World Markets Live - June 16 - CNBC Live Events
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CNBC Live Events

World Markets Live - June 16

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

  • Some broker calls on European stocks this morning for you to chew over:

    • Davy Research raises Heidelberg Cement to "outperform", expecting significant cash generation potential.
    • Societe General cuts Vestas to "sell" claiming the Danish wind power firm is entering a period of sluggishness.
    • Goldman Sachs raises Ryanair to  "buy" suggesting the carrier is best placed to take advantage of short-haul capacity cuts by Alitalia. At the same time, Goldman is cutting British Airways owner IAG to neutral.

    Goldman liking Ryanair 

  • The London tower fire death toll has been revised upwards to 30 according to a statement made at the latest police press conference.
  • The following are some stocks that are making pre-market waves in the United States:

    Dow Chemical, DuPont  - The Justice Department cleared the planned merger between the two without any further divestitures.  The two companies say they are on track to close the deal in August.

    Alphabet– The company’s Google unit may be hit with a record European Union fine of about $1.1 billion, according to multiple reports.  The EU is said to be set to conclude that Google abused its search market dominance.

    Booz Allen Hamilton  – Booz Allen is under Justice Department investigation regarding its accounting practices, according to an SEC filing by the consulting firm.  Booz Allen said it is cooperating with the government, and that its own auditing had not identified any erroneous practices.

    Weight Watchers – The shares are getting a boost following a filing by general counsel Michael Colosi showing he purchased 7,110 shares in the weight loss company.

    Nike – Nike was downgraded to “neutral” from “overweight” at JPMorgan Chase.  JPM said although it is encouraged by Thursday’s announcement of a more efficient structure, North American sales are likely to get worse before they get better.

    Johnson & Johnson – Johnson & Johnson announced the completion of its $30 billion purchase of Swiss drug maker Actelion.

    Square – Credit Suisse downgraded the mobile payment company to “neutral” from “outperform”, saying the stock is now fully valued after more than doubling since November.  It does say management has executed very well since going public in late 2015.

    Futures of the 3 main indices look like this:


  • The Russian Central Bank has cut its key interest rate to 9 percent from 9.25 percent. 

    In a statement, the bank has added that economic activity is recovering and that inflation is close to target.

    On growth, the central bank says Russia's GDP should now fall between 1.3 and 1.8 percent in 2017.

    The ruble has strengthened versus the dollar on the move. Onlookers had tipped a larger 50 basis point cut.



  • Oil prices have risen in session but ongoing concerns about supply excess are keeping them on track for their fourth consecutive week of losses.


    Reuters have put out an interesting story regarding the use of old tankers to store oil for future sale.

    The essence of the piece is that crude is being stored offshore in Malaysia and Singapore because traders can currently receive more for future delivery of oil than for immediate delivery.

    That situation is called 'contango'.

    The article estimates that floating storage costs around $20,000 per day for an older vessel and that tankers holding around 2 millions barrels of oil are being chartered for periods between 30 day and 6 months.

    Brent for delivery at the end of 2017 is currently about $1.50 more expensive per barrel than for immediate delivery.
  • U.S. housing starts for May have come in at 1.092 million, falling 5.5 percent from April.   That number is a seasonally adjusted annual rate.

    It marks the lowest figure in 8 months.  

    Housing starts for May were seen rising 3.4 percent. 

    Analysts have tipped that the number of Americans seeking homes will rebound in coming months, driven by strong employment gains and low unemployment.

     Construction workers build a single family home in San Diego. Mike Blake | Reuters

    Yields on US debt has moved lower on the data, particularly on the short end of the curve.


  • Brexit negotiation talks start on Monday, but we appear to have an agenda issue.

    The U.
    K.'s "Brexit" department has reportedly issued a statement stating that Britain's withdrawal agreement and the terms of the future relationship must be agreed in tandem with each other.

    The European Union wants to focus the initial stage of talks solely on the terms of the U.K.’s departure.

    Only when that is resolved would they then attempt to arrange a future trade relationship.

    Monday's agenda is as follows:

    Opening of the negotiations between the EU and the UK on the withdrawal of the UK from the European Union by Michel Barnier, the European Commission’s Chief Negotiator, and David Davis, UK Secretary of State for Exiting the European Union.

    • 11.00: Opening session (Michel Barnier and Secretary of State David Davis) plus officials
    • 12.30: Working lunch between Michel Barnier and Secretary of State David Davis
    • 14.00 – 16.30: Working groups
    • 16.30: Meeting of coordinators (Sabine Weyand, European Commission’s Deputy Chief Negotiator and Olly Robbins, Permanent Secretary, UK Department for Exiting the EU)
    • 17.30: Closing session (Michel Barnier and Secretary of State David Davis)
  • Just moments until U.S. trading but in Europe, grocery firms are already falling in value follwoing news that Amazon is buying Whole Foods for $13.7 billion.

    Tesco, WM Morrison and Sainsbury's are all lower by 3 to 4 percent in session





  • This is the picture for wider markets on a day dominated by Amazon and Whole Foods.


  • The slideshow below runs you through the best and worst performers on the main 3 U.S. indices.

    This is as of 9:49 a.m. New York time.

    Click or tap on an arrow to flow through.

     
     

    1 of 6


  • And here is the early effect on the grocery stocks. Wal-Mart is the worst performing Dow component.


    United Natural Foods has been disproportionately affected. It had a market cap of about $2 billion prior to today's 22 percent drop.

    The company blurb says United Natural Foods engages in the distribution of natural, organic, and specialty foods.

    It seems Amazon's logistic capability could be destructive to that firm's revenue. 
  • Food stocks are also falling as investors make the bet that Amazon will be able to drive down the price it pays for the groceries that customers put in their basket.
     
    General Mills down 2 percent
    Kellogg down 1.2 percent 
    Mondelez down 1 percent
    Kraft Heinz down 2 percent
  • This is the session performance of the 3 largest European markets today. 


    Still early in the day for U.S. markets but here's the weekly picture.


  • And here is Whole Foods opening up for trade: 

    The stock is up more than 27 percent and now sits just higher than the $42 dollars per share that Amazon has agreed to pay for the company.


  • In terms of retail, this is Amazon's biggest buy by a massive margin.

    Until the purchase of Whole Foods, the biggest ever deal Amazon had conducted was the 2009 purchase of Zappos.com Inc for just shy of a billion dollars.

    The move is interesting the general public on social media.  On theory is that an Amazon Prime membership will soon be key to unlocking deals at WholeFoods.

  • Shares of Whole Foods Market rocketed 28 percent on Friday after Amazon said it plans to acquire the grocery store chain for $42 a share, in a deal valued at $13.7 billion.

    Amazon's offer represents a 27 percent premium to Whole Foods' closing price on Thursday. With Whole Foods shares trading around Amazon's offer price, investors appear to be speculating that another suitor could make a play for the grocery chain.

    by david.reid

  • This is the biggest ever acquisition for Amazon and it is the biggest ever grocery M&A deal.

    On air, Jim Cramer makes the call that food prices in America will fall.

    He says it is great for the American consumer as "Amazon is a deflationary force".

    Jeff Bezos, chief executive officer of Amazon 

    Reuters is reporting that today's deal has cost shortsellers of Whole Foods $ 251 million.
  • Whole Foods shares currently sitting just shy of $42 per share deal that Amazon and Whole Foods hope to complete before the end of 2017.

    The last time hole Foods commanded this share price was May 2015.

  • So by this quite robust logic from CNBC's Bob Pisani, Amazon just got a multi-billion dollar company for free. No scratch that, it got Whole Foods free, PLUS $900 million. Mind boggling. 


    Bob also offering up the Friday funnies. 


  • A reminder of U.S. stocks, oil and gold as we approach the end of the week.




  • Amazon is to buy Whole Foods for a $13.7 billion. That equates to $42 per share.

    The deal includes the debt of Whole Foods.

    Amazon released a press statement celebrating their purchase:


    Millions of people love Whole Foods Market because they offer the best  natural and organic foods, and they make it fun to eat healthy.

    - Amazon founder Jeff Bezos

    The Amazon press release said John Mackey, Whole Foods Market co-founder and CEO, is set to stay on as CEO and Whole Foods Market's  headquarters will stay in Austin, Texas. 

    Whole Foods CEO John Mackey had been under pressure from large investors to explore a sale.


  • European Markets ending the day higher. 



    Today we saw Greece 10-year bond yields at lowest level in nearly a month after a deal on fresh funds; but NO details on debt relief yet. That helped stocks across Europe although on the week, indices are lower.

    Nestle shares moved higher after reports on a possible sale of its U.S. business, and Russia cut key interest rate by 25 basis points to 9 percent

    But the big news was Amazon's purchase of Whole Foods for $13.7 billion. It affected grocery stocks all over the world. That deal set to be finalized before the end of 2017.

    This where we will leave the blog today. Continue to follow coverage of the Amazon bid to buy Whole Foods online at CNBC.com as well as on TV of course.

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