World Markets Live - June 1 - CNBC Live Events

CNBC Live Events

World Markets Live - June 1

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

    CNBC's Arjun Kharpal is reporting from the Pioneers Conference in Vienna. He says A.I. is a huge topic at the event, as well as the impact of A.I. and automation on jobs.
    There's a lot of debate over how big potential job losses are but also what kind of new jobs will be created. Of course, that's all in the future, but in the near term companies such as Facebook, Google, Amazon and Apple are all jumping into this voice assistant space.
    Oil prices are recovering today from yesterday's falls. Reports that U.S crude stockpiles had fallen more than expected have helped boosy markets, as well as expectations that President Trump is going to pull the U.S. out of the Paris Agreement on climate change. The market is reading this as a signal of his intention to scrap emission regulations, which would boost oil demand.
    Following the latest data from the Eurozone, showing Eurozone manufacturing PMI rose to 57.0 in May from 56.7 in April, Reuters has released its latest poll of forecasts..
    The Reuters poll of economists predicts Eurozone GDP to grow 0.5 percent in Q2 and 0.4 percent each quarter from Q3 until the end of 2018.  
    The poll also predicts inflation to average 1.6 percent in 2015, 1.5 percent in 2018 and 1.7 percent in 2019.
    Germany's Angela Merkel urges China to become more open to international investment and trade ties, adding that Germany and China have a growing responsibility on issues such as  the global climate, trade and conflict prevention.
    This comes after Merkel met with the Chinese premier Li Keqiang. In a series of statements to the press, Merkel said Germany and China must expand their partnership into different areas at a time of global insecurity, adding that she is pleased China is committed to sticking to its climate treaty obligations.
    Angela Merkel with Li Keqiang
    Euro area manufacturing PMIs were confirmed at 57.0 for May, the highest reading since April 2011.
    Apolline Menut, Barclays analyst, says improvements for May were underpinned by buoyant demand.
    New orders were up to a more than six-year high, which spurred job creation and production output. The increase in new orders, together with a rising backlog of works, suggests that manufacturing confidence should remain at healthy levels in the months ahead. Meanwhile, inflationary pressures continued to ease, with input and output prices standing at six- and four-month lows, respectively. This is consistent with our view that baring volatile components, underlying inflation momentum remains subdued in the euro area and is far from being deemed self sustained.
    Based on the PMI readings, Menut predicts the euro area's GDP will  grlow by 0.5 percent in Q2.

     President Putin signed this convention in Paris. Russia attaches great significance to it.

    - Kremlin spokesman Dmitry Peskov 
    U.S. markets weakened yesterday, but still managed to finish the month higher. 

    Stock markets on the stateside are called marginally higher today, according to future values but that could be easily tested by the heavy calendar of data.

    Thursday data (all times Eastern)

    0730 Challenger Job-Cut Report

    0800 Fed's Powell Speaks*

    0815 ADP Employment Report

    0830 Jobless Claims

    0830 Productivity & Costs

    0945 PMI Mfg Index

    1000 ISM Mfg Index

    1000 Construction Spending

    1030 Natural Gas Inventories

    1100 Oil Inventories

    Back in Europe, equities are higher across the board. A rebound in the price of oil has helped stocks. Crude was pushed higher after official data should a reduction of inventory in the United States.

    Oil has dipped again.

    The price of "black gold" fell on comments from the OPEC Secretary General, Mohammed Barkindo, who said that it is too early to say when production caps could be imposed on Libya and Nigeria.

    Barkindo also argued that OPEC has no issues with people taking positions in the market and that the organization is focusing on fundamentals.

    The OPEC leader said Russia, which is not a part of the cartel, has told him that they are fully committed to output cut compliance.

    The European Central Bank meets again on June 8.

    The team at ING have released a crib sheet to help central bank watchers understand what is on the agenda and what ECB President Mario Draghi and his team might do.

    ING highlights that European economic surveys have been strong of late and growth of GDP across the bloc outpaced the United States during the first quarter.

    The research team also argue that with French and Dutch election risk now gone, communication from Draghi could edge towards a more positive tone.

    While inflation in the euro zone is proving hard to generate, ING said in its note that any risk of deflation has gone.

    Source: ING/Macrobond 

    The research team offers its base case that: 

    • 2018 inflation will be unchanged at the meeting, 
    • GDP will be upgraded for the next 3 years, 
    • Forward rate guidance will remove the words "lower level" and "extended period"
    • No hint yet of QE tapering
    On this base case, ING expects euro/dollar to hit 1.12, the 2-year Schatz to remain flat and the 10-year Bund to rise 5 basis points.
    A new Spruce Goose?

    World’s biggest ever airplane unveiled by Microsoft co-founder

    CNBCA huge plane designed to launch satellites into space has been captured on video in a California desert.
    Here is a selection of U.S. listed stocks making news before the open of Thursday trade. 
    PPG Industries (PPG) – The paint maker has decided not to pursue a bid to buy Dutch rival Akzo Nobel, after several prior bids were rejected.
    Deere (DE) – The heavy equipment maker agreed to buy privately held and Germany-based construction equipment company Wirtgen Group for about $4.9 billion in cash.  
    Express (EXPR) – The apparel retailer reported a quarterly loss of seven cents per share, wider than the two cents Wall Street was expecting, while revenue was slightly below forecasts.  Comparable store sales fell more than expected, and Express did give a full-year forecast that falls below consensus, but the company said it is making progress in a challenging retail environment.
    Dollar General (DG) – The discount retailer reported adjusted quarterly profit of $1.03 per share, three cents above estimates, with revenue also beating forecasts.  Dollar General echoed other retailers in saying it was pleased with its performance in a challenging retail environment.
    Hewlett Packard Enterprise (HPE) – The company matched estimates with adjusted quarter profit of 35 cents per share, with the networking and data company beating top line forecasts.  However, it saw a significant revenue decline in its key server business, and was also hurt by a strong dollar.
    Brexit Campaigner Nigel Farage has been identified as a "person of interest" in an FBI investigation  into links between Russia and Trump's U.S. presidential campaign according to the Guardian newspaper.
    The Guardian says Farage is not a suspect and has not been accused of wrongdoing.
    Nigel Farage is the former leader of the United Kingdom Independence Party (UKIP) who were active in securing Britain's exit from the European Union.
    A spokesperson for the party has said that the Guardian report claiming Farage is a person of interest is "absurd" and that the only serious Russian politician that Farage has met is Garry Kasparov.
    Nigel Farage

    Nigel Farage has released a rebuttal:

    "This is fake news.

    In response to the Guardian article, it has taken me a long time to finish reading because I am laughing so much.

    This hysterical attempt to associate me with the Putin regime is a result of the liberal elite being unable to accept Brexit and the election of President Trump.

    For the record I have never been to Russia, I've had no business dealings with Russia in my previous life and I have appeared approximately three times on RT in the last 18 months.

    I consider it extremely doubtful that I could be a person of interest to the FBI as I have no connections to Russia.

    My meeting with Julian Assange was organized for me by LBC Radio with a view to conducting an interview." 

    The German Finance Minister Wolfgang Schaeuble has said the euro exchange rate is too low for Germany.
    He also said that Germany's account surplus is partly due to loose monetary policy.
    Schaeuble has also said that within 10 years he wants to see financial and political union in Europe as well as a European Army.
    Why do we all need our own army>
    The South African rand will weaken over 5 percent to 13.80 per dollar according to a poll of 40 FX strategists.
    The Reuters forecast takes in to account a political turmoil factor as the country approaches an ANC conference to choose the successor to current President Jacob Zuma.
    The rand has gained against the dollar today after Fitch Ratings agency affirmed its stable outlook for the country.
    Stronger than expected jobs gains in the private U.S. market have hit Treasury prices and sent yields rising.

    May's ADP figure came in at +253,000 versus expectations of 180,000 new private sector jobs.

    Good ADP numbers support the idea that there will be a Fed rate hike in June. The wider nonfarm payroll for May is due Friday.

    The next big U.S. data point will be the ISM manufacturing data due at 10 a.m. Eastern today.

    Following that jobs beat, the dollar is near high of session against yen of 111.47. That's  the highest level since May 26th when the dollar traded as high as 111.86 against the yen.

    Click through the slideshow if you want to see the best and worst performers on U.S. indices.


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    It just keeps going up.​
    The U.S. ISM manufacturing activity index has come in at 54.9 in May, beating a consensus forecast of 54.5. April scored 54.8.
    Construction spending in April fell 1.4 percent versus a consensus +0.5 percent.
    The dollar has not moved much against the yen following those two data drops.
    It's thos on the tools that are driving U.S. jobs.

    Job growth 'rip-roaring' in May on boom in construction, services: ADP

    CNBCEconomists expected the ADP report to show that private payrolls grew by 185,000 in May from the initially reported 177,000 in April.
    Citi bank is upping its forecast for Friday's nonfarm payroll release.
    •   Following stronger than expected 253K ADP May payrolls, the market will expect nonfarm payrolls growth stronger than the current 180K consensus. We revise up our headline payrolls forecast from 165K to 175K following the ADP report.
    •    With growth on a more solid footing but realized inflation soft, average hourly earnings may get more attention than payrolls in the May employment report. We expect a weaker than consensus 0.1% MoM and 2.5% YoY wage growth.

    •    The probability of a June hike, currently priced above 90% is likely to be relatively insensitive to average hourly earnings print, but the market will reprice the subsequent pace of hikes lower on a disappointment. An upside surprise would lead not only to the market pricing faster rate hikes, but also likely push up market-implied inflation expectations further out the curve.

    •    We, and consensus, expect the unemployment rate to remain at 4.4%. 
    European markets have continued to move higher during mid-afternoon trade on Thursday.

    OPEC secretary general says cannot rule out further output caps on oil producers

    CNBCThe output cut deal between OPEC and non-OPEC oil producers is a "work-in-progress", says the oil cartel's secretary general.
    Oil has held its gains after EIA data has shown a surge in refinery output.
    Consequently crude stocks fell sharply by 6.4 million barrels which far exceeded analyst expectations of a 2.5 million draw.
    U.S. crude imports fell last week by 987,000 barrels per day.
    U.S. Markets are just positive today. Data has helped to move them to move higher. 
    The Nasdaq composite gained 0.1 percent and hit a record intraday high earlier in the session. The S&P 500 also rose 0.1 percent, with health care leading advancers. The health care sector also reached its first 52-week high since March 15.
    The Dow Jones industrial average rose about 10 points, with UnitedHealth contributing the most gains.
    Private payrolls surged by 253,000 in May, easily topping a consensus estimate of 185,000, according to a report from ADP and Moody's Analytics.
    A pretty positive Thursday for European equities.
    And that is where we will close the blog for today. The main news coming up this evening will be the announcement from Donald Trump on whether the U.S. will join other countries in attempting to follow a Paris accord on climate change.
    All the reaction to that will be available right here tomorrow morning from 6:00 a.m. London time.
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