian stock markets fall on the news, while oil prices recover from steep losses in the U.S. session spurred by data showing a rise in OPEC exports.
    • No end to the Gulf rift. The Arab powers blockading Qatar call Doha's response to their demands "disappointing" while Turkish President Reccep Erdogan reaffirms his support for the isolated state.
    • Out of power. Tesla shares suffer their biggest drop in a year, tumbling more than seven percent, as the carmaker's latest delivery numbers fall short of expectations.
    The United States is prepared to defend itself and its allies using military force against North Korea in order to stop the country's nuclear weapons programme, the U.S. Ambassador to the United Nations Nikki Haley said on Wednesday.
    She added that a global diplomatic action was the preferred solution, but North Korea's actions were "quickly closing off the possibility of a diplomatic solution."
  • US Federal Reserve members were split on the inflation outlook and how to factor it into the timing of future interest rate hikes. That's according to minutes from the FOMC's June meeting, when the committee boosted interest rates, amid muted inflation.
    Fed Chair Janet Yellen has called a recent inflation decline temporary, and the minutes reveal general agreement that it will rise to the 2 percent target in the long term.
    There were differing opinions on how long the jobless rate can safely stay below the what the Fed considers full employment, and on when it should begin winding down its balance sheet.
  • Thanos Vamvakidis, head of European G10 FX strategy at BofA Merrill Lynch, says the Fed is taking advantage of the good times to normalize monetary policy.
    Recent years data has been weak, but the Fed believes this to be temporary and the recovery is very advanced. We have to understand that many of the Fed policies are crisis-driven policies and we’re not in a crisis any more. 

    The recovery in the U.S. is complete, so the financial conditions have actually been loosening despite the fact that the Fed has been hiking.
  • Sodexo has announced its 9-month sales came to 15.984 billion euros, with organic growth of 0.5 percent.
    The company says its Q3 performance was disappointing but the group is confident that revenue growth will accelerate in Q4. It expects full year revenue growth of 1.5 to 2 percent instead of the 2.5 percent previously forecast.
    It is keeping its forecast operation profit growth of 8 to 9 percent.
  • Three of the world's biggest energy companies have reportedly pushed Qatar to expand its gas production by 30 percent. According to Reuters, the CEOs of ExxonMobil, Shell and Total have met with the Qatari Emir in Doha, lobbying for an increase in output of liquified natural gas.
    Oil prices are up today.
    Meanwhile, the war of words between Qatar and its neighbours continues. Four Arab countries are expressing disappointment at Qatar's "negative" response to their demands. But they declined to put new sanctions in place. The details of the response from Qatar haven't been made public.
  • CNBC's anchors are discussing the viability of electric vehicles compared to hybrid and combustion engines. Steve Sedwick had this to say.
    How far do you think it can go on its electric engine? I’ve heard in real world tests twenty miles. Twenty miles! That gets me to the M25, if I’m lucky.

    Let’s just park aside the fact that these electric engines are pretty pony at the moment anyway and I’ve had this out with the boss of Ford, I’ve had this out with other bosses on this channel, the fact is these engines aren’t there. Apart from Tesla, no one has the range at the moment.
  • President Trump arrived in Poland yesterday ahead of the G-20 meeting in Hamburg. 
    Poland's President Duda says Trump's visit to Warsaw strengthens Poland's position in the EU.
  • The U.S. warns it's ready to use force against North Korea, to stop the country from developing its nuclear missile programme. Speaking at a UN Security Council meeting on the recent ICBM test, U.S. Ambassador Nikki Haley said America would prefer a diplomatic solution, but that the isolated country was "closing off the possibility".

  • Chancellor Angela Merkel has said she expects there to be "difficult discussions" at the G20 summit that kicks off in Hamburg Friday. 

    This, as the city prepares for thousands of protesters, demonstrating for a range of causes, with much of the tension involving President Donald Trump. 
  • Zurich Insurance has announced its board of director has proposed Michel M. Lies to succeed Tom de Swaan. He will take over as chariman in 2018. 
  • Deutsche Bank has published a range of new stock target prices and ratings. Here are some highlights
    • BHP Billiton: raised to buy from hold and target price increased to 1600p from 1400p
    • Nostrum Oil & Gas: cut to hold from buy and  target prices dropped to 540p from 600p
    • Premier Oil: price target cut to 56p from 75p
    • Tullow Oil: price target cut to 200p from 260p
    • Flight Centre Travel Group: price target raised 29 percent to A$40 from A$31, but its rating remains at hold
  • Dow Jones traders seemed to have extended the 4th of July into the 5th of July. The index finished yesterday's session down just 1.1 points.
    The Nasdaq finished the session stronger, up two thirds of a percent.
  • Tesla shares had their worst day in over a year, falling more than 7 percent, as the electric car maker's delivery numbers disappointed investors. 
  • Britain could no longer be Europe's top financial centre after Brexit. According to a report by The City U.K., British financial businesses will relocate to continental Europe to retain access to the single market.
    The lobby group also urged the U.K. government to simplify the process of getting a visa to attract skilled workers.
  • Facebook, Twitter and Snap are said to be seeking permission from Fox to show clips from this year's football World Cut, accoring to a Bloomberg reporting citing sources.
    The social media platforms are reports to have offered Fox tens of millions of dollars for the rights to highlights from the Russia-hosted games that air in the U.S.
  • Brexit is a terrible mistake. That’s according to Virgin founder Sir Richard Branson
    The British billionaire says the U.K. general election result has greatly diminished the chances of a hard brexit. Speaking to CNBC, he added that the U.K. will likely opt to re-join the European Union once the damaging economic consequences of Brexit become clear.
    What’s happened with Brexit was a terrible, terrible mistake, both for Europe and for Great Britain and will set Great Britain back. It may take years for it to recover.
    What’s happening in the U.S. is extremely unhealthy and dangerous. We’ll certainly speak out on that.
    Branson predicts in a few years that younger voters may demand another referendum to re-join the EU.
  • German foreign minister Sigmar Gabriel says there is great concern that the U.S. may start a trade war with Europe.
    He says Europe must seek to reach through dialogue a situation in which Europe and the U.S. can act together, according to Reuters.
    Speaking on the Qatar crisis, Gabriel says there is currently no risk of military escalation.
  • U.S. President Donald Trump has arrived in Warsaw, the first stop in his European tour that will take him to Hamburg for the G-20 Summit this weekend and Paris for Bastille Day. He will meet with Eastern-European NATO allies and deliver a speech to the Polish people.
  • Shortly before departing for his trip, President Trump took to twitter to criticise China over its handling of North Korea, attacking the country for increasing trade with the isolated nation. 
    He tweeted, "so much for China working with us."
    Oliver Luckett, CEO of Revilopark, discusses the president’s use of the social media platform.
    It is the reality. Whether it’s a good thing or a bad thing, he has a direct connection, an unbiased, unedited connection, to millions of people. So he has the ability to say what he’d like to say to a group of people and excite them or stimulate them or get them riled up, which he does very frequently.
    That is the reality that we’re dealing with.
  • The Bank of France’s Governor François Villeroy de Galhau says the country should see growth of about 1.6 percent this year.
    He says France could cut the unemployment rate to about 7 percent with ambitious reforms.
  • German May industrial orders grew 1 percent month on month, according to the economy ministry. This was under expectations of 2 percent growth.
    Consumer goods orders were down 2.9 percent month on month.
    April's industrial order was revised to -2.2 percent from -2.1 percent.
    The economy ministry says a solid development in orders and an excellent business climate suggest a continued upturn in manufacturing.
  • Associated British Foods reports group revenue for the 40 weeks ended 24 June was 10 percent ahead at constant currency and 20 percent ahead at actual exchange rates. This reflects a translation benefit from the devaluation of sterling, but this benefit will be significantly less in Q4.
    The company says Q3 revenue growth was 13 percent. Underlying operating performance during the quarter was ahead of forecasts. Sales growth in the last 16 weeks was 15 percent at constant currency.
    It adds that stronger profit at its clothes retail brand Primark has marginally improved its full year outlook. Sales at Primark year to date are 13 percent ahead of last year. It expects Primark's full year margin and rate of decline to be in line with the first half of the year.
  • Reckitt Benckiser says the recent cyberattack disrupted the company ability to manufacture and distribute products to customers in multiple markets.
    The company expects to lose some revenue permanently as a result, but expects to recover some Q2 lost revenue in Q3.
    The company now expects full year like-for-like revenue growth of around 2 percent, down from 3 percent.
  • Bovis reports its trading performance in the first half of the financial year is in-line with its management expectations.
    Production has slowed for 2017 and it expects full year completion volumes to be around 10 to 15 percent below the 2016 level.
    In the first half of the year, it delivered 1,512 completions. That's compared to 1,601 last year. The average selling price increased by around 9 percent during the first half.
    The company says its net debt stand at around £33 million.
  • Asian shares dropped following the release of the Fed minutes. 
    The central bank minutes revealed a lack of consensus on the future pace of U.S. interest rate increases, creating some uncertainty. It also led to the dollar weakening against the yen, which has weighed on the Nikkei.
  • German Chancellor Angela Merkel says she expects there to be "difficult discussions" at the G20 summit that kicks off in Hamburg Friday. 

    This, as the city prepares for thousands of protesters, demonstrating for a range of causes, with much of the tension involving President Donald Trump. 
    Meanwhile, Germany Foreign Minister Sigmar Gabriel says he's worried President Donald Trump could "start a trade war with Europe." Gabriel made the comments to German radio, just ahead of the President's arrival in Hamburg. 
  • Ireland has announced it is exercising its over-allotment option in relation to the IPO of Allied Irish Banks.
    The end of the stabilisation period means the remaining 448 million euros of proceeds from the IPO can be remitted to the Irish exchequer. This brings the proceeds received from the IPO to around 3.4 billion euros.
  • Trump's European trip will include talks on trade and infrastructure. The talks come as Trump looks to push through a trillion dollar plan in America, aimed at revamping the ageing transportation network there.
    Doug Peterson, president and CEO of S&P Global, says there will be an infrastructure investment plan in the U.S., but doesn’t think it will end up being what’s currently proposed by the Trump Administration.
    The real need in the United States to fill the infrastructure gap is to get more private sector funding into the economy. There is a lot of funding on the sideline coming from the private sector: it’s pension funds, it’s nurses, it’s teachers, it’s policemen, it’s firemen who have their pension systems. That money starts going into long term infrastructure that matches their needs in the long-run for their retirement programmes.
  • A cautious open is called for European markets. The FTSE and DAX futures are marginally higher, while the French CAC is called flat.
  • Cloetta announces it is to divest its Italian operations. The sale equals an enterprise value of around 450 million Swedish krona. The proceeds will generate a positive net cash effect of around 415 million krona.
    The divestment will result in an impairment estimated to be cost around 365 million krona before tax, which will be reported in Q2.  The transaction is not subjected to regulatory approvals and is expected to close in Q3 of 2017.
  • A magnitude 6.0 earthquake has struck 7 km east of Lincoln, Montana in the U.S. It occurred at a depth of 10.0 km, according to Reuters citing PTWC.
  • The U.S. Federal Reserve members were split on the inflation outlook and concerned about how long the unemployment rate can stay under 4.7 percent. That's according to minutes from the FOMC's June meeting.
    There was also spirited discussion on when to unwind the Fed's $4.5 trillion balance sheet. The minutes did not include a timeline on putting the Fed's plan into effect.
    Scott Thiel, deputy chief investment officer of fixed income at Blackrock, says there was a robust discussion at the Fed about when to withdraw stimulus.
    Our base case scenario still is they announce in September to begin in December and although there seems to be a discussion at the board, there doesn’t seem to be much of a change in that view.
    So what that means for investors is they have to think about how to invest in an environment where the Fed will begin to effectively step back. The consensus would still suggest September for December.
  • Italy economy minister Padoan says there no looming "brushfires" endangering other Italian banks such as those in Veneto.
  • The European Commission has cleared Peugeot's 2.2 billion euro takeover of German car maker Opel.

    The French car group is hoping the acquisition can help it compete better against Volkswagen in the German market.
  • Benchmark U.S. 10 year Treasury yields popped above a 7-week high, following the Fed minutes release.
    The peak comes in a period of elevated yield levels, amid views that global central bank policy is becoming increasingly hawkish. 
    The yield is currently around 2.3356 percent.
  • French finance minister Le Maire says it is important that the government monitors how the big state energy and transport companies are managed.
  • European markets are now open for Thursday's session. The Stoxx 600 is basically flat at the start of trade as the market digests the Fed minutes.
  • Hungary's preliminary reading of May's industry output growth is 8.8 percent year-on-year, versus a fall of 3 percent year-on-year the previous month.
  • A choppy start to Thursday's session. The DAX, FTSE MIB and Spanish IBEX are positive, while other markets are flat or negative.
  • Here are some key stocks to watch today and how their shares are performing. Click or tap on the arrows to switch charts.
    Reckitt Benckiser has downgraded its revenue guidance after a global cyber attack hurt the manufacturing and distribution of its products in several markets. The British consumer goods company has predicted a 2 percent drop in second quarter like-for-like revenue. It also revised down its growth forecast for the full year from 3 percent to 2 percent. Shares are down 2 percent.
    Sodexo has trimmed its full-year sales growth goal to a range of 1.5 to 2 percent, down from an original forecast of 2.5 percent. Weaker activity in health care and universities in North America weighed on results. The catering services company said its full-year operating profit growth would come in at the low end of its range, between 8 to 9 percent. Shares are down 4 percent.
    Bovis has booked an additional £3.5 million provision to fix problems in its newly built homes. The British housebuilder, which is undergoing a turnaround, warned that first half profitability has been impacted by higher build costs. But it added that results were in line with expectations. Bovis says it has slowed production this year and expects completion volumes to be around 10 to 15 percent below 2016 levels. The shares are broadly flat.
    Associated British Foods, parent company of fashion retailer Primark, has revised its full year outlook higher. It took the step after posting a 13 percent jump in third quarter revenues for the group - but Primark sales grew 15 percent. It now expects operating profit margin at the discount retailer to remain stable rather than decline. The company says it's benefiting from sterling weakness, but warned that currency tailwinds are likely to diminish in coming quarters. The shares are up nearly 4 percent.
  • The Bank of France Governor Villeroy says complying with the public deficit target of 3 percent of GDP is crucial if only to ensure France's credibility in Europe, according to Reuters. He adds that the country faces sovereign debt shock and competition risks if it can't repair its finances.
    He says increasing social security contributions is not the answer, but certain tax cuts should be deferred if not financed. He adds that Macron's planned saving of 60 billion euros are a minimum.
  • U.K. foreign minister Boris Johnson says North Korea's actions are reckless and illegal. He told BBC radio that it is important the world stands together against its actions.
    He adds that China must go further on dealing with North Korea.
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