World Markets Live - May 17 - CNBC Live Events
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CNBC Live Events

World Markets Live - May 17

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

  • Good morning everyone. Risk aversion has swept across Asian markets and is pointing to triple-digit losses for the Dow. In Europe, stock futures point to a lower start to the trading day. Here are your morning calls:
     
    FTSE 100        7497        -25 
    DAX 30           12735      -64
    CAC 40            5383        -18
    FTSE MIB       21628     -141
     
  • Here are your top stories at this hour:
     
    • U.S. futures point to triple-digit losses for the Dow as risk aversion sweeps across Asia stocks, and the euro hits highs against the dollar not seen since the U.S. election. 
    • Donald Trump tells James Comey - "I hope you can let this go", according to a memo written by the former FBI Director, who claims the President urged him to shut down the investigation into former NSA adviser Michael Flynn. 
    • The European Union prepares a legal case against the Italian government for failing to crack down on Fiat over the emissions scandal, sending shares in the car maker down in U.S. trade. 
    • The end of an era. The British government is set to sell off its final stake in Lloyds, as the bank becomes the first U.K. lender to exit state-ownership after the financial crisis. 
       
  • President Donald Trump asked former FBI Director James Comey in February to end the agency's investigation into former National Security Advisor Michael Flynn -- according to a report by the New York Times.  
     
    NBC News has confirmed that Comey wrote a two-page memo detailing the conversation immediately following the meeting.  The White House has denied Comey's version of the events saying "the president has never asked Mr. Comey or anyone else to end any investigation."
     
    U.S.-WASHINGTON D.C.-FBI-HEARING : News Photo
    by Spriha Srivastava edited by luke.graham 5/17/2017 5:05:43 AM
  • Donald Trump tells James Comey - "I hope you can let this go", according to a memo written by the former FBI Director, who claims the President urged him to shut down the investigation into former National Security Adviser Michael Flynn. NBC'S Blayne Alexander has the story from the White House.

    by Spriha Srivastava edited by luke.graham 5/17/2017 5:07:34 AM
  • Representative Jason Chaffetz -- the republican Chairman of the House Oversight Committee -- released a letter requesting the FBI turn over all "memoranda, notes, summaries and recordings" relating to communications between former FBI Director Comey and President Trump.  In the letter, Chaffetz said - if true - the Comey memo raises questions as to whether the President has attempted to influence or impede the FBI's investigation
     
     
  • Asian markets were mostly lower on Wednesday, with Dow futures tumbling and the safe-haven yen climbing amid political and legal turmoil surrounding U.S. President Donald Trump.

    Investors are deeply concerned that all the political noise will morph into economic risk as the political back-fence talk, speculation and dirty laundry could detract from Trump's key agenda: Tax reform, Stephen Innes, senior trader at OANDA, said in a note on Wednesday.
     

    Dow futures tumble on Trump political woes and Asian markets fall as safe-haven yen climbs

    CNBCDow futures tumbled and equities in Asia opened lower as the yen climbed and the euro spiked amid political and legal turmoil surrounding U.S. President Donald Trump.
  • The Dollar Index is trading at its lowest level since early November as investors get to grips with the latest news flow from the White House. The Euro is one of the biggest winners against the Greenback, it gained a 1 eleven handle for the first time since the US election result.
     
     Jeremy Stretch, Head of G10 FX Strategy at CIBC Capital Markets joins us live this morning to discuss the move in euro:
     
    We were anticipating that we will get a stronger euro in the second half of the year for a considerable period of time. It is coming a little early and a little faster that we might have assumed. Ultimately what we have seen is the first three months of this year were characterized by political risk or political uncertainty and now it seems that the boot is completely turned and we are talking about uncertainty in the White House and yet in Europe, political risk has seemingly dissipated.
     
     
     
  • ABN Amro beat earnings expectations with 615 million euro in net profit for the first quarter. The Dutch bank said it is targeting ROE of over 13 percent.
     
     
  • The U.K. government has sold its remaining stake in Lloyds Bank, returning the lender to full private ownership nearly a decade after it was bailed out. 

    That's according to a number of media reports - the government is expected to confirm the sale later this morning. Lloyds says the government is likely to make a 500 million profit from the bailout. 
     
     
  • Here are your top stories at this hour:
     
    • U.S. futures point to triple-digit losses for the Dow as risk aversion sweeps across Asia stocks, and the euro hits highs against the dollar not seen since the U.S. election. 
    • Donald Trump tells James Comey - "I hope you can let this go", according to a memo written by the former FBI Director, who claims the President urged him to shut down the investigation into former NSA adviser Michael Flynn. 
    • The European Union prepares a legal case against the Italian government for failing to crack down on Fiat over the emissions scandal, sending shares in the car maker down in U.S. trade. 
    • The end of an era. The British government is set to sell off its final stake in Lloyds, as the bank becomes the first U.K. lender to exit state-ownership after the financial crisis. 
  • U.S. futures point to sharp losses at the open as risk sentiment starts to sour on Trump uncertainty:
     
     
  • Man Group's Pierre Lagrange has told CNBC he expects confidence in Europe to continue, following record inflows into European equity funds last week
     
    I think there's a lot of difference between different geographies. In Europe if you look at the last year, for the first time in the last few weeks there has been a lot of positivity since French election. You have a central bank that is unlikely to taper significantly, growth ticking up, confidence that we haven't had for a long time in mainland Europe. We can't forget how close we were to a disastrous and economically-destructive result in the French election. So this will continue for a longer period definitely in Europe.
     
     
     
    It's about right. If you look at the charts we've still got a lot claw back. Over the last few years -- brexit, the Italian elex, French elections -- it's been a litany of issues. For everybody they say 'Why would I be in Europe?', 'I don't need to invest in Europe if I don't need to be there'. All of these excuses a lot of them have gone now.
  • The UK's opposition left-wing Labour Party released its manifesto on Tuesday. Key proposals include raising corporation tax, and higher-rate income tax, in order to support increased spending on schools, hospitals and infrastructure development. Here's Labour leader Jeremy Corbyn speaking at the launch.
     
    Jeremy Corbyn, Leader of Britain's opposition Labour party said:
     
    A government that invests for all. A government with a vision to ensure that the brilliance and imagination of every child can be fulfilled during their lifetime. Our proposal is a government for the many, not the few. Our proposals are of hope for the many all over this country, and I am very proud to present this manifesto for the many, not the few. Thank you very much.
     
    Jeremy Corbyn Launches The Labour Party Election Manifesto : News Photo 
  • Here are your top stories at this hour:
     
    • U.S. futures point to triple-digit losses for the Dow as risk aversion sweeps across Asia stocks, and the euro hits highs against the dollar not seen since the U.S. election. 
    • Donald Trump tells James Comey - "I hope you can let this go", according to a memo written by the former FBI Director, who claims the President urged him to shut down the investigation into former NSA adviser Michael Flynn. 
    • The European Union prepares a legal case against the Italian government for failing to crack down on Fiat over the emissions scandal, sending shares in the car maker down in U.S. trade. 
    • The end of an era. The British government is set to sell off its final stake in Lloyds, as the bank becomes the first U.K. lender to exit state-ownership after the financial crisis. 
  • Steve, Karen and CIBC's Jeremy Stretch discuss the performance of two big UK banks - Lloyds and RBS as UK government sells its final stake in Lloyds.

  • President Donald Trump allegedly asked ousted FBI Director James Comey to "let go" of the investigation into former national security advisor Michael Flynn, NBC News confirmed with multiple sources with first-hand knowledge of a memo written by Comey.
     
    I hope you can see your way clear to letting this go, to letting Flynn go, Trump told Comey, according to a memo the former FBI director penned soon after the meeting.
     

    Comey says Donald Trump asked him to end Flynn probe, NBC News confirms

    CNBCPresident Donald Trump asked ousted FBI Director James Comey to "let go" of the investigation into former national security advisor Michael Flynn, The New York Times reported on Tuesday.
  • Vanguard has launched its direct-to-consumer online platform in the U.K., dealing a blow to rival British players as the pressure on active fund managers and brokers continues to build. Shares in UK asset managers fell on the back of the launch, with Hargreaves Lansdown being the hardest hit.
     
     
  • European markets are expected to open lower Wednesday after reports President Donald Trump asked then-FBI Director James Comey to drop a probe into his ex-national security advisor.
     
     
  • Here are your top headlines at this hour:
     
    • European and U.S. futures point lower as risk aversion spreads, and the euro hits highs against the dollar not seen since the U.S. election. 
    • Donald Trump tells James Comey - "I hope you can let this go", according to a memo written by the former FBI Director, who claims the President urged him to shut down the investigation into former NSA adviser Michael Flynn. 
    • The European Union prepares a legal case against the Italian government for failing to crack down on Fiat over the emissions scandal, sending shares in the car maker down in U.S. trade. 
    • The end of an era. The British government is set to sell off its final stake in Lloyds, as the bank becomes the first U.K. lender to exit state-ownership after the financial crisis. 
  • Sophos has reported better than expected 18 percent rise in full-year billings. The U.K.'s largest cyber security provider reported free cash flow almost tripled to $133 million. This after shares surged in the wake of the 'WannaCry' attack.

    Kris Hagerman, CEO of Sophos, says cybersecurity is already one of the largest segments on the IT sector.
     
    (It’s) about a $40 billion market, growing at 7 percent a year, but when you have an incident like this ‘WannaCry’ incident it only serves to remind all of us it’s sort a world-wide wake-up call that we have to really redouble our efforts to get the basics right in security and how important it is to do that.
     
     
  • Oil prices fell after data showed an increase in U.S. crude inventories, stoking concerns that markets remain oversupplied despite efforts by top producers Saudi Arabia and Russia to extend output cuts.
     
     
  • Discussing the ‘WannaCry’ attack on institutions such as the U.K.’s National Health Service, Kris Hagerman, CEO of Sophos, says there are layers of defense that any organization can put in place.
     
    We have a whole suite of products and there’s multiple layers that effectively prevented against this attack and some of the organizations had one or more of these layers in place and some didn’t and that determined what the effect they saw from this particular attack.
  • The South African Rand has made a recovery against the U.S. dollar over the past week as political worries trouble the greenback. 
    The Rand has also been helped in part by a recovery in commodity prices.

    Luis Costa, head of CEEMEA FX and rates strategy at Citi, says monetary policy is the only anchor for the South African economy.
     
    We know there’s a very well-established, very serious, very cautious central bank, which has been in denial for the past many years in terms of possibilities of rate cuts. 
     
    The problem is South Africa is going into a very nice disinflation period now. 
     
     
  • South Korea's president Moon says North Korea's nuclear, missile capabilities have recently advanced rapidly and will not tolerate North Korea's provocations and nuclear threats. The South Korean President also said in reality there is a high chance of military confict at border with North Korea. That's according to Reuters citing EDAILY.
     
  • European stocks are now open for trading. The pan-European Stoxx 600 has opened 0.4 percent lower:
     
     
     
     
  • Major European indexes have also opened in negative territory suffering sharp losses this morning as risk sentiment turns sour:
     
     
  • Oil prices are trading lower after data from the American Petroleum Institute revealed a surprise increase in US crude inventories, defying expectations of a drop. The fall comes just days after Russian and Saudi oil ministers agreed to a supply cut extension. 
     
    Luis Costa, head of CEEMEA FX and rates strategy at Citi, says next week’s OPEC meeting is a major driver for oil markets in the short term.
     
    If you look back last week, up to mid last week, we were trading a little bit with a negative bias in EM. A little bit of dollar higher.

    Over the weekend we had a big change of sentiment, after the comments from Saudi and Russian officials that the cut would be extended into March 2018.
     
    Costa says oil is becoming an important factor in FX trading.
     
    Oil prices are trading lower today, after data showed an increase in U.S. crude inventories.
     
     
  • Let's take a look at the best and the worst performing stocks this morning:
     
  • The European Union is reportedly launching a legal action against Italy for failing to properly handle the Fiat Chrysler's emissions-test cheating. The EU is said to be frustrated at the lack of co-operation by Italian authorities to clamp down on defeat devices, adding that the government has failed to convince them of their legality. 
     
     
  • Chinese drugmaker Shanghai Pharmaceuticals says it is considering making a bid for German pharma firm Stada. However, the company is yet to make a formal takeover offer. Stada was recently the subject of a failed acquisition attempt by buyout firm Bain and Cinven. 
     
     
     
  • Tim Hayes, investment strategist at Ned Davis Research Group, says commodity and energy stocks are the places for investors to put their money.
     
    Today we’re seeing a bit of a pullback, but it does look like commodities, energy, are finally bottoming. This has been the one area that has been divergent in what has essentially been a rolling correction since the beginning of the year.
     
    We saw tech bottom first and then we saw the defensives bottom in March. Financials bottomed in April and materials and energy are the last ones that have come down.
     
    Hayes says resources areas look relatively attractive from being oversold and under valued.
     
     
  • Sophos has reported better than expected 18 percent rise in full-year billings. The UK's largest cyber security provider reported free cash flow almost tripled to 133 million dollars. Speaking to CNBC, Sophos CEO Kris Hagerman commented on last week's "wannacry" attack.
     
     
  • Donald Tusk is currently addressing the EU parliament regarding the Brexit summit.
     
    To ensure an orderly withdrawal, we first and foremost need to address the situation of more than 4 million people whose lives will be directly affected by Brexit.
     
     
     
  • Britain's Finance Minister Philip Hammond says our plan remains to get Britain's public finances back into balance. In an interview with BBC, Hammond dismisses reports of tensions between him and PM May's staff as "tittle tattle". 
     
    Hammond also says May has strong team, I work closely with them. 
  • Tim Hayes, investment strategist at Ned Davis Research Group, discusses valuations and says they are not as expensive at they seem,
     
    You have to think about valuation in context of where we are in the earnings cycle, and I like to use the comparison of 2015. 
     
    In 2015, when we got to new highs and multiples (in fact multiples were also accelerating) the market was getting very complacent and really did not expect the economic slowdown that was to follow that year. We were at the top of the earnings cycle as it turned out: the economy slowed, earnings slowed.
     
    Then the markets had to re-price, we had the 2015-2016 bear market. Valuations came back down and then we were at the other end of the earnings cycle when the bull market started in 2016, we were at an earnings trough.
     
    Hayes says this was an ideal point to be as earnings come through and markets improve their outlook. He adds that P/E has actually fallen as major benchmarks have risen.
     
  • Here are your top headlines at this hour:
     
    • European markets open in the red as risk aversion spreads, and the euro hits highs against the dollar not seen since the U.S. election. 
    • The European Union prepares a legal case against the Italian government for failing to crack down on Fiat over the emissions scandal, sending shares in the car maker lower.
    • Ubisoft shares sink as the French video games-maker trims its mid-terms sales guidance despite playing down its reliance on new launches, saying it can boost profitability from older games.
    • The end of an era. The British government is set to sell off its final stake in Lloyds, as the bank becomes the first U.K. lender to exit state-ownership after the financial crisis. 
       
  • Thirty minutes since the start of the European markets and FTSE has now turned positive giving up its gains from this morning:
     
     
  • Sophos shares up 10 percent after full-year results. The company says FY17 results ahead of expectations, unlevered free cash flow of $133 million:
     
     
  • The UK's opposition Labour Party released its manifesto Tuesday. Key proposals from it include raising corporation tax, and higher-rate income tax, in order to support increased spending on schools, hospitals and infrastructure development.
     
    However, the party's opponents were quick to attack Labour's spending plans alleging that a number of its pledges- including plans to re-nationalize the country's water companies - have not been budgeted for.
     
    Allen Simpson, the Labour Party candidate for Maidstone and the Weald, and the chief operating officer of Labour in the City, says it’s important to make a distinction between the costs of improving education and health care and capital expenditure involved in re-nationalization.
     
    Frankly, we don’t know yet what they would cost. The intention would be to go in and figure out what the costs are and try and pay for it within the running of the services themselves.
     
     
  • Allen Simpson, the Labour Party candidate for Maidstone and the Weald, and the chief operating officer of Labour in the City, answered concerns about high earners and corporations moving to other parts of the world, where the trend is for falling tax rates, in reaction to Labour’s proposed tax hikes.
     
    You’re right that there is a race to the bottom and that’s fundamentally unsustainable. What’s interesting about the manifesto is that it is an attempt to try and grapple with a bigger problem, which is what you do when you can no longer afford the post-war consensus and the realities that countries across the West are going to find that 17-18 percent corporation tax doesn’t pay for the reality of a world where we retire for 30 years, not 10.
     
    Simpson says low corporation taxes will also not help countries to educate for skills and not for labour, which costs more.
  • The momentum in emerging markets continues, as the rebound in oil prices has helped lift the MSCI's EM index to a fresh two-year high.

    Gemma Acton sat down with Man Group Senior Advisor Pierre Lagrange and asked him if emerging markets were getting ahead of themselves.
     
    It's a bit more complicated. There's still tightening in China so there's a mixed message. If the US continue to drain liquidity, if we see some dollar repatriation, EM will be a second derivative where people will go only if they don't find opportunities. If momentum continues after Macron victory, EM is going to be secondary to global investors
     
     
  • Alastair Wilson, head of global sovereigns at Moody's, discusses a recent summit conducted by the ratings agency on the issues facing emerging markets.
     
    On the one hand, we’re seeing a broadly positive picture for emerging markets across the world with growth picking up in the next couple of years, 5 percent on average over the regions. 
     
    On the other hand I think, as Pierre  Lagrange said, you have to look at individual countries. In every country, there’s a separate story, so very difficult to look at emerging markets as a class.
     
     
  • These are the top headlines this morning.
     
    • European markets open in the red and U.S. futures point lower as risk aversion spreads, and the euro hits highs against the dollar not seen since the U.S. election.
    • Donald Trump tells James Comey - "I hope you can let this go", according to a memo written by the former FBI Director, who claims the President urged him to shut down the investigation into former National Security Adviser Michael Flynn.
    • The European Union prepares a legal case against the Italian government for failing to crack down on Fiat over the emissions scandal, sending shares in the car maker lower.
    • Ubisoft shares sink as the French video games-maker trims its mid-term sales guidance despite playing down its reliance on new launches, saying it can boost profitability from older games.
     
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