World Markets Live - May 19 - CNBC Live Events

CNBC Live Events

World Markets Live - May 19

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

    The Greek parliament has passed new austerity measures aimed at unlocking debt relief from Greece's creditors. The new legislation was backed by all of Prime Minister Alexis Tsipras' coalition to get it across the line.
    However, protestors clashed with police in Athens during a second day of demonstrations ahead of the vote. The majority of the 15 thousand people remained peaceful in a walkout that was called for by Trade Unions, a day after a general strike.
    President Trump is scheduled to meet with King Salman of Saudi Arabia in Riyadh this weekend, to kick off bilateral discussions between the U.S. and Saudi governments. 
    Faisal Abbas, editor-in-chief at Arab News, says this trip is a historic one.
    Not just for Saudi Arabia. There is a bilateral summit between the U.S. and Saudi Arabia, and of course we know Saudi Arabia is going through a transformation process with regards to reforms to the economy, so there’s a lot of business opportunities and there’s kind of a top CEO meeting happening here between U.S. and Saudi businessmen.
    Iranians head to the polls today to choose their new president, in what's been a bitterly contested campaign between incumbent Hassan Rouhani and his nearest challenger Ebrahim Raisi.
    NBC's Ali Arouzi reports from Tehran, says there’s a big ideological divide between the two candidates.
    The two candidates represent two very difference Irans. President Rouhani who has made an outreach to the west and wants Iran to look outward and has encouraged foreign investment and a more moderate stance on social restrictions in Iran, is trying to get a second term and if there isn’t a big voter turnout, that’s going to hurt him.
    Oil prices are rising today on hopes that OPEC will extend production cuts for a further nine months.
    The Nasdaq posted its fourth positive session in five on Thursday, with Apple and Facebook helping the index higher.
    However it is on track to break a four week win streak and will start Friday with over 1 percent to make up.
    Cathie Wood, CEO & CIO of ARK Invest, says tech stocks are removed from the turmoil surrounding the Trump presidency, which has knocked the Dow and S&P lower.
    What’s going on in technology today is astounding.
    We’ve had three companies in the last week focusing on artificial intelligence: Nvidia, Google (going) A.I. first instead of mobile first now they’ve accomplished mobile first, and last night, they’ve got Einestein and IBM Watson working together.
    We think artificial intelligence is the great new frontier in technology and it’s going to produce some astounding results.

    Bitcoin hits $1,900 to reach record high with market cap up $3.7 billion this week alone

    Factors including increased trading in Japan to debates over the future the bitcoin's underlying technology have boosted the price.
    Gold looks set for its biggest weekly gain since mid-April.
    Dollar weakness brought about by turmoil surrounding the Trump administration, plus the emerging political crisis in Brazil, has helped boost the price of the precious metal.
    Swedish prosecutors have announced they are dropping the preliminary investigation into allegations of rape made against WikiLeaks founder Julian Assange.
    The prosocutors have asked the courts to withdraw the detention order against Assange.
    This brings to an end a 7-year legal stand off between Assange and authorities. He has been living in the Ecuadorean embassy in London since 2012 in order to avoid extradition by Sweden.
    Assange in February 2016.
    Yields on Portugal's 10-year government debt has fallen to as 7-month low, down around 5 basis points today.
    The bond yield is set for its biggest one-week fall since November 2016, down 23 basis points, according to Tradeweb data.
    This comes after the ratings agency Moody's said the country's economic recovery supports its credit profit and said it has a stable outlook. 
    The dollar index is down another 0.35 percent today. The dollar index is on track to post its worst week in 9 months, amid a tumultuous week for U.S. politics.
    Thomson Reuters has released its weekly Investment Banking Scorecard, a set of facts indicating the trends in deal making.
    • European M&A activity is at $378.6 billion, up 62 percent compared to 2016
    • Industrials M&A is up 22 percent compared to last year with $150.1 billion in deals
    • Global IPOs are up 108 percent compared to YTD 2016 with $58.5 billion in capital raised
    • US high-yield corporate debt activity hits $92.2 billion, up 44 percent compared to last year
    The pan-European Stoxx 600 is up 0.6 percent today and European bourses are recovering from recent losses inflicted this week, caused by U.S. political turmoil surrounding President Donald Trump.
    Despite the bounce today, the markets are down about 1 percent for the week.
    The U.K. police say Julian Assange will be arrested if he leaves the Ecuadorean embassy in London.
    That's despite Swedish prosecutors announcing they are dropping the investigation into rape allegations made against him.
    The seasonally adjusted current account surplus in the Eurozone dropped to 34.1 billion euros in March from 37.8 billion in February.
    Claus Vistesen, chief Eurozone economist at Pantheon Macroeconomics, says the current account is being driven by a surplus in services, but this won't last.
    We had expected a bigger fall, but contrary to our forecast the services surplus rose to a new all-time high of 11.6 billion euros, from 10.2 billion euros in February. We doubt that this level is sustainable, though, and expect it to fall soon.
    Elsewhere, the primary income and goods surplus dipped slightly to 3.4 billion euros and 29 billion euros respectively. We think the income surplus will increase in 2017 as a lagged response to surging net foreign assets, but the goods surplus likely will fall as net exports to the U.K. weakens. Finally, the current transfers deficit widened back to trend after narrowing in February.
    Overall, the current account surplus rose to 3.4 percent in the 12 months ending March, up marginally from 3.3 percent in the same period last year. 
    The euro rose against the dollar after the current account data was released, currently up about 0.55 percent.
    The common currency has profited from dollar weakness and is up around 2 percent this week.
    WikiLeaks founder Julian Assange has tweeted an old picture of himself following news the Swedish authorities have discontinued an investigation into rape allegations made against him.
    He has been stuck living in the Ecuadorean embassy in London since 2012 to avoid deportation and extradition.
    German Chancellor Angela Merkel says Britain will be treated fairly after Brexit, but says leaving the European Union will have its price, according to Reuters.
    This comes after Merkel's conservative party extended its lead over the Social Democrats in polling, with data saying they can expect 38 percent of the vote in this year's general election compared to the SD's 27 percent. 
    The London police have issued a statement, saying they will arrest WikiLeak's founder Julian Assange if he leave the Ecuadorean embassy, despite Sweidsh prosecutors dropping an investigation against him.
    Westminster Magistrates' Court issued a warrant for the arrest of Julian Assange following him failing to surrender to the court on the 29 June 2012.
    The Metropolitan Police Service is obliged to execute that warrant should he leave the Embassy.

    Takata air bag settlement delivers $553 million to consumers for economic losses

    Owners with potentially defective Takata air bags are eligible for financial assistance in getting their vehicles fixed and up to $500 in compensation. USAToday reports.
    Certain Toyota, Mazda, Subaru and BMW vehicles equipped with Takata air bags that could explode in a crash are included in the $553 million deal aimed at covering economic losses.
    The U.K. CBI manufacturing order book balance came in at +9 in May from +4 in April. That's the highest reading since February 2015.
    Output volume growth for the 3 months to May was at its fastest since December 2013 at +28, while the export orders book was +1 versus April's +3.
    Sterling ticked a little higher on the data. It is up 0.56 percent today thanks to dollar weakness.
    U.K. take-home earnings data released earlier this week caused concern, as they grew slower than inflation, creating the biggest squeeze on households for months.
    Holger Schmieding, chief economist at Berenberg, says fears of inflation dampening consumer demand are overblown.
    The risks to consumers from rising inflation are exaggerated: Thanks to a circa 10 percent fall in the sterling exchange rate since the Brexit vote, rising costs of imported goods will probably add around 0.75-1.0 percent to headline inflation this year before the effects fade in 2018.
    How much damage will this – small – extra inflation do to domestic demand? Not much.
    Despite the media excitement about serious risks to household spending this year as inflation temporarily rises above wage growth, history shows that concerns about such risks are misplaced. When prices rise faster, consumers often open their wallets more.
    The pound  is set to finish the week almost 1 percent higher against the dollar, thanks to dollar-weakness caused by political turmoil surrounding President Trump.
    WikiLeaks founder Julian Assange's defence lawyer says the Swedish authorities decision to drop its investigation into rape allegations against him is a "total victory for us."
    The prosecution authorities says Assange has evaded all attempts by Sweden and the U.K. to extradite him to Sweden, and that as a result of his refuge within the Ecuadorian embassy since 2012, transferring him to Sweden has not been possible.
    Meanwhile, the U.K. police say they are still obliged to arrest him if he leaves the embassy, saying they have to carry out a warrant issued by Westminster Magistrates' Court after he failed to surrender to the court on the 29 June 2012. 
    The [Met] response reflected the serious nature of [the] crime.
    Now that the situation has changed and the Swedish authorities have discontinued their investigation into that matter, Mr Assange remains wanted for a much less serious offence. The [Met] will provide a level of resourcing which is proportionate to that offence.
    U.S stock market look set to carry on yesterday's rebound at today's open, according to future values.
    Despite these firmer numbers, the Dow is still set for its worst week in around two months.
    There's no economic data to watch out for from the U.S. today, but we have a few earnings updates.
    Campbell Soup is set to report before the bell at around 07:15 a.m. ET, as are Deere and Foot Locker around 06:45 a.m. ET.
    Meanwhile, President Donald Trump is beginning his trip to the Middle East. He'll be visiting Saudi Arabia, Israel and the Palestinian Authority, as well as Vatican City, Italy and Belgium. shares are trading almost 3 percent higher in premarket trade. That comes after a raft of financial firms raised their target prices for the stock.
    The company reported a 26 percent jumped in deferred revenue for its first quarter and raised its full year revenue forecast from $10.25 billion to $10.3 billion. 
    Germany is eyeing ways it can encourage top financial firms to relocate to its financial hub in Frankfurt from London following Brexit. 
    An ally of Chanceller Angela Merkel says the German government is considering changing labour laws to make it easier to hire and fire high-earning bankers, according to a Reuters report.
    The move would apply to those earnings more than 250,000 euros and would see high-earners not received German protections against redundancy.
    The news comes as other financial hubs, including Paris and Dublin, look at attract banks to move from the U.K. or set up new offices in order to remain within the single market.
    Will Frankfurt become Europe's future banking capital?
    The CBI released its latest manufacturing and industrial trends data earlier this morning.
    The U.K. CBI manufacturing order book balance came in at +9 in May from +4 in April. That's the highest reading since February 2015.
    Samuel Tombs, chief U.K. economist at Pantheon Macroeconomics, says the data indicated manufacturers are benefiting from the revival in world trade and sterling's depreciation.
    The 3 percent year-over-year growth rate of manufacturing output signalled by the CBI’s survey, however, is not sufficient to offset fully the slowdown in the consumer sectors of the economy brought on by sterling’s depreciation.  
    What’s more, the risk that the U.K. leaves the EU without a deep trade deal in place is casting a cloud over the outlook for manufacturing. Indeed, the quarterly balances contained in last month’s CBI survey showed that manufacturers’ plans for investment in plant and machinery were at their lowest levels for six years.
    Tombs warned that capacity constraints may bite soon, preventing manufacturers from benefiting further from sterling’s depreciation.
    The strong industrial data gave a small boost to the FTSE 100 index of blue chip companies. The bourse looks set to finish the week up about 0.4 percent.
    Foot Locker has reported its first quarter results. Sales came to $2 billion, with net profits of $180 million, or $1.36 per share. Same-store sales grew 0.5 percent over the quarter.
    The company said it "believes our inventory is still well positioned to drive improved top line results over balance of year."
    The retailer said it sees a mid-single digit increase for full year earnings per share.
    Deere has reported second quarter net profit of $802 million, or $2.49 earnings per share. Revenue was $8.29 billion. 
    Profit at the company jumped about 62 percent, and it said it sees full year sales up about 9 percent.
    Shares in the company traded more than 5 percent higher in premarket trade.
    European stock markets have regained some ground after recent pullbacks but still face losses on the week. According to data, it would mark the first weekly fall in 4 weeks.
    Globally, stocks have paused for breath on increasing concerns that U.S. President Donald Trump could be impeached. The specter of legal action was raised after reports that Trump intervened into an FBI investigation.  If that seems unlikely, investors are still exhibiting concern that Trump will not be capable of enacting any business friendly policy.
    The "Trump slump" has also eased off in relation to the dollar although the world's most powerful currency is still on course for its worst week during the Trump presidency.
    Talking to Reuters, the global head of FX at National Australia Bank, Nick Parsons, said he felt dollar/yen moves were now dependent on moves in stock markets:
    We can be pretty confident that 10 points on or off the S&P 500 is a big figure on or off dollar/yen.
    Prices of oil futures are heading for a second week of gains. Investors in oil believe that prices will be supported by supply restrictions imposed by producing countries such as Russia and Saudi Arabia.
    Bt is the long term outlook for oil bearish?
    Bernard Haykel of Princeton University told CNBC Friday that the Saudi Aramco IPO is happening now because Saudi Arabia realizes the downward pressure on the oil price is happening at the same time as other energy sources come in to the mix.
    Lockheed Martin, Raytheon, Boeing General Dynamics and Northrop Grumman are all firms expected to benefit from an estimated $100 billion sale of arms by the United States to Saudi Arabia.
    The CEO's of Lockheed Martin, Raytheon and Boeing are all expected to join the Trump delegation in Riyadh this weekend when the U.S. President meets with King Salman, the Saudi monarch.
    Two more summit meetings are scheduled in the Middle East over the weekend:
    • Trump and the leaders of a Gulf coalition, including Saudi Arabia, Bahrain, Kuwait, Oman, Qatar and the United Arab Emirates.
    • Trump and more than 50 leaders and representatives from across the Muslim world.
    Howard Rubel at Jefferies says Raytheon in particular with its suite of products looks set to benefit from the deal with Saudi Arabia.
    Brazilian stocks showed signs of recovery in extended hours trade Friday. Political turmoil saw major indices yesterday post their worst day since the start of the 2008 global financial crisis. 

    The iShares MSCI Brazil Capped ETF (EWZ), a heavily traded U.S. exchange-traded fund that tracks Brazilian stocks, was up more than 4 percent Friday morning after plummeting 18 percent Thursday. 

    The ETF ultimately closed the day down 16.33 percent amid allegations that Brazilian President Michel Temer agreed to pay hush money in the country’s biggest-ever corruption probe.
    President of Brazil Michel Temer
    Per Hammarlund, Chief EM Strategist at Nordic corporate bank SEB said in a note Friday that Brazil looks set to replace Temer whatever the result of investigations. 
    Because Michel Temer is unpopular among the electorate and because he now will be ineffective as president, he will be kicked out of office, even if the allegations against him are inconclusive. Either Congress will impeach him, or the election tribunal will nullify his election in 2014 for illegal campaign financing. 
    Hammarlund wrote that a spill-over effect on global markets will taper off as the political crisis unfolds and a replacemnet is nominated.
    He said a high risk of street violence still remains, unless congress acts quickly to find a palatable replacement.
    The International Monetary Fund has said that it expects the Russian economy to grow 1.4 percent in 2017 because of higher oil prices. The IMF said Russia is exiting a two year recession and inflation should slow to the central banks 4 percent target this year.
    This week's losses have pulled the STOXX 600 down from near two year highs. This after a run driven by big inflows into Europe, punchy data and strong corporate earnings.
    After the latest company updates, however, first-quarter earnings growth is seen at 19.4 percent, slightly below the over 20 percent previously forecast.
    Inflows into European stocks in the last 30 days have reversed this week.
    WTI on a June contract just now drifting back below $50 but it is still up more than  one percent on the day.
    OPEC and other producers are due to discuss an extension during an OPEC meeting on Thursday. have gone higher at the open of Friday trade in the United States.
    The best and the worst on the Dow Jones look like this after just a few minutes of trade. 
    The biggest movers and shakers on the S&P 500 look like this.
    Twitter has been playing up and this journalist from the Wall Street journal just doesn't know what to do. Although we do only know about it because of a tweet.
    Here's a little light Friday reading for you.

    All you need to know about the elections in Iran

    What you need to know as Iranians head to the polls to vote for their next President.
    He's on twitter promising big things from his busy trip to the Middle East and Europe. 
    This as markets continue to grind higher.

    Russia-US relations have become 'extremely paranoid', says CEO of Russia's largest bank

    CNBCDiplomatic relations between America and Russia have deteriorated to such an extent that contacts have become extremely paranoid, says Sberbank CEO.
    And that is where we will leave the blog for the week.
    European markets closed higher on Friday as prices in the U.S. and Asia stabilized after a heavy sell-off in recent sessions.
    The pan-European Stoxx 600 provisionally ended 0.57 percent with all sectors and major bourses in positive territory.
    Do join us again on Monday at 06:00 a.m. London time.
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