World Markets Live - June 6 - CNBC Live Events
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CNBC Live Events

World Markets Live - June 6

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

  •  
    John Mills is a successful entrepreneur and Labour-affiliated campaigner for Brexit.
     
    He says Britain needs a clean exit from Europe before negotiating a fresh trading relationship with Europe's remaining 27 countries.
     
    On Jeremy Corbyn's campaign to be the next U.K. prime minister he says he isn't the type of leader he would typically back but he understands his appeal.
     
    He has given people hope and has successfully spread his message to a large number of people.
     
    On corporation tax, Mills argues that Corbyn's proposal isn't that far away from European countries.
     
    Mills also qualifies his comments by issuing caution over Labour's budget promises.
  • Analysts at Russia's central bank are predicting higher inflation growth in the second half of this year.
     
    The key rate of lending in Russia at the moment is 9.25 percent.
     
     
  • The ECB's latest monetary policy decision is due on Thursday. The European Central Bank is expected to acknowledge the improving European growth outlook, but it is not seen moving on interest rates. 
     
     
    Mike Bell, Global Market Strategist at the J.P. Morgan Asset Management says a "little less dovish" might be as much as you can expect this month from MArio Draghi and his team.
     
    I think they will be a little bit more balanced in the outlook and that might pave the way for tapering to begin at the end of the year.
     
    Bell says Draghi will want to quash any notion that they are soon set to raise interest rates.
     
    He says the euro going higher against the dollar, which is a JP Morgan base case, is sustainable by European member countries.
     
     
  • Following the decision to cut diplomatic ties with Qatar the port authorities at UAE and Bahrain have put restrictions on ship movement according to a report by Platts.
     
    The S&P Global firm said the move will have implications on crude and oil product loadings in the Middle East and could push up prices elsewhere.
     
    Prices are lower today as traders interpret that tension in the Middle East could result in a collapse of the currently agreed OPEC supply cap.
     
     
  • U.S. government debt prices were higher on Tuesday morning as investors awaited the release of key economic data and Treasury auctions.

    The yield on the benchmark 10-year Treasury note, which moves inversely to price, was lower at around 2.1573 percent, while the yield on the 30-year Treasury bond was also lower at 2.8160 percent. 

    On the data front, Job Openings and Labor Turnover Survey (JOLTS) data for April are released at approximately 10 a.m. ET/ 3 p.m. London time. The U.S. quarterly financial report for the first three months of the year is also due at around the same time. 
     
    Tuesday will also see the auction of around $40 billion in 4-week bills.
     
     
  • The dollar has hit a seven-week low against a basket of currencies.
     
    This another trade in relation to looming risk events relating to Brexit, Russian/US relations and European growth.
     
     
  • Gold has scraped to its highest level in almost seven weeks as the dollar slips on a risk-off trade.

     
    Risk events are all concentrating on Thursday this week. In the United Kingdom, the election has gone from a sure-fire Conservative win to the possibility of a hung parliament.
     
    The European Central Bank also meets and some believe the bank will remove some of its dovish commentary in its statement. That would likely be euro positive. Conversely, a maintaining of Draghi's dovish theme could see the euro slip.
     
    Finally, the former FBI Director James Comey will testify in front of US Congress and comment on whether President Trump wanted him to stop investigating his connections to Russia.
  • London Mayor Sadiq Khan has voiced his opposition to President Trump making a state visit to the UK. The Labour Party politician has spoken out against the planned trip following a high-profile spat between himself and the American president. Donald Trump took to Twitter to criticize Sadiq Khan's response to the London Bridge terror attack.  
     
    Trump has attacked the Mayor of London over his terror attack response.
     
    UK Foreign Secretary Boris Johnson has said the state visit invitation to President Trump has been issued and accepted, and that he sees no reason to rescind it.
     
    Asked about the President's tweets criticizing Khan in the aftermath of the terrorist attack, Johnson defended Khan, saying the mayor was right to reassure Londoners about the presence of armed police on the streets.  
  • U.S. equities closed slightly lower on Monday, but held near record levels, while shares of Apple declined on a rare downgrade.
     
    The S&P 500 slipped 1 percent, with materials and utilities lagging. The Dow Jones industrial average fell about 20 points, with Apple contributing the most losses. The Nasdaq composite traded 0.1 percent lower after reaching an all-time intraday high.
     
    The futures market suggest a mixed open when trading resumes at 09:30 a.m. ET/2:30 p.m. London time.
     
    Time for a breather?
     
  • The European Commission has said it is to open a formal investigation into the clothing group, Guess.
     
    The U.S. firm stands accused of banning retailers from selling products across national borders within the euro zone.
     
    That would contravene single market rules.
     
     
  • U.S. backed Kurdish and Arab forces have announced the start of a battle to take control of the Islamic State stronghold of Syria.
     
    The U.S. led coalition commander said in a statement that the fight for Raqqa will be "long and difficult".
     
    Google Maps
     
  • A Moroccan-Italian known as Youseff Zaghba has been named as the third attacker in the London Bridge attack.
     
    UK police say Zaghba was a 22-year old from East London who was not of interest to them or MI5.
     
    The Italian newspaper Corriere della Sera earlier reported that Zaghba was stopped at an airport in 2016 when flying to Syria and his presence had been tipped off to U.K. authorities. 
     
    The other two men had already been identified as Khuram Shazad Butt and Rachid Redouane.
     
    All three men were shot dead by security services on Saturday night.
     
    British police say they have also carried out a further arrest today of a 27-year old man in Barking, East London.
  • The United States Ambassador to the United Nations, Nikki Haley has told the Human Rights council that President Trump is "looking carefully at this council and our participation in it".
     
    Yesterday Haley tweeted that the U.S. wanted to discuss reform.
     
  • European markets have moved lower this morning amid a political rift between Qatar and several other Arab countries, the lead up to Thursday's general election in the U.K. and a European Central Bank (ECB) meeting on the same day.
     
    Sitting in negative territory.
     
  • How will markets react to the results of the U.K. general election later this week?
     
    John Wyn-Evans, head of investment strategy at Investec Wealth & Investment, says the pound will be the main measure of market sentiment.
     
    The more uncertain the outlook for Brexit negotiations, the further it falls, thanks to the fact that the U.K. continues to run a large current account deficit, and funding it becomes more difficult against a background of uncertainty.
     
    However, the asymmetric downside risk to sterling that we identified (and insured against) ahead of last year’s referendum is nothing like as extreme this time because the pound has already fallen a long way and is generally considered to be better value. 
     
    A weaker pound would provide a boost for large cap stocks, which tend to be internationally focused with lots of overseas earnings, while small and mid caps stocks, which tend to be domestically focused, would take a hit.
     
    U.K. gilts may benefit as a safe-haven investment, but could take a hit if Labour is exceptionally successful due to the party's "tax and spend" plans, according to Wyn-Evans.
     
    Putting all this together, we find it difficult to make a case for specific evasive action ahead of Thursday, especially as the betting markets still find a decent Conservative majority to be the most probable result. If not, our existing exposure to non-UK assets will provide a decent cushion. 
     
     
     
  • The U.K. general election takes place on Thursday, with the results coming in over night and through Friday morning.
     
    The pound will come under pressure, U.K. focused stocks will take a hit and gilt values will rise, according to Tom Elliott, deVere Group’s International Investment Strategist.
     
    I believe that there’s a 55 percent chance that the Conservatives will have a majority of ‎below 60.  Should this happen, sterling would wobble, and would fall sharply if that majority is below 40 and Theresa May is again beholden to the hard Brexit lobby of Tory MPs. FTSE 100 would rally as sterling falls, U.K.-focused stocks weaken and gilt prices would rise (and yields fall) in anticipation of a weaker economy.
     
    Anything below 25 and Mrs May's job would be on the line, with a leadership contest beckoning. Sterling would then fall further as the risk of a hard Brexit PM, such as David Davis, is priced in.  Capital markets would become very volatile
     
     
     
  • Perceived wisdom would dictate elections shouldn't really have a large impact on M&A activity. These deals take long periods of time, require months of planning and CEOs try to avoid making kneejerk decisions based on politics.
     
    But despite this perceived wisdom, recent history shows merger and acquisition activity has increased after U.K. general elections, says Eddie Dunthorne, PR specialist of financial & risk content at Thomson Reuters.
     
    More M&A deals involving a U.K. target were announced immediately after the last two U.K. general elections than immediately before.  In 2015, 4 percent more deals were announced during the 90 day period after the election than in the 90 days before, and in 2010 there was an 8 percent increase. 

    An increase in the number of U.K. Outbound M&A deals was seen after the last 3 U.K. general elections. Twenty-three percent more deals were announced in the 90 day period after the 2005 election than during the 90 days immediately before.  In 2010 there was a 25 percent uptick and in 2015 there were 47 percent more deals.

    The number of both U.K. target and U.K. outbound M&A deals increased after the change of government in both 1997 and in 2010.
     
    M&A activity following the Brexit vote last year was the second  highest level in 9 years. So far this year, announced M&A involving the U.K. totals $163.5 billion.
  • We're halfway through the Tuesday trading session and European markets are in decline. The Stoxx 600 is down two thirds of a percent.
     
     
    The insurance, health care and chemicals sectors are dragging on the market, leading to the decline.
     
     
  • Just the one big piece of economic data coming from the U.S. economy today.
     
    We'll have the April JOLTS report, the Job Openings and Labor Turnover survey, at 10:00 a.m. ET.
     
    Previously in March, there 5.742 million job openings, and a quit rate of 2.1 percent. A job openings number of 5.8 million is forecast for today.
     
    There is a bit of earnings activity to keep an eye on. Before the bell we'll get results from HD Supply Holdings and Michaels. After the bell, Ambarella and Dave & Buster's will post their latest earnings.
  • Troubled Spanish lender Banco Popular shares are having a hard day. The shares earlier hit a session low, down 10.4 percent. The bank's shared opend the session down sharply after Barclays cut its price target to 0.45 euros.
     
    On the other hand, even that price target represents an almost 50 percent recovery from these current lows. The bank's share price has dropped 55 percent over the past 14 days.
     
     
  • With several Middle East countries cutting off diplomatic and business ties with Qatar, President Donald Trump has tweeted about the story.
     
  • Ildefonso Guajardo, Mexico's economy secretary, is speaking on CNBC about trade talks with the U.S. and how to modernise NAFTA.
     
    He says U.S. and Mexican negotiators were working on technicalities overnight and are set to announce a deal concerning sugar.
     
    He says uncertainty over NAFTA is not good for investors, and says Mexico is not being used as a back door for Chinese goods.
     
    Gujardo adds that if NAFTA fails, Mexico can still export cars to the U.S. with a 2.5 percent tariff.
     
     
  • President Donald Trump is hitting out at the mainstream media today on Twitter, saying it is trying to stop him from using social media.
     
     
    This after his advisor Kellyanne Conway told Monday's "Today Show" that the media is too obsessed with his tweets, while denying that Twitter was Trump's chosen way of communicating.
     
    The president has a busy day ahead. In the morning he is meeting his national security advisor, then in the afternoon will be meeting with the House and Senate leadership, following by signing a bill in the Oval Office, then a dinner with members of Congress.
  • The digital crypto currency bitcoin continues to make huge gains. It has set a new record, breaking above $2,900 today.
  • Germany's Chancellor Angela Merkel has ruled out tax rises if she is re-elected, saying she plans to offer Europe's biggest economy tax relief in her next parliament.
     
    "In the next legislature period we do not want any tax increases, but rather we believe we can take a step towards income tax relief," she told the IHK Chambers of Commerce in Greifswald today, according to a Reuters report.
     
     
     
    During her speech, she said she is open to talks about a free trade deal with the U.S. and said protectionism is damaging. However, she said EU and U.S. trade talks should wait until after September's German elections.
     
    On the topic of the European Central Bank, which meets later this week, she said low interest rates make business challenging for German banks, but added she cannot judge ECB policy.
     
    Germany will be going to the polls in September.
  • U.S. markets slipped yesterday, coming off Friday's record highs. Future values predict the markets will continue to fall today once they open in around 45 minutes. The indexes were down for the first session in three.
     
     
  • Apple revealed its "HomePod" at its Worldwide Developer Conference yesterday. The device is a music speaker and home assistant to rival with similar products from Amazon and Google.
     
    Geoff Blaber, VP of research for the Americas at CCS Insight, the product announcement marks the start of the "AI wars".
     
    It is little surprise that Apple has decided to launch a smart speaker. It can’t afford to yield valuable real-estate in the heart of people’s homes to Amazon, Google and others as access to content, information and search becomes pervasive and less dependent on the smartphone.

    Apple’s HomePod speaker casts fresh focus on Siri and will draw inevitable comparisons with the AI smarts of Amazon, Baidu, Google and others. This is the product that will measure Apple's progress and whether its stance on privacy hinders its machine learning endeavours.

    As the iPhone reaches a point of near saturation in mature markets and replacement rates continue to slow, Apple must find new ways to lock in users. Adding a smart speaker into people’s homes creates a further touch point for consumers and a valuable gateway to Apple services.
     
     Despite the reveal, Apple shares dropped a percent yesterday and are trading flat in premarket trade.
     
     
  • Following his success in the presidential elections, French President Emmanuel Macron looks set for further victory in the legislative elections.
     
    His party La Republique En Marche is seen winning 29.5 percent of the vote in the first round of the elections, compared to 23 percent for the Republicans and 17 percent to the National Front, according to a Sopra Steria poll.
     
     
    In the second round, his party is seen winning 385 to 415 seats, compared to 105 to 125 seats for the Republicans, according to polling data.
     
    This would give Macron this biggest majority since Charles de Gaulle in 1968.
     
    The first round of elections to the French parliament take place on June 11, the second round on June 18.
  • Stock markets have opened lower in the U.S. on Tuesday. All indexes are down for a second session.
     
     
    Markets are focusing on macro-economics, such as the oil price in light of the Qatar situation, the upcoming ECB meeting, the U.K. general election and next week's Fed decision meeting.
  • This the biggest fall for stocks in almost three weeks. The Dow is lower for the fifth time in seven sessions.
     
    Let's take a look at the stocks at the top and bottom of the Dow. Apple is up at the top of the index after making several announcements at its conference yesterday.
     
    The Dow is down more than 50 points today.
     
  • President Donald Trump seems to be taking credit for the Saudi-Arabian led decision by Middle East countries to cut off ties with Qatar over concerns it is funding terrorism.
     
    This follows a tweet earlier this morning. 
  • The S&P and Nasdaq are also lower, trading down for the fourth time in six sessions. Here's the top and bottom stocks on both indexes.
     
  • Shareholders of General Motors have rejected activist investor David Einhorn's plans for the company.
     
    Shareholders elected GM's nominees for the board, rejecting the three candidates chosen by Einhorn. They also rejected his plan to split GM stocks into two classes: one for appreciation, another for dividends.
     
    Einhorn's Greenlight Capital hedge fund owns 3.6 per cent of GM.
     
    Share prices of GM are creeping lower on the news, down almost half a percent. Over 3 months, shares are down more than 10 percent.
     
     
  • The April JOLTS report is in. The number of job openings increased to 6.044 million in April, from 5.785 million in March, according to the Labor department. This was above expectations.
  • U.S. bond yields hold steady after the JOLTS data.
     
    Yields have been falling through the day as investors pile into safe-havens such as treasuries and gold. Investors are concerned about several events taking place this week: the ECB policy meeting, the U.K. general election, and former FBI director James Comey's testimony before a Senate panel.
     
    Yields are at their lowest level since November.
     
     
  • The number of job openings increased to 6.044 million in April, a record high.
     
    Hires decreased to 5.1 million and separations edged down to 5.0 million. The quits rate remained steady at 2.1 percent. There was 1.6 million layoffs and discharges that month, equivalent to 1.1 percent.  
     
    According to the report, the number of layoffs was unchanged for the private sector, but increased for the government sector by 32,000.
  • A man has attacked a police officer with a hammer near the Notre-Dame cathedral in Paris.
     
    French police have shot and injured the man, and warned the public to stay away, according to Reuters.
  • Less than half an hour to the close of European markets and the Stoxx 600 remains weak, down almost 0.7 percent.
     
     
     
  • Markets are currently pricing in a result of a Conservative majority in the U.K. general election later this week. 
     
    While a Labour-led government is an outside risk, it's worth considering how market might react to unexpected results. In the event of a hung parliament, the pound will initially suffer, according to Jordan Rochester at Nomura.
     
    While we still view the likelihood of the Labour manifesto being implemented as a tail risk, it is one that should not be completely dismissed. Our view is that Gilt yields would head higher on a Labour victory based on a) fiscal easing lifting growth and inflation expectations, b) more substantial levels of issuance and c) Brexit expectations moving to the softer end of the scale.
     
    So while we believe a (unexpected) Labour victory would lead to higher yields, if this does materialize we think it would be marked by very volatile ranges in Gilt yields with the currency initially trading weaker before eventually recovering in the following weeks.
     
    The U.K. currency is currently trading flat against the dollar, moving around the $1.29 handle.
     
     
  • "The spectre of hung parliament looms over markets."
     
    That's according to Hartwig Kos, vice-CIO and co-head of multi-asset at SYZ Asset Management. 
     
    The U.K. goes to the polls on Thursday to take part in a general election. A hung parliament could result if none of the main parties secure a majority of at least 326 seats. The result of a hung parliament would be a minority government (which would struggle to get policies passed into law) or a coalition of several parties (which are generally unstable and have a poor track record with the British public). Here are Kos's thoughts on the topic.
     
    When calling the upcoming general election back in April, Theresa May possessed a lead in the polls amounting to 100 extra Tory seats in parliament. If this result occurs, she will be able to start negotiating with the U.K.’s European counterparts on Brexit terms in a more flexible way. However, according to polls, the projected majority of 100 seats is fast shrinking. Given the tactical mistakes May made in the run up to the election, the chances are high she might only lead with a majority of 30-50. This will meaningfully reduce her negotiation flexibility on Brexit. 
     
    The market is now coming to terms with the fact the election result might be much narrower than initially thought. As a consequence, sterling, the pressure valve of the U.K., has witnessed pronounced weakness in recent weeks. UK equities should continue to enjoy the weaker currency, as many large-cap UK-listed stocks have strong dollar-based earnings.
     
    The FTSE 100 is currently flat, but has been fairly volatile in recent sessions. A poor result for the Conservatives would weaken sterling, but the stocks on the FTSE 100, which often earn overseas, would get a boost.
     
     
  • European markets are now closed. The Stoxx 600 fell sharply during Tuesday's session, finishing down 0.71 percent. Macro concerns regarding the Middle East, the ECB policy meeting and the U.K. general elections weighed on markets.
     
     
     
     
     
  • The individual European bourses had a more mixed performance. The U.K. FTSE 100 finished flat, while the Portuguese and Italian indexes recorded gains.
     
     
     
  • One last look at U.S. markets before we go. The indexes have pared losses suffered at the opening of trade, but remain in the red.
     
     
  • We'll close the blog there. Thanks for reading and join us again tomorrow as we recap the latest announcements from the Apple Worldwide Developers Conference as well as the latest news regarding the U.K. general election, plus all the breaking news and market moves.
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