World Markets Live - May 11 - CNBC Live Events

CNBC Live Events

World Markets Live - May 11

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

    Good morning and welcome to World Markets Live. We'll begin full blog coverage from 0600 BST. For now, here are the opening calls for European markets.
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    These are the top headlines this morning.
    • Crude prices mark their best gains of the year, boosted by a big drop in U.S. inventories and reports that more Middle Eastern producers are supporting Saudi Arabia in extending supply cuts.
    • Oh Snap. Shares in the social network plunge 25 percent in extended trade after Snap used its IPO to spend $2 billion on compensation, widening net losses. 
    • ECB President Mario Draghi gets a drilling in Dutch parliament as he is forced to defend central bank policies, transparency and the future of the euro.
    • President Donald Trump says his meeting with Russian foreign minister Sergei Lavrov was 'very, very good', despite tough questions about the shock firing of FBI director James Comey.
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    Oil prices rose more than 3 percent on Wednesday, bolstered by the biggest one-week drop in U.S. inventories so far this year, according to Reuters.

    The U.S. Energy Information Administration revealed crude oil inventories fell 5.2 million barrels last week, greater than the 1.8 million-barrel fall analysts forecast.  

    Meanwhile, Iraq and Algeria joined Saudi Arabia in supporting an extension to OPEC supply cuts, which further supported oil prices.
    The price rise pulled Asian stocks higher, especially shares in the energy sector.
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    It's another busy day for earnings.
    Deutsche Telekom results are out. The firm says Q1 sales grew 5.8 percent to 18.646 billion euros, slightly lower the forecast. The company confirmed its 2017 outlook.
    Net profit for the quarter was 791 million euros.
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    Deutsche Post confirms its full year EBIT target for 3.75 billion euros.
    First quarter revenues came to 14.9 billion euros. EBIT came to 885 million euros, slightly lower than Reuters poll forecasts of 915 million euros.
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    CNBC's Geoff Cutmore discusses the trend of telecom and tech companies trying to reinvent themselves as media companies.
    The problem with that central space that they are all crowding into now is that they’re all crowding into it.
    Facebook’s launching a TV channel. Amazon as we know is busy, Netflix is busy, then you’ve got BT crowding in there.
    Everybody who thinks that the telecom revenue stream could be rolling over is trying to get into the content market and I don’t know about you but I just don’t have enough hours in the day to sit around and watch another episode of Vikings.
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    Unicredit reports Q1 net profit of 907 million euros. That's versus expectations of 612 million euros forecast by analysts.
    First quarter revenues came to 4.8 billion euros, versus 4.56 billion forecast. The bank's fully-loaded CET 1 capital ratio rose above 12 percent.
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    Mario Draghi will be heading to the G7 meeting in Bari today, following a bruising exchange with Dutch lawmakers.
    The ECB president was forced to justify the central bank's policy, particularly QE, as members of the parliament in the Hague argued that it had hurt pensions in their country.
    Mario Draghi poses for cameras while visiting the Senate in The Hague.
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    During his bruising trip to The Hague, Mario Draghi had to defend the single currency from eurosceptic MP Thierry Baudet.

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    Crude oil enjoyed its best one-day gain of the year in yesterday's session. Prices are continuing to rally today. 
    However, year-to-date oil prices remain about 11 percent lower.
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    Wall Street yesterday mostly shrugged off the concerns caused by President Trump firing FBI Director James Comey. 
    The S&P and Nasdaq posted gains. The Nasdaq is now on a five-session winning streak and posted another record close.
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    The Senate Intelligence Committee, which is investigating possible links between the Trump campaign and Russia, has subpoened Michael Flynn.
    It has ordered the former National Security Advisor to hand over documents it believes may be relevant to the probe. According to an NBC News report, the committee requested the documents last month but Flynn refused unless he was granted immunity.
    This is the first time the Intelligence Committee has issued a subpoena since the inquiry into the September 11th terrorist attacks.
    (Former NSA Michael Flynn)
    Meanwhile, former FBI Director James Comey requested more resources for the agency's investigation into Russian election interference only days before he was fired - according to multiple reports.  
    A Justice Department spokesperson told NBC News that the reports were "absolutely false."
    (Former FBI Directors James Comey)
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    President Trump met with Russian Foreign Minister Sergei Lavrov in the White House, in the highest-level in-person meeting between Trump and the Russian administration since he took office.  
    No U.S. press were allowed in the meeting but a Russian state news photographer recorded the only images of the event.
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    Henkel reports Q1 sales grew 4 percent on an organic basis to 5.06 billion euros.
    The company confirmed its outlook for the current fiscal year. For the first quarter, it reported adjusted EBIT of 854 million euros.
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    CNBC's Julia Boorstin has the story on Snap's earnings.

    by luke.graham edited by Spriha Srivastava 5/11/2017 5:39:13 AM
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    Snap shares are called 23 percent lower in premarket trade, but the share price had been performing well in recent weeks, up almost 10 percent.
    Revenue of $149.6 million fell short of expectations. Revenue was also down from the fourth quarter. The company's net loss widened to $2.21 billion, or $2.31 per share. Several financial firms are lowering their target price today.
    These were the expectations investors had for the stock.
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    CNBC's Geoff, Steve and Arjun discuss what's gone wrong at Snap.

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    It's 'Super Thursday' today, when the Bank of England releases its latest interest-rate decision, quarterly inflation report, meeting minutes and holds a press conference.
    You can watch coverage of the Bank of England's latest policy announcement live on CNBC from 12:45 CET.
    Comment ()
    A change to British reserving rates has impacted Zurich's first quarter net earnings. The Swiss insurer saw net profit slump by almost a third, missing expectations. 

    Despite the hit, Zurich's CFO said the company has had a strong start to the year, adding it was on course to deliver its financial targets.   
    Also, operating income at Telefonica came in at just over 4 billion euros in the first quarter. Revenue for the first three months rose about 4 and a half percent year on year due to a strengthening of the Brazilian Real.

    The Spanish telecoms giant also saw net debt widen to 48 point 8 billion euro.
    Comment ()
    These are the top headlines for the hour.
    • Crude prices mark their best gains of the year, boosted by a big drop in U.S. inventories and reports that more Middle Eastern producers are supporting Saudi Arabia in extending supply cuts.
    • Deutsche Post DHL first quarter profit misses expectations but the company confirms its full year target.
    • Just over the line! Deutsche Telekom ekes out a small beat with its core first quarter profit, thanks to a recovery in growth in its home market as well as strength in the US.
    • Zurich Insurance sees net profit fall more than 30 percent, missing expectations in the first quarter, as a change to rates in the U.K. hurts its property and casualty business.
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    Moller-Maersk reports Q1 revenue of $8.96 billion, versus expectations of $9.14 billion.
    EBITDA for the quarter also missed estimates, coming in at $1.7 billion versus $1.8 billion seen in a Reuters poll.
    The company's CEO said that we cannot be satisfied with overall profitability, but the results was as expected.
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    BT reports has reported Q4 results. Operating profit came to £638 million on revenue of £6.12 billion. Reported revenue was up 27 percent for the year and 10 percent for the quarter.
    The final dividend is up around 10 percent.
    BT's chief executive Gavin Patterson will not be receiving a bonus this year, nor will the outgoing group finance director.
    Comment ()
    Donald Trump's tax reform plans will be on the agenda at the G7 meeting in Bari when central bankers and finance ministers of the world's biggest economies meet in the Italian city over the next couple of days.
    Other issues on the agenda include addressing inequality, international tax, cyber security and terrorism funding. 
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    Willem Buiter, chief economist at Citi, discusses the upcoming G7 summit, which has left issues such as trade and protectionism off the agenda.
    Just because they’re not on the agenda, doesn’t mean they are not being discussed.
    There are lots of bilateral (talks) where these things are bound to be discussed, because they are so central. 

    I do think that the markets are, correctly, relaxed that there’s very unlikely to be a major trade war, although trade skirmishes will be part of the background.
    He went on to say there has been no manifestation of the rhetoric President Trump used during the campaign trail, threatening to deal with countries which ran a trade surplus against the U.S. He said there'll be some renegotiations but no significant backtracking of trade deals. 
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    Snap shares have plummeted in after hours trade following the company's first earnings report as a public business. CNBC's Arjun Kharpal reports.
    If you look at the analyst calls at the moment, they're all very bearish. There's been a lot of price cuts this morning from the likes of Barclays and Cowen & Company, Pretty significant price cuts, too, and that just signals to you that there's a lot of uncertainty about the future of this business. 
    Comment ()
    First quarter earnings at Lanxess rose 25 percent to beat expectations due to stronger than expected sales at its speciality chemicals business.
    Matthias Zachert, CEO at Lanxess, says the company has "punched hard" in Q1 and is on track with its transformation.
    We are up for a record year in 2017 and this is just the start of our transformation. In the second half we are going to convey what next steps we are going to do, so my feedback for you is buckle up.
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    Today’s economic calendar in Europe looks like this (London times):

    08.15: Switzerland inflation
    08.30: Sweden inflation
    09.30: UK industrial and manufacturing production
    09.30: UK trade balance
    10.00: Greek unemployment
    10.00: ECB growth forecasts
    12.00: Bank of England policy decision
    13.00: BoE presser

    Markets look set to open flat. This after stocks in the U.S. lacked much direction in Wednesday trade. The 'VIX fear index' has closed below 11.0 for 13 consecutive sessions. That is a record.

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    Deutsche Post DHL shares are called lower after first quarter profit missed expectations -- rising only 1 point 4 percent.
    Frank Appel, CEO at Deutsche Post DHL Group, discusses the company's earnings.
    Operating profit in the company's freight division fell 22 percent in the quarter as the company warned the price environment remains challenging.
    We had against a record result, record quarter. It is perfectly in line with our own expectations. Revenue is very much up, strongest revenue growth we have seen for a while, which shows the economy is strong.
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    Frank Appel, CEO at Deutsche Post DHL Group, discusses the working relationship with Amazon, even as the tech giant starts to build its own distribution centres and delivery methods.
    We are strong partners and we help each other to grow our business pretty rapidly. Amazon needs very high quality service delivery and we have provided them with that. With new ideas we do that constantly.
    On the other side they have a right to build their own capabilities because they are growing so rapidly.
    He says it will always be an important relationship for both sides.
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    European markets are now open for trade. The pan-European index opens slightly to downside.
    The index rose 0.16 percent in yesterday's session to 396.45 points.
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    The euphoria that accompanied Snap's blockbuster IPO seems to have fizzled out, judging by the investor reaction to the firm's first earnings release as a listed company. The earnings report fell well short of expectations.
    The shares are down more than 20 percent in after market trade.
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    These are the best and worst performing sectors today. There's a slight negative bias to some sectors in the U.K. as several large firms, such as Sainsburys has gone "ex-divi" - it's paid out its dividend to investors.
    Utilities is struggling again as the U.K.'s Conservative government proposed price caps on energy costs. This is an appeal to voters ahead of the general election.
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    Here are how the various European markets are settling down after the initial flurry of trades.

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    These are some of the major stocks in the news.
    BT reported its Q4 earnings, with full year revenue up 27 percent. Spain's Telefonica saw operating income rise with the strengthening Brazilian real.
    Deutsche Telekom report Q1 core profits above expectations. Meanwhile, Deutsche Post announced first quarter revenues of 14.9 billion euros. EBIT missed expectations, coming in at 885 million euros.
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    We're seeing cautious early trade on Thursday morning. Here's how the individual European bourses are looking at the start of the session.
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    On set, Stephen Macklow-Smith, Head of Europe Equity Strategy at JP Morgan Asset Management makes the case for investing in European equities.

    I don't think valuations are a concern in Europe. Yes, on an earnings basis they are above average but earnings haven't moved for 7 years and are only starting to grow now.
     Macklow-Smith says the move away from low inflation in Europe should translate to higher revenue and greater operational flexibility for firms.

    European shares have witnessed a healthy rise in recent months.

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    Shares of Italy's largest bank-by-assets UniCredit is at the top of the Stoxx 600 on the back of a strong earnings beat.
    Another Italian bank UBI Banca posted strong earnings, with net profits up 59.4 percent to 67 million euros in the first quarter.
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    Italian banks are performing well today. Strong earnings results from UniCredit, Mediobanca and UBI Banca is pushing the stocks up sharply.
    Year to date, Italian banking stocks have rallied strongly.
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    The bigger Italian banks are in the green after Unicredit stormed the first quarter with a net profit of nearly one billion euros. 

    However, Willem Buiter, Chief Economist at Citi says there are too many small nonprofitable banks in Italy and the NPL issue is only being addressed at a minor level.

    Buiter says the solution appears to be "arm twisting" of solvent Italian solutions to pay too much for non-solvent peers.

    Buiter says while the ECB remains a lender of last resort, it does not mean that there is a functional banking system.

    He says there needs to cross-border consolidation in Europe and that means a banking union across Europe.

    On stock picking, JP Morgan's Stephen Macklow-Smith says Italy is not a top pick and he prefers a selection of Benelux and Spanish banks.

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    It's not all plain sailing in Italian markets. 
    Shares in Italian insurer Generali are down almost 2 percent this morning after the company reported Q1 net profits fell 9 percent.
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    Here are the main headlines following the open of European markets.
    • UniCredit rallies to the top of the Stoxx 600, after the Italian bank swings back to the black in the first quarter with a net profit of nearly one billion euros. 
    • The banking boost extends north to France, where Credit Agricole sees net income rise four-fold on a yearly basis on the back of a surge in trading activity. 
    • Deutsche Post DHL underdelivers in early trade as first quarter profit misses expectations. But the group's CEO tells us the pressure on freight rates is easing. 
    • Crossed wires in the Telco sector. BT lowers its dividend forecast, while Deutsche Telekom ekes out an earnings beat and Telefonica benefits from currency gains. 
    Comment ()
    Some economic data out this morning.
    Swiss CPI inflation rose 0.2 percent in April and 0.4 percent on the year. It was forecast at 0.5 pecent
    Swedish CPI inflation grew much faster. It increased 0.6 percent on the month and 1.9 percent on the year, above estimates of 0.4 percent and 1.6 percent.
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    Steve takes us through the first 30 minutes of trade this Thursday.

    by david.reid
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    German chemical and consumer goods maker Henkel reported strong performance with its Q1 earnings this morning.
    Sales grew 4 percent to 5.06 billion euros, with adjusted EBIT of 854 million euros amd net profit of 597 million.
    However, the company did warn of an increase in direct raw material costs and announced it had signed an agreement to buy Darex Packaging Technologies in a deal costing around $1.05 billion.
    This caused shares to fall sharply at the market open, down around 1 percent, although it has trimmed back this loss.
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