World Markets Live - June 20 - CNBC Live Events
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CNBC Live Events

World Markets Live - June 20

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

  • The Serious Fraud Office has announced it will charge Barclays and four of its former executives with fraud, including former CEO John Varley.
     
    The charges relate to the capital raising arranged by the bank in 2008 with Qatar Holding LLC and Challenger Universal Ltd, and a US$3 billion loan facility made available to the State of Qatar. The capital raising provided Barclays with a lifeline during the financial crisis and helped it avoid a state bailout, unlike Lloyds and RBS.
     
    The FCA is also waiting in the wings to pronounce a decision from its own parallel probe into the 2008 capital raising. In 2013 the FCA said it would fine Barclays £50 million over the matter, but the investigation was deferred and reopened. 
     
    Laith Khalaf, Senior Analyst, Hargreaves Lansdown analyses the decision:
     
    The SFO hasn’t pulled any punches, and Barclays now finds itself facing yet another regulatory battle. The bank is already facing litigation from the US Department of Justice and an FCA investigation into its current boss, Jes Staley, for trying to uncover the identity of a whistleblower. Skeletons seem to be jumping out of lots of closets at once for Barclays.
     
    The spectacle of former executives being paraded through court will do nothing to strengthen the credentials of the bank, as it continues to try to execute its turnaround plan. While RBS and Fred Goodwin recently avoided the ignominy of a court appearance, it appears that Barclays and its former CEO John Varley will not.
     
    However the muted reaction in the share price highlights the fact that the SFO action was largely priced in, and more widely reflects the “misconduct discount” which applies to the banking sector. Litigation, fines and compensation payments have sadly become part and parcel of the banking world, and while many of the alleged offences took place a long time ago, the costs and reputational damage are still very much a live issue.
  • Spain's economy minister says some institutional investors in Banco Popular withdrew their deposits after ratings agency downgrades. That's according to Reuters.
  • U.S. stock index futures pointed to a slightly higher open on Tuesday, as investors gear up for another batch of remarks from leading Federal Reserve officials.

    With little economic data due out on Tuesday, investors are likely to shift their attention to speeches by three leading Fed members, to see if they elaborate on the state of the U.S. economy, after the central bank recently chose to raise rates for the second time in 2017.
     
     
  • S&P's Kraemer says we have very little time for Brexit and the stakes are extremely high. S&P Global Ratings's Managing Director, Moritz Kraemer has also said that the risks in Britain are much more tangible than in rest of Europe or U.S.
  • Ryanair announces it is buying another 10 Boeing 737 Max 200 aircraft. Five of these will be delivered in the first half of 2019, the rest in 2020.
     
    (A Boeing 737-800)
     
    Ryaniar says the new order is valued at more than $1.1 billion at current list prices and will allow the airline to grow its traffic by 200 million customer per year by 2024.
     
    This brings the airliner's firm orders to 110, with 100 options outstanding. Ryanair shares are marginally higher today.
     
     
     
     
     
     
  • Oil prices are down sharply today, falling almost 2 percent. The price appears to be falling on concerns about rising supply production in the United States, Libya and Nigeria.
     
    North Sea Brent crude oil futures are down $1.06 to $45.85 a barrel, which is its lowest since mid-November.
     
     
  • Here's to watch coming out of the U.S. the rest of the day.
     
    At 8:30 a.m. ET, we have the U.S. current account for the first quarter. The current account deficit is forecast as $122.3 billion for Q1, widening from the previous reading of $112.4 billion.
     
    On the earnings front, Lennar will report before the bell. After the bell, Adobe and FedEx are the major companies posting results.
  • The diplomatic isolation of Qatar continues in the Gulf.
     
    In reaction, the Qatar Investment Authority, the country's sovereign wealth fund, has made dollar deposits in the local banking system as a precautionary step. At the end of last week, several billion dollars were deposited, according to Reuters citing attendees at a meeting of top commercial bank executives and central bank officials.
     
    These bankers told Reuters that they do not need dollar liquidity at present and withdrawals have been minor, so far.
     
    A central bank official told Reuters that there haven't been big withdrawals from Qatar banks in reaction to the diplomatic crisis. The official said the economic embargo is only having a limited effect on the banking sector and it is easily manageable.
  • Treasury Secretary Steven Mnuchin tells CNBC that his goal is to simplify the tax code and that he is not concerned with slowing tax receipts.
     
    He urges Congress to raise the debt ceiling as soon as possible, as U.S. debt is very important to its reputation around the world.
     
     
     
     
  • Steven Mnuchin is trying to dispel fears about unfilled appointments at the Treasury. He says 16 appointments have been filled, 5 more are in the process of being filled, and other roles can be gotten rid of as they overlap with others.
     
    He says he is confident that tax reform will get done this year.
  • The U.S. Treasury Secretary says they are still studying the idea of a 100-year bond. He says they are giving it serious consideration.
  • A deal between the U.K. Conservative Party and Northern Ireland's Democratic Unionist Party will possibly be delivered this week. That's according to Reuters citing a DUP source.
     
    The Conservative Party requires the DUP support in order to attain a majority in the U.K. Houses of Parliament. This will allow it to more easily pass laws. 
  • Oil prices are down around 2 percent today. Concerns around persistent, growing U.S. oil production is damaging market sentiment.
     
    Miswin Mahesh, oil market analyst with Energy Aspects, shared his thoughts on what else is causing the market to fall.
     
    It reflects ample supplies of light sweet crude in the Atlantic. Higher output from Libya, Nigeria; and offers of North Sea crude from floating storage are looming on the market.
     
     
  • The pan-European Stoxx 600 has pared gains and is now trading flat.
     
     
    The fall in oil prices has hammered stocks in the oil & gas sector. The basic resources sector is also dragging on the index.
     
     
  • U.S. stock futures predict the stocks will open broadly flat.
     
    The markets will open at 09:30 a.m. ET. Future values predict S&P and the Nasdaq will be flat, while the Dow will drop around 20 points.
     
    This after the indexes hit fresh record highs in yesterday's session.
     
     
    Stocks to watch after the open include Tesla. The company is reported to be close to agreeing on a plan to open a production plant in China.
     
    Tesla shares are up more than 3 percent in premarket trade on the news.
     
     
  • Ford announces it is investing $900 million in its Kentucky truck plant to upgrade it to build the new Ford Expedition and Lincoln Navigator.
     
    Meanwhile, the car maker says production of the next generation Ford Focus will begin in H2 2019, adding that the model for North America will be sourced globally, mainly from China rather than Mexico.
     
    The company says no U.S. employees will be out of a job as a result of this new manufacturing plan and claims this plan will save $1 billion in investment costs.
     
    Production of the North America Focus model at its Michigan assembly plant will continue through to mid-2018.
     
    Ford shares are flat in premarket trade on this news, which means it will export its next Focus from China to the U.S. from 2019.
     
     
     
     
     
     
  • The U.S. debt yield curve from 5-year to 30-year has flattened to 97 basis points. This is the flattest it has been since December 2007.
     
    The yield on short term 2-year and 5-year debt is ticking higher. Meanwhile, the yield on 30-year debt is down 3 basis points.
     
     
    Meanwhile, the inflation breakeven rates on U.S. TIPS have sagged to their lowest levels since before the U.S. election. They are sliding in step with oil futures, which hit a seven-month low today.
  • U.S. markets are now open, moving to the downside. The Dow and Nasdaq hit fresh record highs in yesterday's session.
     
     
  • The Dow and S&P 500 are down for the first day in three. Energy and telecom stocks are lagging as crude oil touches its lowest price in seven months.
     
    Lead on the Dow is McDonalds, after Cowen & Co. raised its target price from $142 to $180 and upgraded its rating to outperform from market perform.
     
    Here are the other winners and losers on the Dow.
     
     
  • Oil prices continue to tumble, entering a bear market. The price for crude is now down nearly 3 percent.
     
     
    Concerns about rising production from the U.S., as well as from Libya and Malaysia, is causing the sell off. 
     
    For more on why oil prices are falling, click here.
     
     
  • The Dow Jones has set a fresh all-time high, briefly rising to 21,535.03.
     
    The index has now shed gains and remains flat.
     
     
  • Data published earlier today revealed the U.S. current account deficit widened to $116.78 billion in the first quarter, compared to $112.4 billion in the previous quarter.
     
    However, this was less than the $122.3 billion deficit seen by forecasters.
     
    The trade data helped the dollar to rise further against the U.K. pound. Sterling is under pressure today following this morning's comments from Bank of England Governor Mark Carney, who said now was not the time to raise British interest rates.
     
     
  • With less than one hour until the close of European markets, the Stoxx 600 is currently falling, down almost half a percent.
     
    The fall in oil prices has hit stocks in the oil & gas sector hard. The basic resources sector is also down around 3 percent, dragging on the index.
     
     
  • As oil enters a bear market, with prices at multi-month lows, here's some good news for the commodity.
     
    OPEC and non-OPEC countries' compliance with oil production cuts in May was 106 percent. This was the highest compliance rate since the start of the supply cut deal. That's according to Reuters citing a source familiar with the matter.
     
    Crude prices remain down around 3 percent today.
     
     
  • European markets are now closed. The Stoxx 600 index finished the session down more than half a percent.
     
     
    The fall in crude oil prices hit markets hard. The losses were felt across European markets.
     
     
     
  • Most sectors ended Tuesday's session in negative territory. Only the food & beverages and the health care sectors finished positively.
     
    Here's a look at the best and worst performing shares on the Stoxx 600.
     
     
     
  • We'll close the blog there. Join us again tomorrow for more from World Markets Live.
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