World Markets Live - June 28 - CNBC Live Events
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CNBC Live Events

World Markets Live - June 28

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

  • A lack of home for sales is being pointed to as a reason for weaker pending home sales.
     
    The euro and sterling have extend gains against the dollar on the news. The dollar index has hit a more than 7-month low of 96.03 after the weaker the home sales data. The euro hit a 1-year high of $1.1390.
     
     
    U.S. Treasury yields are rising as well. The yield on the benchmark 10 year note is up almost 4 basis points today.
     
     
  • Good morning and welcome to your Wednesday live blog. The headlines are as follows:
     
    • U.S. stocks sell off after Republican leaders postpone the Senate vote on healthcare reform, in another policy blow to a key part of President Trump's agenda. 
     
    • ECB President Mario Draghi boosts the euro to 10-month highs after hinting that tapering could start sooner than expected, but Vice President Vitor Constancio says that market conditions must be right. 
     
    • Hackers strike again in another large-scale cyberattack that targets some of the world's biggest corporations and government infrastructure. 
     
    • Nestle launches a $20 billion share buyback and says it will focus on capital spending just days after Third Point's Dan Loeb put pressure on the firm to shake up its structure.
  • Just a reminder of how markets in the United States closed yesterday evening.
     
    The Dow Jones industrial average pulled back about 100 points, with 3M and Apple leading decliners. The 30-stock index fell after multiple reports said the Senate will hold off on voting on a bill to repeal and replace Obamacare until after the July 4 recess.
     
    The Nasdaq composite underperformed, falling 1.6 percent, as shares of Google-parent Alphabet declined more than 2 percent. The EU fined Google a record $2.7 billion, as regulators ruled the company violated antitrust rules.
     
    The S&P 500 dropped 0.8 percent.
     
     
     
  • U.S. Senate Republican leader Mitch McConnell says the vote on a healthcare overhaul bill will have to wait a while. McConnell met with President Donald Trump to discuss the delay.
     
     
    The Senate leader says there's a "really good chance" the bill will eventually be passed, and warns of the consequences if not:
     
    The status quo is simply unsustainable. It'll be dealt with in one of two ways. Either Republicans will agree and change the status quo, or the markets will continue to collapse and we'll have to sit down with Senator Schumer and my suspicion is any negotiation with the Democrats would include none of the reforms that we would like to make both on the market side and the Medicaid side. So for all of those reasons we need to come up with a solution. The American people elected us to do that and we're working hard to get there.
     
     
    Republican leaders wanted to vote on it this week, but didn't appear to have the numbers after several in their party expressed reservations. U.S. stock markets fell on the news of the delayed vote.
  • NBC's Tom Costello has the details of the cyberattack.

    by david.reid via null edited by luke.graham 6/28/2017 5:24:57 AM
  • A major global cyber attack has spread across Eastern Europe, causing severe disruption in Ukraine and Russia. The attack involved malware known as "Petya", locking victims' computers and asking them to pay a Bitcoin-based ransom of $300.

    The disruption spread to several European companies, including Maersk, Merck, WPP and Rosneft, who all blamed IT outages on the attack.
     
    The virus used is similar to the ransomware attack last month that infected more than 300,000 computers, according to cybersecurity experts.
     
    In a statement, the US National Security Council said government agencies were investigating the attack.

    The US Department of Homeland Security advised victims not to pay the ransom..
     
    More on the story can be found here:
     

    Cyber attack sweeps globe, researchers see 'WannaCry' link

    CNBCA major wave of cyber attack worldwide disrupted computers at Russia's biggest oil company, Ukranian banks and multinational firms.
     
  • Speaking at the British Academy in London, U.S. Fed Chair Janet Yellen said she did not expect another financial crisis in "our lifetimes" and warned against any unwinding of reforms in financial services.
     
     
    I think the system is much safer and sounder. As I mentioned we are doing a lot more to try to look for financial stability risks that may not be immediately apparent, but to look in corners of the financial system that are not subject to regulation, outside those areas, in order to try to detect threats to financial stability that might be emerging. So would I say there will never ever be another financial crisis? Probably that would be going too far but I do think we are much safer and I hope that it will not be in our lifetimes, and I don't believe it will be.
     
    On air, Steve questions the value of a central banker making such a bold claim and highlights the trend of global debt as an ever-present factor.
     
     
  • Electronic trading platform Tradeshift is a cloud based business that connects business who are conducting transactions with each other.
     
    CEO Christian Lanng is at the World Economic Forum in Dalian, China with Geoff. He opened the discussion by rejecting any direct talk of a rumored deal to sell to Marc Benioff, CEO of Salesforce.
     
    Although when pressed he did admit that "maybe" he would sell at the right price.
     
     
    Geoff steered the conversation on to the threat of similar companies that use blockchain but Lanng says he doesn't spend much time worrying about that.
     
    Talking about blockchain as a competitive technology is like saying databases are a competitive technology. We view it as a commodity.
    - Christian Lanng, CEO & Co-Founder of Tradeshift.com
     
    On the valuation of big technology - FANG stocks - Lanng says there was still a lot of potential for growth in the sector.
  • A reminder of our top stories:
     
    • ECB President Mario Draghi boosts the euro to 10-month highs after hinting that tapering could start sooner than expected, but Vice President Vitor Constancio says that market conditions must be right. 
     
    • Hackers strike again in another large-scale cyber attack that targets some of the world's biggest corporations and government infrastructure. 
     
    • Nestle launches a $20 billion share buyback and says it will focus on capital spending just days after Third Point's Dan Loeb put pressure on the firm to shake up its structure. 
     
    • Philips sets its eyes on Spectranetics, a medical device maker, snapping up the firm in a deal valued at 1.9 billion euros. 
  • According to the Nationwide survey, U.K. house prices rose 1.1 percent month-on month in June.
     
    That a bounce back from the 0.2 percent fall witnessed in May.
     
    On a year by year basis, UK house prices were 3.1 percent higher in June.
  • The Financial Conduct Authority (FCA) in the United Kingdom has today published the final findings of its asset management market study.
     
    The FCA is claiming that price competition is weak in the market and that it wants to see all-in fees and independent board members introduced into the fund management industry.
     
    Despite a large number of firms operating in the market, the FCA’s analysis found evidence of sustained, high profits over a number of years. The FCA also found that investors are not always clear what the objectives of funds are, and fund performance is not always reported against an appropriate benchmark. Finally, the FCA found concerns about the way the investment consultant market operates.
  • European bourses are expected to open lower on Wednesday morning as investors digest comments from European Central Bank President Mario Draghi who suggested the central bank could taper its stimulus program this year.
     
     
    The euro was marginally higher ahead of Wednesday’s opening bell, up 0.2 percent at $1.1360.
     
     
    The single currency had hit 10-month highs in the previous session after Draghi hinted the central bank could be prepared to scale back its monetary policy amid improving economic prospects in Europe.
     
    However, he reiterated that any move would be gradual and said that support was still needed for a recovering euro area.
  • Nestle has announced a $20.8 billion dollar share buyback, just days after activist investor Third Point went public with a series of demands. Third Point's CEO Daniel Loeb accused the company of "being stuck in its old ways," claiming that share repurchases are a particularly attractive option at the moment. Nestle says it will focus on capital spending as part of its re-vamped strategy. 
     
     
    Steven Wieting, Global Chief investment strategist at Citi Private Bank is on set with Karen and Steve.
     
    He says with borrowing costs so low, European firms should lever up their balance sheets in a manner that U.S. firms have already done.
     
    He says with dividend yields sitting at 3.5 percent then borrowing to enact buybacks is a simple method of positively engineering a balance sheet.
  •  
    French consumer confidence has hit 108 for June versus a forecast of 103 according to official statistics body, INSEE.
     
    That is the highest level since June 2007.
     
    The Macron effect? The French consumers have expressed their highest confidence in a decade.
     
  •  
    Europe's markets have opened lower. This after "hawkish" Draghi comments pushed the euro higher yesterday afternoon and a global cyber attack infected the computer systems of firms.
     
     
  •  
    Here are the best and worst of the stocks across Europe this morning.
     
     
     
  • Individual bourses look like this.
     
     
    Meanwhile here are some of the stocks on the move.
     
    Nestle has announced a 20 point 8 billion dollar share buyback, just days after activist investor Third Point went public with a series of demands.
     
    Loeb has pressured Nestle sell down its stake in the French cosmetics group. L'Oreal shares rallied nearly 4 percent on news of Third Point's investment.
     
     
    Dutch medical equipment maker Philips has announced a 1.9 billion euro takeover of Spectranetics. The U.S.-based firm makes medical technology like lasers and drug-covered balloons to solve issues related to heart disease.
     
    Dutch government investors are cutting their stake in ABN AMRO bank to 63% from 70%. The Netherlands nationalised part of the financial firm in the 2008 financial crisis. It was partially reprivatised via IPO in 2015.
  • Francesco Filia, CEO & CIO, Fasanara Capital is our guest host this morning. He says:
     
    There is complacency which is insensitivity to fundamentals and markets are completely insensitive to whatever happens in the economy. That is a concept and I call it 'Fake Markets'. Just like fake news, we have fake markets. The ones that don't respond to hard data or soft data, only when they fit certain narratives. They follow certain narratives that are very handy or exposed. Firstly it was chasing yields then it was chasing growth and reflation then it couldn't become sustainable because Q1 GDP came out 0.7 in the US, it moved into chasing earnings.
     
     
     
     
  • Moller Maersk says shut down a number of systems to help contain issue. The company has been hit as part of a global cyber attack named Petya on 27 June. That's according to Reuters.
  • A major global cyber attack has spread across Eastern Europe, causing severe disruption in Ukraine and Russia. The attack involved malware known as "Petya", locking victims' computers and asking them to pay a Bitcoin ransom of 300 dollars. 
     
    The disruption spread to several European companies, including Maersk, Merck, WPP and Rosneft.
     
     
  • The Financial Conducty Authority has called for a shakeup of the UK asset management market. The call comes after the FCA's long awaited reported into the sector.
     
    Calling for more transparency, the watchdog is aiming to improve value for money for customers. 
     
     
  • Not a single sector in the green this morning. Technology is the worst of the bunch which is marrying what was witnessed in the United States yesterday.
     
     
     
  • Francesco Filia, CEO & CIO, Fasanara Capital talks about banks and the risks Europe faces with some of Europe's ailing banks:
    I think regulators are going in the right direction. Yesterday there was the liquidation of two banks in Italy and there were a lot of critics that this was very different from the deal that happened with Santander and Banco Popolar. I think bending the rules is instrumental in getting the right results and don't inflict pain on the system. 
     
     
     
    There will be two problems with letting banks go. One is retail. In a bail in, it will be a disaster for retail. There are 2 million households and businesses banking with these banks. On the other hand there is systemic risks and contagion effects similar to the one happening in Banco Portugal.
  • After 30 minutes of trade, our headlines in Europe look like this:
     
    • ECB President Mario Draghi boosts the euro to a 12-month high after hinting that tapering could start sooner than expected, but Vice President Vitor Constancio says that market conditions must be right. 
     
    • Shares of Nestle open higher after the Swiss food giant launches a 20 billion dollar share buyback and says it will focus on capital spending, just days after Third Point's Dan Loeb pressured the firm to shake up its structure. 
     
    • Maersk shuts down a number of its systems after hackers strike in another large-scale cyber attack targeting the shipping giant and several other corporations and government institutions across Europe. 
     
    • European Pharma stocks drag after Republican leaders postpone the Senate vote on healthcare reform, in another policy blow to a key part of President Trump's agenda. 
  • Lesetja Kganyago, Governor of the South African Reserve Bank speaks to CNBC live from the ECB forum in Sintra:
     
    The economy has slowed down and the extent of the slowdown is quite significant. It takes place at a time when we have very strong recovery in agriculture, mining and I think that if you look through at the sectors, it has to do with business and consumer confidence. If you restore the business and consumer confidence then you will have the economy going again.
     
    South Africa still runs twin deficits. The current account deficits had come down. That has to be financed with external flows. Although the government is on the path of fiscal consolidation we still run a budget deficit. 
     
     
     
  • The Bank of Canada Governor, Stephen Poloz, has told CNBC  that he has given up trying to model the specifics of NAFTA until the details of the trade deal's furutre becomes more clear.
     
    He says the uncertainty for companies is "a bit of a headwind" but he hopes for clarity soon when negotiations start in the summer.
     
    Poloz: NAFTA uncertainty is a headwind
     
    He highlights that the oil price shock was bad for Canada and good for the U.S. so it was not surprising that Canada cut rates while the Federal Reserve was looking at raining rates.
     
    Canada's next interest rate decision is in July.
  • Francesco Filia, CEO & CIO, Fasanara Capital talks about commodity markets:
    If the oil price was going to rebound to $50 instead of going down to $40, I think market will awaken, equity markets will catch up to the downside, emerging markets will catch up to the downside. We will see a scenario more similar to January and February 2016. 
     
     
     
     
  • Moller Maersk has updated on its position and reaction to the impact of a global cyberattack on its business.
     
    The attack involved malware known as "Petya", locking victims' computers and asking them to pay a Bitcoin-based ransom of $300.
     
     
    Maersk, a Danish shipping and energy company, says it has been affected but is working to contain the impact.
     
    It says the firm is not taking in new orders for the time being, has shut downa number of systems, computer terminals in ports have been affected, but vessels are safe and captains can move their ships.
     
    Shares in the group have risen since yesterday's negative reaction.
     
     
  • Here are your top news stories at this hour:
     
    • ECB President Mario Draghi boosts the euro to a 12-month high after hinting that tapering could start sooner than expected, but Vice President Vitor Constancio says that market conditions must be right. 
    • Shares of Nestle open higher after the Swiss food giant launches a 20 billion dollar share buyback and says it will focus on capital spending, just days after Third Point's Dan Loeb pressured the firm to shake up its structure. 
    • Maersk shuts down a number of its systems after hackers strike in another large-scale cyber attack targeting the shipping giant and several other corporations and government institutions across Europe.
  • Shipping giant A.P. Moller-Maersk, which handles one of seven containers shipped globally, said on Wednesday that it was working on a recovery plan a day after being hit by global cyber attack Petya.

    "We have contained the issue and are working on a technical recovery plan with key IT partners and global cyber security agencies," Maersk said in a stock exchange announcement.
     
    We have shut down a number of systems to help contain the issue, it said.

    Maersk Line vessels are manoeuvrable, able to communicate and crews are safe, while port unit APM Terminals has been impacted in a number of ports, it said.
  • BNP Paribas says its real estate arm has been hit by global cyber attack, has taken measures to quickly isolate the impact of it. That's according to Reuters.
  • Mark Testoni, President & CEO of SAP NS2 analyses the global cyberattack on companies and governments:
     
    When looking at protecting our networks from attacks like Petya and WannaCry, the focus should be on people and technology.
     
    The order of battle includes every citizen and employee.  95% of all cyberattacks are a result of human error. We must provide their employees training to identify and prevent cyberattacks.  This training should include traditional education along with active education, like sending phishing attacks or ransomware requests and monitoring which employees take the bait. Corporations need to keep their technical infrastructure as current as possible, even legacy platforms have patches and updates available to protect against a wide variety of threats.
     
    Technology is evolving to meet to and counter these threats. Most enterprises are implementing commercially available threat intelligence platforms and cyber analytical capabilities.  Artificial intelligence & machine learning are critical to detecting abnormalities and informing analysts for rapid remediation.
     
     
  • Sterling hit a seven-month low to the euro on Wednesday, losing ground to renewed strength in the single currency after European Central Bank President Mario Draghi hinted the days of the bank's stimulus programme are numbered.
     
     
  • Oil traded further below $47 a barrel on Wednesday after an industry report said U.S. inventories increased, reviving concerns that a three-year supply glut is far from over.
     
     
  • The difference between current and potential levels of output in the euro area economy could be greater than the European Central Bank (ECB) originally thought, its vice president, Vitor Constancio, warned on Tuesday.

    What we see, what we observe is that domestic factors of inflation starting with wage and cost developments and then also price decisions are not responding the way we would expect in view of our more common estimates of this slack. So we have to ask ourselves - are these measures of the slack of the economy correct?, explained Constancio, speaking to CNBC from the ECB Forum on central banking in Sintra.
     

    Slack in the European economy looks worse than we thought, says ECB vice president

    CNBCThe difference between current and potential levels of output in the euro area economy could be greater than the European Central Bank (ECB) originally thought, its vice president, Vitor Constancio, warned on Tuesday.
  • U.S. stock index futures pointed to a slightly lower open on Wednesday, as investors turned their attention to upcoming data releases, while keeping a watchful eye on moves in the tech and oil space.
     
     
  • Reckitt Benckiser is the latest company to come forward as a victim of the recent cyberattacks.
     
    The company says it expects some of its markets to experience delays in shipping and invoicing as a result of the attacks, Reuters reports.
     
    The company says it is working round the clock to minimise the impact of the attack and hopes to be in a position to resolve it as soon as possible, adding that it has "marshalled significant resources to rectify the situation as soon as possible".
     
    Shares dipped a little on the announcement but are now flat.
     
     
  • The virus being spread in the recent cyberattacks has been given several different names. Some experts say it is a modified version of the "WannaCry" ransomware from May this year, others say it is a modified version of "Petya", which caused problems in 2016.
     
    Cisco's threat intelligence service Talos is calling the virus "Nyetya".
     
    A new malware variant has surfaced that is distinct enough from Petya that people have referred to it by various names such as Petrwrap and GoldenEye. Talos is identifying this new malware variant as Nyetya.  
     
    Our current research leads us to believe that the sample leverages EternalBlue and WMI for lateral movement inside an affected network. This behavior is unlike WannaCry, as there does not appear to be an external scanning component. Additionally, there may also be a psexec vector that is also used to spread internally.
     
    Talos warns that the virus is able to overwrite a computer's master boot record, then forces the computer to reboot one hour after infection. This ransomware locks users out unless they agree to pay a ransom of $300 in bitcoin.
     
    (Screenshot of a computer compromised by the virus)
  • Gold prices firmed on Wednesday as the dollar struggled and shares weakened after a vote on U.S. healthcare reforms was postponed and European Central Bank President Mario Draghi hinted the ECB could trim its stimulus this year.

    Asian shares slumped on Wednesday after Wall Street was knocked hard as U.S. Senate Republican leaders delayed a vote on a healthcare overhaul on Tuesday until next month, adding to investor worries about President Donald Trump's ability to deliver on his promises of tax reform and deregulation.
     
     
  • British ministers say they are looking at creating a new body to oversee EU citizens' rights in Britain. That's according to Sky News.
  • The governor of South Africa's central bank has said that the challenges facing his country's ailing economy are now "fundamentally domestic" and will not be impacted by the tightening of monetary policy by the U.S. Federal Reserve or other advanced countries.
     
    Lesetja Kganyago told CNBC Wednesday that emerging economies, including South Africa, had formerly been heavily impacted by the quantitative easing programs of major central banks, particularly during the 2013 taper tantrum when South Africa was hit with a major outflow of capital. However, with some major economies now showing signs of growth while South Africa's remains in technical recession, he insisted that this co-dependence has no diverged.
     

    Why South Africa’s growth problem has nothing to do with the global economy

    CNBCThe governor of South Africa’s central bank has said that the challenges facing his country’s ailing economy are now “fundamentally domestic” and will not be impacted by the tightening of monetary policy by the U.S. Federal Reserve or other advanced countries.
  •  Cyber attacks like the one which hit Russia and other countries on Tuesday underline the need for a concerted international action to fight cyber crime, Kremlin spokesman Dmitry Peskov said on Wednesday.

    Tuesday's cyber attack caused no serious problems at a corporate or state level in Russia, Peskov also told a conference call with reporters. He said the Kremlin had no information about the origin of that attack.
  • Tesco to axe 1,200 jobs at its head office, that's according to a tweet from the Press Association
     
  • Shares in Tesco have jumped a percent higher on this news:​​
     
     
  • U.S. President Donald Trump has tweeted about a story in the New York Times:
     
  • U.S. stock index futures pointed to a mixed to slightly higher open on Wednesday, as investors turned their attention to upcoming data releases, while keeping a watchful eye on moves in the tech and oil sectors.

    On the data front, mortgage applications are due out at 7:00 a.m. ET, followed by international trade in goods at 8:30 a.m. ET, and pending home sales at 10:00 a.m. ET.
     
     
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