World Markets Live - June 5 - CNBC Live Events

CNBC Live Events

World Markets Live - June 5

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

    Mihir Kapadia – CEO and Founder of Sun Global Investments, analyses the move in global markets:
    On Friday, US stocks shrugged off the day’s softer-than-expected non-farm payrolls report for May to hit new peaks. The S&P 500 and Dow Jones climbed 0.37% and 0.29% on Friday, though the Nasdaq Composite outperformed with a 0.94% gain on rallying technology stocks.
    Asian stocks are mostly weaker again by led by China.  Many Europeans markets are closed today due to a religious holiday but sentiment is weak in those markets that are open.
    The US economy added a net 138,000 jobs last month, well below the 185,000 consensus forecast, while the two previous increases were revised down by a combined 66,000. Average hourly earnings firmed an in-line 0.2% in May, which does not indicate a developing wage-price inflation spiral. The Unemployment Rate fell by 0.1% to 4.3% but this not positive for the economy as it reflects a decline in the participation rate.
    The soft payrolls numbers does not derail the widely anticipated 25bp rate hike at the June 13-14 FOMC meeting but there is a greater question about rate cuts later in the year should the jobs data continue to be softer than previously anticipated. September tightening prospects have receded a little, alongside the chances of the Fed beginning balance sheet reductions that month.  
    Friday’s move capped off a positive week and May was a positive month as well, as the strong rally in US stocks (especially the Nasdaq) continues. The soft jobs number led to a rise in Treasury Bonds and Treasury yields tumbled to seven month lows. The 10 year is at 2.17%. Oil is up 1% as four Arab countries led by Saudi Arabia cut ties with Qatar. The diplomatic standoff from the four major gulf states has also sent the Qatari stock market tumbling by 8%, its biggest slump since the financial crisis.

    This week sees the UK election on Thursday with results set to be announced by early Friday. Although the markets have calibrated for a Theresa May led Conservative victory, it could be a close contest as most pollsters narrowing the gap between the parties. A hung parliament would be difficult on the markets and the pound. There is also the ECB interest rate decision on Thursday where no change in interest rates is expected.
    British PM May says national threat level remains at severe, police have put additional security measures in place.
    May says now clear that victims came from a number of nationalities. 
    Saudi Arabia and three other nations broke diplomatic relations with Gulf Arab state Qatar on Monday, pointing to Doha's ties to terrorism and the need to maintain national security.
    Riyadh ended all land sea and air contacts with Qatar, and the United Arab Emirates, Bahrain and Egypt also cut ties with Doha on Monday. The coordinated move dramatically escalates a simmering dispute over Qatar's support of the Muslim Brotherhood, the world's oldest Islamist movement, and adds accusations that Doha even backs the agenda of regional arch-rival Iran.

    Saudi Arabia, Bahrain, UAE and Egypt cut diplomatic ties with Qatar

    CNBCSaudi Arabia broke diplomatic relations and all land sea and air contacts with fellow Gulf Arab state Qatar on Monday, citing terrorism.
    U.S. stock index futures were expected to open little changed on Monday morning as traders paused for breath after various benchmark indexes hit record highs in the previous session.

    Monday will see services PMI data for May released at around 9:45 a.m. ET, while ISM non-manufacturing data for May and factory orders for April are both scheduled for 10:00 a.m. ET.

    On the earnings front, Coupa Software and Thor Industries are both due to report after the market close.
    U.K. May's spokeswoman says government working closely with police on election security, robust plans have been in place for weeks. 
    The spokeswoman also says May and ministers were updated at emergency committee meeting on the live and fast moving investigation. That's according to Reuters.
    Trump says U.S. justice department should have sent "original travel ban, not the watered down, politically correct version" to Supreme Court.
     Gold hit a six-week high on Monday, buoyed by disappointing U.S. jobs data on Friday that dimmed the prospects for an aggressive run of interest rate increases in the world's biggest economy.

    U.S. job growth slowed in May and employment gains in the prior two months were not as strong as previously reported, suggesting the labour market was losing momentum.

    Higher interest rates put pressure on gold prices by increasing the opportunity cost of holding non-yielding bullion.
    Trump, in tweet, says justice department should seek an expedited Supreme Court hearing of his proposed "travel ban" and "seek much tougher version"
    Ethereum, an alternative cryptocurrency to bitcoin, hit a fresh record high on Sunday, amid continued interest in the digital asset space and increased trade from Asia.

    On Sunday, ethereum traded at an all-time high of $250.41, according to data from industry website CoinDesk. This is up 2,839 percent from the $8.52 handle it had on January 1. Ethereum was trading at around $246.62 on Monday morning, slightly off its record high.

    Bitcoin rival ethereum hits another record high, marking a more than 2,800% rally this year

    CNBCContinued interest in the underlying blockchain behind ethereum has led to support from big companies such as Microsoft.
    There is a lot of U.S. economic data being released today to provide some clues on the progress of the U.S. economy. 
    At 8:30 a.m. ET, we'll have the revised reading of Q1 productivity and costs. The preliminary reading released in June saw first quarter productivity decline 0.6 percent and unit labour costs increase 3 percent.
    At 9:45, we'll see the services PMI reading for May.
    Then at 10:00, we'll get the ISM non-manufacturing index reading for May. In April, the index came in at 57.4 and prices rose to 57.6. The May reading's are forecast to fall to 56.5 and 56.0 respectively.
    At the same time, we'll have April factory orders data. It is forecast to have fallen 0.2 percent, from a rise in March of 0.9 percent.
    On the earnings front, we can expect results from Coupa Software and Thos Industries after the bell.
    The U.S. markets will open in a couple of hours. Stocks are seen opening marginally lower, according to future values.
    This is likely to be caused by profit-taking after stock indexes closed at all-time highs on Friday.
    Wall Street raised stocks to record levels after shrugging off a disappointing jobs report on Friday, which showed only 138,000 jobs were created in the previous month, well below the expected 185,000.
    U.K. opposition leader Jeremy Corbyn has called on Prime Minister Theresa May to resign for presiding over cuts to the country's police force. 
    He says May should never have cut the police numbers, according to Reuters reports citing Sky TV.
    Statistics show police officer numbers in England and Wales have fallen by 19,000 since the Conservatives came to power in 2010.
    Qatar has asked its citizens in the United Arab Emirates to leave the country within 14 days to comply with a UAE decision, according to Reuters.
    The UAE, along with Saudi Arabia, Bahrain and Egypt have severed diplomatic ties with Qatar.
    Roche shares are trading flat, recovering from earlier falls, on result of drug trials showing new treatments showed modest benefits in combating breast cancer and lung cancer. 
    Sterling was hit by losses caused by disappointing PMI data this morning, but has recovered after polling data showed the Conservatives with an 11 point lead ahead of this week's general election.
    The poll lead should be good news for Conservative Prime Minister Theresa May. However, she is facing calls to resign from her main election opponent Jeremy Corbyn, as well as from Steve Hilton, the policy adviser to her predecessor David Cameron.
    Meanwhile, Morgan Stanley has cut its long-term forecast for the U.K. currency. It no longer sees cable reaching $1.45 next and instead expected $1.26 to be the high for 2018.
    Sterling is currently trading around $1.29.
    We're into afternoon trade now. The pan-European Stoxx 600 is down around 0.16 percent.
    The basic resources and travel & leisure sectors are leading the market lower. Here's a look at how the individual major European bourses are performing. German stock exchanges are closed due to a holiday today.
    Today marks the start of this year's Apple Worldwide Developers Conference, which will run until Friday at the San Jose Convention Center in California.
    The yearly conference, which has been held every year since 1988, will feature a keynote speech from Apple CEO Tim Cook. 
    Analysts are keen to see what big announcements and new products the tech giant may launch.
    Ben Wood, chief of research at CCS Insight, told CNBC some expected announcements include updates to various operating systems and a Siri-powered smart speaker.
    We believe that there also needs to be a significant update on Apple’s vision for artificial intelligence, particularly given the recent announcements from Facebook, Google and Microsoft in this area.
    As it gets harder to differentiate on smartphone hardware alone, all eyes will be on how Apple evolves its services business given the strong growth in the area at present. With over 165 million subscriptions to its various services and associated revenues of more than $7 billion per quarter, it is clear this is an area Apple is extremely focused on as a means to keeping customers locked into Apple devices.
    U.S. first quarter unit labor costs are revised to 2.2 percent from a preliminary reading of 3 percent. This was less than the 2.4 percent expected.
    U.S. Q1 productivity was revised to unchanged, from a preliminary reading of a fall of 0.6 percent.
    Analysts will be playing close attention to the Apple Worldwide Developers Conference, which starts today until Friday. Ben Wood, chief of research at CCS Insight, told CNBC people will be hoping for clues concerning the next iPhone.
    Everyone will be studying the updates Apple showcases related to iOS in an effort to decipher any clues as to what the next iPhone will look like. Apple has a huge amount riding on its latest spin of its record breaking smartphone and expectations are ridiculously high as this device coincides with the 10th anniversary of the first iPhone being launched.
    Meanwhile, Angelo Zino, equity analyst at CFRA, says the latest versions of iOS and macOS will be unveiled.
    While little has been discussed about potential enhancements to the operating systems, we expect to once again see significant updates to Siri. According to an unconfirmed MacRumors report, it is believed that Siri could get much "smarter" by gaining contextual learning abilities and deeper integration with iMessage and iCloud in iOS 11.

    We also anticipate updates to the watchOS and tvOS. AAPL is expected to implant Siri deeper into the Apple TV and Apple Watch experience among other things.
    However, Zino was skeptical that a Siri-powered voice assistant will be revealed.
    We see a less than 50 percent chance of AAPL releasing a Siri-based home speaker system, which will compete against Amazon's popular Echo that is based on its Alexa virtual assistant.
    We believe AAPL will look to gain a competitive advantage over Google and Amazon through enhanced sound quality (likely including Beats technology) and could look to have a touch panel display embedded on the device.
    Ahead of the conference kicking off in California, Apple shares are heading lower in premarket trade.
    Last week, YouTube attemped to tackle the issue of advertising appearing with inappropriate content by introducing new guidelines.
    Gabrielle Guillemin, senior legal officer at ARTICLE 19, a British human rights organization which focuses on defending freedom of speech told CNBC the move by YouTube was not surprising, but could create problems.
    This isn't a surprising move by YouTube. In terms of freedom of expression, advertising can be subject to greater restrictions because it is commercial speech. And advertisers are entitled to object when their ads are placed next to "hate speech".
    The concern, however, is that platforms like YouTube will be too ready to deem certain types of content objectionable, and so prevent videos or content producers which express legitimate but controversial points of view from obtaining revenue from ads.
    For more on this story, click here.

    YouTube attempts to tackle thorny issue of advertising and hateful content

    YouTube has released new guidelines in an attempt to prevent brands being associated with offensive or inappropriate content.
    U.S. markets dip to the downside in cautious opening trade, as future values predicted.
    U.S. markets are slipping lower at the beginning of Monday trade, following hitting record levels on Friday. They are down for the first session in three.
    Here are the stocks at the top and bottom of the Dow Jones index. Apple is leading the losers; the tech firm starts its Worldwide Developers Conference today.
    Financial stocks are performing well today. This is unusual as technology and consumer cyclicals have been among the biggest gaining sectors this quarter, while banks and energy sectors are down this quarter.
    Let's take a look at the winners and losers on the S&P 500.
    Egypt's Civil Aviation Ministry has announced it will halt flights to and from Qatar from Tuesday. The country will also ban flights originating from Qatar to enter Egypt's airspace, according to reports.
    Apple shares are dragging on the Dow this morning. Shares in the tech giant are down more than 1 percent, placing it at the bottom of the index. This comes after Keybanc Pacific West cut its rating for the shares to sector weight from overweight.
    The final reading for U.S. services sector PMI for May falls to 53.6 from a flash reading of 54.0, while the final reading for the new business index came in at 54.6, versus a flash reading of 54.7. 
    The service sector PMI is at its highest since February, while the new business index is at its highest since January.
    The composite PMI reading for May came in at 53.6 versus a preliminary reading of 53.9.
    The U.S. ISM non-manufacturing business activity index for May came in at 60.7, below forecasts of 62.0 and 62.4 in April.
    The prices paid index fell to 49.2 in May, versus 57.6 in April. This is the first time is was below 50 since February 2016.
    Meanwhile, the new order index fell to its lowest since November 2016, hitting 57.7 for May versus 63.2 in April.
    We also got April's U.S. factory orders, which fell 0.2 percent, versus growth of 1 percent in March.
    President Donald Trump is doubling down on his criticism of London Mayor Sadiq Khan this morning.
    This follows a tweet on Sunday where Trump referred to an earlier statement by Khan, in which the mayor told citizens that "Londoners will see an increased police presence today and over the course of the next few days. There's no reason to be alarmed."
    What was Khan's response to the President's earlier tweet? A spokesman for the mayor said Khan "has more important things to do than respond to Donald Trump's ill-informed tweet that deliberately takes out of context his remarks". 

    London Mayor Sadiq Khan brushes aside Trump's broadside on London Bridge attack as 'ill-informed'

    Donald Trump tweeted, "At least 7 dead and 48 wounded in terror attack and Mayor of London says there is "'no reason to be alarmed!'"
    More than an hour since U.S. markets opened and the major stock indexes remain flat.
    Meanwhile, the VIX volatility index remains at multi-month lows below 10.
    Qatar is under pressure as neighbouring countries in the Middle East cut off diplomatic ties to country, as well as reports of travel bans and banks ceasing business with Qatar.
    Anthony Skinner, director at global risk consultancy Verisk Maplecroft, says Qatar is unlikely to be able to resist this pressure from the Saudi-led alliance.
    The move is aimed to force Doha to end support for subversive and in many cases violent Islamist groups in the region, toe the GCC line on Iran and fully muzzle the state-funded Al Jazeera media network. 
    Verisk Maplecroft believes that the regional diplomatic isolation and immense pressure faced by Doha due to the suspension of sea and air travel from neighbouring states will at the very least force it to partially shift course.
    Skinner says Qatar will be forced to make concessions due to the measures being used against it. These measures could be intensified by its neighbours.
    While the six Arab authorities are looking for Doha to fully submit, international mediation by the United States may instead bring about big and meaningful concessions from Qatar but possibly not a full reversal in policy.
    The United States, which has a vested interest in encouraging greater cohesion within the GCC and which enjoys largely good relations with Qatar, is stepping up to the plate. Although Washington claims the crisis will not adversely impact the war against Islamic State, it is unclear how the US-led air campaign will be unaffected by Saudi, Bahraini and Emirati barring their military representatives from visiting the forward headquarters of the US Central Command in Qatar. Qatar is also host to Al Udeid Air Base. 
    European stocks are now closed. The Stoxx 600 has finished the session down 0.15 percent.
    The pan-European Stoxx 600 index finished with a small loss, but the individual European bourses were much more volatile at the start of the week. Some markets, including the German DAX, were closed due to a public holiday.
    Looking at the individual sectors, banks, utilities and household goods recorded small gains. Travel & leisure and basis resources were the biggest falling sectors.
    Here's a look at today's winning and losing stocks. Click or tap on the arrows to switch between charts.
    Before we go, another look at U.S. markets, where the major exchanges remain subdued and are slipping lower.
    We'll close the blog there. We are waiting for President Donald Trump to make an announcement regarding plans for infrastructure and the need for change to travel laws.
    Join us tomorrow as we report on those announcements and continue our coverage in the build-up to the U.K. general election.
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