World Markets Live - May 5 - CNBC Live Events
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CNBC Live Events

World Markets Live - May 5

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 happy Friday.

    Here are your top stories as we stand:

    • Oil prices slide taking Brent below 45 dollars a barrel for the first time since the output deal - investors worry an extended agreement won't address the supply glut. 
    • President Trump starts early celebrations of his health-care victory in the House of Representatives, saying that Obamacare is on the way out.
    • The euro heads towards a 6-month high against the dollar as Emmanuel Macron extends his lead over Marine Le Pen in one of the final polls ahead of the second round run-off on Sunday. 
    • Britian's opposition Labour party face heavy losses in local elections ahead of the general vote next month, as the war of words over Brexit intensifies. 

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  • Oil pinned near 5-month low as global oversupply weighs

    CNBCOil prices were marooned near five-months lows on Friday on concerns over rising U.S. supply.
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  • The oil price slump has put pressure on stocks across the Asia Pacific region. Markets in Japan and South Korea were closed for the Children's Day holiday.

    Markets in Japan and South Korea were closed for the Children's Day holiday.




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  • Worth noting the huge sell off in gold this week. The precious metal attempting a bit of a pullback in today's session.


    Copper and iron ore prices have also fallen heavily as fears over global demand rise.

    Later today in the United States we will hear words from Janet Yellen and also there is the small matter of the non-farm payrolls report at 08:30ET/13:30 BST. 

    Markets finished like this in the U.S. yesterday evening. The Dow Jones industrial average closed about 7 points lower, with Caterpillar and Chevron contributing the most losses. The 30-stock index fell more than 100 points at session lows before recovering most losses.

    The S&P 500 and the Nasdaq composite ended the session mostly flat.



    Comment ()
  • These are pictures from Paris of Greenpeace on the Eiffel Tower. They are reportedly protesting against the candidacy of French far-right candidate Marine Le Pen.

    #resist was originally a hashtag used to protest against Trump.

    Greenpeace protesters currently dangling from the Eiffel Tower. 

    On set, Steve suggests the protest could have had security complicity. 
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  • The U.S. House of Representatives passed a bill to "repeal and replace" Obamacare by the slim margin of 217 to 213 with 20 Republicans opposing the bill.  

    President Trump hailed the victory as the end of Obamacare saying his predecessor's signature legislation is "essentially dead."  The bill now faces an uphill battle in the Senate where several Republican members have already questioned the legislation.

    President Donald Trump 

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  • There is an entrenched mindset about deflation in Japan that has been going on for about 15 years. That is not about to change and the central bank there will likely have to continue its stimulus for some time.
     
     
     
     

     - Martin Arnold, FX & Macro strategist at ETF Securities 

     

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  • France will elect its next leader this weekend in the wake of a presidential campaign that has effectively torn up the country's political status quo. The latest poll from Elabe gives Emmanuel Macron a commanding lead over his rival Marine Le Pen.

    We will, of course, have a live blog running to cater for this event.


    This graphic predicts what the balance of power will look like in France should the polls hold accuracy.


    Comment ()
  • A reminder of our top stories as we stand:

    • Oil prices slide taking Brent below 45 dollars a barrel for the first time since the output deal - investors worry an extended agreement won't address the supply glut. 
    • President Trump starts early celebrations of his health-care victory in the House of Representatives, saying that Obamacare is on the way out.
    • The euro heads towards a 6-month high against the dollar as Emmanuel Macron extends his lead over Marine Le Pen in one of the final polls ahead of the second round run-off on Sunday. 
    • Britian's opposition Labour party face heavy losses in local elections ahead of the general vote next month, as the war of words over Brexit intensifies. 


    Comment ()
  • Syngenta shareholders have voted to support ChemChina's $43 billion takeover of the Swiss agrochemical group.  

    According to a joint statement by the two companies, preliminary numbers show over 80 percent of shareholders voted in favor of the acquisition.

    Erik Fyrwald, CEO of Syngenta is asked on China and how the company can grow there when Beijing is not allowing genetically modified food.

    Fyrwald says there is $360 million invested in China nd that will grow. He says technology will be brought to China and "over time" that will include GM. 

     Erik Fyrwald, CEO of Syngenta

    On the acquisition by ChemChina, Fyrwald says 81 percent of shares have tendered so far and the deal will close on May 18th.

    He says funding for the deal is watertight, but funding after the deal is sealed is still being worked through. Fyrwald says he is confident it will be sufficient to carry out operations and potential acquisitions.
    Comment ()
  • Skanska says its profitability levels are not satisfactory. This after the Swedish construction and development firm saw revenues and operating income decrease in the first quarter. 

    Johan Karlström, the CEO of Skanska, says everyone knows that there is a huge need for infrastructure in the United States and he is confident it will come.


    Karlström says Skanska has a sizable construction order backlog in the United States.

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  • A slight recovery in oil prices since a floor was found in Asian trade. At one stage Brent was under $47 and WTI was below $44.





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  • The euro sits near a six-month high against the dollar this morning, supported by the belief that "En Marche" candidate Emmanuel Macron will prevail in France's presidential election on Sunday. 

    His opposition Marine Le pen is openly anti-euro and is considered by markets as potentially disruptive to the French economy.

    Expectations that the ECB could be set for a more hawkish tone is also bolstering the single currency.


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  • European markets are looking set for a negative open in around 30 minutes.


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  • Beat Wittmann, Partner at Porta Advisors is on set as guest host.

    He's asked if the narrative of 2-3 rate hikes in the United States this year is inconsistent with the recent soft data.

    Wittmann says he thinks data in the last few weeks has been poor but is a temporary blip.

    On the U.S. labor participation rate, Wittman is expecting that to rise but inflation pressures will not be a dramatic factor as energy prices remain subdued.


     Beat Wittmann, Partner at Porta Advisors

    For oil, he doesn't consider recent moves as dramatic and believes the wider oil range is between $40 and $60 per barrel.
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  • Bond yields are moving lower on a session when most European paper is getting bought. despite the oil sell-off,  a generally bullish sentiment is pervading European sovereigns.


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  • China's first large homemade passenger jetliner is currently making its maiden flight from Shanghai. The 158-seater C919 is being touted as a rival to single-aisle jets, including the Airbus A320 and Boeing 737.

    Geoff says the long list of foreign suppliers to the development of this plane may not last as China looks to ensure self-sufficiency. 

    The chinese are taking a lot of notice of what Donald Trump has to say about trade. And I think the old model of reverse engineering western technology will be less prevalent. 
     
     
     

    C919 cockpit 

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  • Steve Sedgwick reminds us that a falling oil price is often viewed as a negative sentiment but it should be remembered that it will help producing industries.

    He gives us 5 reasons why sentiment is turning on oil. Click play to hear his rundown.

    by david.reid

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  • Here is the negative open as predicted.


    That being driven by a sell-off in Basic Resources and Oil & Gas.


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  • In terms of individual markets, we are looking at a bit of pushback right across the continent in the early stages.


    Portugal's data always a little slower to arrive.


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  • But even on a down day we still have winners.

    Pearson has announced "further initiatives" to simplify the company, saying a strategic review of its K-12 courseware publishing business is underway.  

    The education and publishing group said underlying sales increased 6 percent in the first 3 months and kept its 2017 outlook unchanged.  This comes as a group of international teaching unions has called for the removal of CEO John Fallon -- saying the group's business strategy is  "neither in the interests of kids, parents or teachers.

    On set earlier, Fallon said Pearson remained "firmly on the side of teachers".


    IAG, listed in the above table as International Consolidated Airlines Group,
     has smashed expectations to post strong first-quarter operating profit and revenue, as fuel unit costs dropped nearly 14 percent. 

    The British Airways and Iberia owner said an increase in passenger unit revenue contributed to its record numbers for the period, which has usually been the company's weakest quarter. 

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  • Intercontinental Hotels Group has announced that its CEO Richard Solomons is to retire. IHG said the chief commercial officer, Keith Barr, will take over from Solomons in July. 

    The news came as the hotel group reported a 2-point-7 percent rise in comparable room revenue in the first quarter and said it remains confident of its outlook this year.

    The stock has enjoyed strong gains and investors have understandably realized some concern this morning with a spot of selling.


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  • These are the worst performers across Europe's biggest 600 stocks this morning. Inmarsat has had its rating revised downwards by stock analysts at Berenberg. 

    The London-listed firm owns and operates a global satellite network and has a market cap of around £3.6 billion. 


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  • Vestas has beaten first quarter operating profit forecasts, adding that the value of its wind turbine order backlog stands at 9 billion euros. The company said it was maintaining its 2017 revenue outlook.  

    Banco Popular has reported a net loss of 137 million euros in the first quarter. This after the Spanish lender paid extraordinary provisions to clean its balance sheet. The bank also reported a capital ratio of 7.3 percent, down from 8.1 percent in mid-December. 


    Smurfit Kappa has reported a fall in first-quarter net profit. CEO Tony Smurfit said that although the political and economic risks were weighing on the Irish packaging company, it was well positioned to "capitalize on a positive pricing environment in 2017."

    Syngenta shareholders have voted to support ChemChina's $43 billion takeover of the Swiss agrochemical group.  According to a joint statement by the two companies, preliminary numbers show over 80 percent of shareholders voted in favor of the acquisition. Speaking to CNBC, the CEO Erik Fyrwald expressed his hope that the company could help strengthen US-Sino agricultural relations.
    Comment ()
  • After 30 minutes of trade in Europe, our latest headlines look like this:

    • The slumping crude price takes its toll on oil stocks, which underperform the European market, as investors worry an extended output agreement won't address the supply glut. 
    • Full marks for Pearson. Shares in the education company spike on the potential sale of its U.S. unit and increased cost cutting. But the CEO is forced to justify his pay package. 
    • Shares in IAG take off, hitting the highest level in more than a year, as the owner of British Airways enjoys a record passenger revenue performance in what is normally its weakest quarter. 
    • Less than 48 hours to go until the polls open for the final round of the French presidential election, as Emmanuel Macron extends his lead over Marine Le Pen.
    Comment ()
  • Karen updates on the main stock movers.

    by david.reid
    Comment ()
  • London's status as a financial center will stall because of Brexit. That's the warning from Goldman Sachs CEO Lloyd Blankfein. 

    Speaking to the BBC, he said the U.S. bank had already been looking at office space in Frankfurt and Dublin, and urged lawmakers to create an implementation period once the Brexit deal is agreed. Without this, he said banks like Goldman would have to QUOTE 'act prematurely' to move jobs and activities. 


    Meanwhile, European Council President Donald Tusk has warned that Brexit negotiations will become "impossible" if emotions get out of hand.  

    Speaking at a news conference in Brussels, Tusk stressed that the Brexit discussions are difficult enough to begin with. Tusk's comments followed the U.K. Prime Minister's accusation that some European politicians were trying to impact the outcome of the British election in June.

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  • Shares in IAG have flown to their highest level since the start of 2016. The British Airways and Aer Lingus owner smashed expectations to post strong first-quarter operating profit and revenue, as fuel unit costs dropped nearly 14 percent. 

    There are also some big gains across the sector on the back of strong traffic figures from Ryanair and Easyjet.
    Air France-KLM has also taken off, as its price target has been raised by Morgan Stanley, Credit Suisse, and HSBC.


    Comment ()
  • Saudi Arabia's energy minister and Russian counterpart Alexander Novak say they're satisfied with oil fundamentals, adding that it's important to continue working with others to rebalance the market. 

    That's according to Saudi Arabia's OPEC governor who said there was a growing conviction that a 6-month extension may be needed to rebalance the market. This as oil prices slump to near 6-month lows, erasing all gains made since OPEC's production cut deal last November. 

    Miswin Mahesh, Oil Market Analyst at  Energy Aspects says the market is, at last, revealing its frustrations with high inventories, sluggish macro data from China and signs that Opec will struggle to maintain supply caps from its member, and non-member, countries.

    In the last hour or so, Brent Crude has turned positive for the session.




    Comment ()
  • Here we can see the mini-rally from oil this morning amid the context of the weekly performance. 


    The FTSE is heavily laden with oil and mining stocks and has therefore pushed into positive territory.



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  • In France, Claire Fournier has spoken with far-right candidate Marine Le Pen and asked her if she has given up on the prospect of winning the presidency. Unsurprisingly she disagreed.

    Not at all.. Victory is in our reach. The media seem not to hear the anger in our country that will express itself in the polls on Sunday..
     
     
    Le Pen isn't giving up on victory 



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  • A vision of mixed markets as the United States waits on the jobs report at 13:30 ET.


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  • The president of the European Commission, Jean Claude Juncker, is currently giving a state of the union speech.

    The speech is being delivered in French as Juncker says "English is losing importance in Europe." 

    Ouch.
    Comment ()
  • Steve Sedgwick reminds us that a falling oil price is often viewed as a negative sentiment but it should be remembered that it will help producing industries.

    Earlier, before oil turned higher, Steve gave us 4 or 5 reasons why sentiment is turning bearish on oil. Click play to hear his rundown.

    by david.reid


    Comment ()
  • Did you hear the one about the Scottish rapper?

    Elon Musk considers calling the digging machine for his Boring Company 'Snoop Dug'

    CNBC"Snoop Dug" and "Ultimate Boring Machine, the Second" are candidates for Elon Musk's digging machine for his tunneling venture.

    Comment ()
  • European markets are struggling for traction this morning but on a weekly basis, upward progress will have pleased those long on stocks.


    Comment ()
  • Oil is offering something of a mini-rally this morning after yesterday's steep falls, but  the overall sentiment remains bearish. 

    CNBC's Sri Jegarajah offers his take on the future of the oil market.

    OPEC in driver’s seat as ‘Fast and Furious’ oil stock draw eludes

    CNBCBloated global crude oil inventories are declining but not as quickly as OPEC expected, according to a CNBC poll.

    Comment ()
  • Thomson Reuters has released its weekly Investment Banking Scorecard, a group of "fast facts" indicating the state of deal making in global markets. The numbers show the pick-up in M&A activity this year continues.
     
    • Worldwide cross-border M&A totals $443.2 billion, up 22 percent compared to YTD 2016
    • Global private equity M&A up 44 percent versus same period last year with $183.4 billion in deals
    • Global equity capital markets activity totals $251.3 billion, up 44 percent compared to a year ago
    • U.S. follow-on activity totals $46.8 billion, up 8 percent compared to YTD 2016
    • Asia (ex-Japan) debt capital markets activity hits $472.5 billion, down 41 percent compared to a year ago
    • Global high yield corporate debt up 68 percent compared to 2016 with $152.5 billion raised this year
    Comment ()
  • Warren Buffett revealed to CNBC his firm has sold around 30 percent of its stake in IBM.
     
    He says the company has run into tough competition, and his firm sold the shared as they topped $180. Buffett's company previously owned around 9 percent of the company.
     
    IBM shares have dropped about 1.8 percent in premarket trade on the news
     
     
    Comment ()
  • Warren Buffett has sold IBM shares, and 'revalued' tech icon downward, cites 'big strong competitors'

    Warren Buffett tells CNBC that he sold shares and "revalued" his view of IBM downward as the company has run into stiff competition.
    Comment ()
  • The euro earlier touched 6-month highs today, as markets anticipate Emmanuel Macron winning the second round of the French presidential election.
     
    The latest Opinionway polls see Macron beating far-right candidate Marine Le Pen in the vote by 62 percent to 38 percent.
     
    Another poll by Ipsos Sopra Steria sees Macron winning by a similar margin: 61.5 percent to 38.5 percent.
     
    Jean-Philippe Lambert, partner-in-charge of the Paris office at Mayer Brown, says anxiety around a possible "Frexit" have gone down considerably because of the poll predictions.
     
    One reality remains, however, which is that more than 50% of the French have expressed strong dissatisfaction on European issues through their first round vote in favour of stalinian nostalgics, pro-bolivarians candidates or nationalists.
     
    Once elected, Macron will have to manage pressure from the street to demonstrate that France has not abandoned its sovereign powers to the EU and ensure that he has the support of a parliamentary majority, which is what he needs if he is going to shape social and economic reform.
     
     
     
    Comment ()
  • How should you trade the French election?
     
    Jordan Rochester, FX strategist at Nomura, has produced a detailed guide on how to trade the euro and French bonds around the upcoming Frence presidential election. Here are the top lines from his report.
     
    Macron is widely expected to win, but a surprise Le Pen victory could occur.
     
    If turnout is as low as some polls suggest, 65% in some cases, then a Le Pen victory is not impossible. If Ms Le Pen wins we would expect EUR/USD to test parity, potentially falling to 0.97 and 10 year OATs to sell off by 30bp.
     
    Our base case is that Mr Macron wins, both EUR and OATs rally, but the difference is that we would expect the EUR rally to continue by year-end to 1.15, but we would eventually fade the rally in OATs as tighter policy from the ECB is on the way.
     
    The euro has steadily gained against the dollar over the past two weeks, although it dipped a little today, hitting resistance at the $1.10 level.
     
     
    However, Rochester reckons it could climb higher.
     
    We expect a Macron victory and expect EUR to have a relief rally. EUR would trade materially higher beyond the knee-jerk reaction after the event risk with the ECB moving towards tighter policy over the year, so we target EUR/USD at $1.15 by year-end.
     
    On the rates side, on a Macron win the overarching theme in markets will likely be an ECB normalisation. We continue to hold tighter 2 year schatz swap spreads and Eonia curve steepeners. We maintain a short bias on 30yr OATs vs. 30yr Bunds and SPGBs.
     
    Meanwhile, the yield on 10-year French and German bonds has narrowed. Here's how the spread is looking over 12 months.
     
     
     
    Comment ()
  • Emmanuel Macron remains the expected choice to win the French presidential election this weekend, but what would a President Macron mean for markets?
     
    Jaisal Pastakia, investment manager at Heartwood Investment Management, thinks a Macron win would be positive in the short term.
     
    This outcome may also encourage global investors to look at Europe once again, which would be supportive of our contrarian overweight position in European equities. Macron is regarded as a transformational candidate who offers something new to French politics.
     
    There are, though, questions as to what he can actually achieve longer term, as he is likely to be constrained by the French parliament, which approves the majority of domestic-related decisions. 
     
    Pastakia raises concerns about the parliamentary election in June. Neither Macron nor Le Pen are likely to secure a parliamentary majority, as they do not have the backing of traditional parties, which could lead to difficulties for the new president to pass new laws and reforms.
     
    Whomever wins, the next French president will have a key impact on European markets. Here's what Macron's policies could mean for the continent.
     
    Macron is calling for further European Union integration. One of his key proposals is to create a separate European budget backed by a borrowing capacity and its ‘own resources’. He supports a common fiscal framework, a common finance minister and the completion of banking union. 
     
    These are all ambitious aims. If Macron were to be successful in advancing at least some of his pro-European agenda, it could ultimately stop Europe’s ‘naval gazing’ and allow the region to move forward with advancing much needed governance reforms. This would all be viewed positively from a European perspective. However, for the U.K., Macron would be another tough voice countering Theresa May in the Brexit talks. 
     
    The French stock market is flat today, but has crept up over the past week in anticipation of the election.
     
     
    Comment ()
  • All eyes in U.S. markets are focused on the April nonfarm payrolls number. Economists polled by Reuters expect the U.S. economy to have added 185,000 jobs last month versus 98,000 in March.
     
    The unemployment rate and average hourly wages will also be released at 8:30 a.m. ET, while consumer credit is set to come out at 3:00 p.m. ET. 
     
    There are not too many earnings to watch out for. Rosneft, Cigna, Moody's and TransCanada are among the few set to report before the bell.
    Comment ()
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