World Markets Live - May 9 - CNBC Live Events

CNBC Live Events

World Markets Live - May 9

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.
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    These are the top headlines this morning.
    • The VIX falls to its lowest level since 1993, as the S&P and Nasdaq hit record highs, while Apple's market cap tops 800 billion dollars for the first time. 
    • Donald Trump was warned that his original National Security Adviser could be blackmailed by Russia, according to Sally Yates, who tells Congress that Michael Flynn was compromised.
    • South Koreans head to the poll booths to vote in a new leader after months of uncertainty following former President Park Geun-hye's impeachment. 
    • Commerzbank results hit the wire as investors look out for the impact its radical overhaul will have on earnings in the short-term. 
    Comment ()
    Commerzbank reports a Q1 operating profit of 314 million euros, compared to 282 million euros for last year.
    Revenues before loan loss provision was up at 2.4 billion euros. The bank expects loan loss provisions for ship finance to be in the range of 450 million to 600 million euros.
    Comment ()
    U.S. markets finished the session flat yesterday, despite the Nasdaq and S&P 500 hitting intraday highs.
    Meanwhile, the VIX volatility index, a common measure of fear in the stock market, is at a more than 20-year low.
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    Adecco's first quarter net income of 176 million euros has exceeded analyst forecasts. Revenue for the quarter also beat estimates, with the Swiss company reporting 6 percent organic revenue growth in the quarter.
    Alain Dehaze, CEO of Adecco, says he encourage French president-elect Emmanuel Macron to reform labor markets.
    The election of Emmanuel Macron is good news for Europe, but is also good news for the labor market because he has been already one of the architect of the previous labor reform and more needs to come. We expect, thanks to this election, another reform. He has announced this, so this will allow flexibility, it should attract investment and drive competitiveness for France.
    Comment ()
    Alain Dehaze, CEO of Adecco, says France must become more competitive if it wants to attract investment.
    This is about cost. This is also about flexibility and Macron is intending to work on both, so I think we will see what parliamentary election will give, because that is also an important moment., but I would say the direction is good for us.
    Comment ()
    Emmanuel Macron's 'En Marche' party has rebranded itself 'La République En Marche', ahead of France's Parliamentary elections next month where President-elect Macron will seek to win a majority in the legislature.
    The party will announce the 577 candidates for all Parliamentary seats later this week. 
    Comment ()
    Emmanuel Macron's inauguration will take place this Sunday.
    The Parliamentary elections will prove a challenge next month. Normally, the winner of the presidential elections can expect their party to gain a majority in these elections, but Macron might not enjoy this advantage.
    Teneo Intelligence has shared this timeline for the important events that lie ahead for Macron.
    Comment ()
    Donald Trump was warned that his former National Security Adviser Michael Flynn was in a position to be blackmailed by Russia, says Sally Yates, the deputy attorney general under President Obama.
    Yates told a Senate panel how she warned top White House officials that General Flynn misled Vice-President Mike Pence and others about his conversations about sanctions with a Russian ambassador and put himself in a position where he could have been blackmailed by Russia.
    "Not only did we believe that the Russians knew this, but that they likely had proof of this information," Ms. Yates said, according to a Reuters report. "That created a compromise situation, a situation where the national security adviser essentially could be blackmailed by the Russians."  
    Former deputy attorney general Yates.
    Donald Trump criticised Yates ahead of her testimony before a Senate subcommittee on his presidential campaign’s ties to Russia, where she gave evidence about alleged Russian meddling in the 2016 presidential election and possible collusion between the Trump campaign and the Kremlin.
    Comment ()
    Billionaire investor Warren Buffett says he doesn't buy or sell stocks based on election results -- telling CNBC "it's a question of owning businesses. If I wanted to own farms, I wouldn't be buying and selling them based on an election." 
    Buffett also reiterated his confidence in the stock market -- telling CNBC that any short-term volatility is outweighed by long-term gains.
    You can watch the full interview with Warren Buffett here.
    Comment ()
    Uniper reports Q1 EBIT down 41 percent at 514 million euros, though this was slightly better than the 501 million euros predicted by a Reuters poll.
    The company says its debt stood at 3 billion euros at the end of March, versus 4.2 billion euros at the end of December.
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    E.On affirmed its 2017 forecast today, after reporting Q1 results.
    Net profit was down 46 percent at 628 million euros. EBIT was 1.04 billion, against a Reuters expectation of 1.06 million; EBIT was down 34 percent. 
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    Germany's Munich Re reports it is "well on track" to meet its annual guidance. The company reported quarterly profit of 557 million euros.
    Its operating result increased year on year to 952 million euros. For the quarter, gross premium revenues came to 12.45 billion euros.
    Comment ()
    South Koreans are heading to the polls to pick their next President after the impeachment of former leader Park Geun-hye.
    Moon Jae-in is seen as the favourite to win in polls. The Democratic party candidate has discusses meeting with the head of North Korea.
    Polls are set to close at 13:00 CET.
    Comment ()
    Europcar reports Q1 revenue of 439 million, versus a result of 418 million a year before.
    The vehicle hire service confirmed its 2017 guidance, reporting a net income of 19 million euros for the quarter, versus a loss of 20 million euros this time last year.
    Comment ()

    The Fed's next big challenge

    Sameer Goel, Deutsche Bank, weighs in on the approach he thinks the Federal Reserve will adopt to unwind its balance sheet.
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    Warren Buffett told CNBC why he thinks it's a mistake to invest in bonds.

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    Today marks the 72nd anniversary of the Soviet Union's defeat of Nazi Germany in the Second World War. The Russian government is commemorating the victory with a huge parade, which also serves to showcase the country's military might.  
    Christopher Granville, managing director of EMEA & global political research at TS Lombard, discusses how relations are developing between Russia and the West.
    Well the mood in the geopolitical sphere is almost as volatile as the old one. We go from euphoria to gloom and back again. We cast our minds back to Trump’s election last November and it seemed that all would be forgiven; we would have friendship breaking out. 

    And then, with the Russia-related furore in Washington DC in the early part of the Trump administration and now a little bit coming back with this story about the White House being warned about General Flynn, we’re getting back to an even keel.  
    Comment ()
    These are the top stories for the hour.
    • Commerzbank beats forecasts despite concerns its radical overhaul could weigh on earnings, as the German lender books a one-off gain.
    • The CEO of Adecco tells CNBC France needs to get more competitive, as growth in Southern Europe helps the world's largest staffing company beat expectations on the top and bottom line.
    • First quarter profits at E.ON halve as weaker sales across its wind business and U.K. unit compound adverse currency effects.
    • Elliot Advisors says it will take Akzo Nobel to court, as it seeks to dismiss the company's Chairman after the Dutch paint maker rejects a third bid from rival PPG.
    Comment ()
    Lots of German data is coming out today.
    March industrial output shrunk 0.4 percent month on month, although this follows revised growth of 1.8 percent for February.
    The trade surplus narrowed to 19.6 billion euros for March, versus forecasts of 20.9 billion. Exports grew 0.4 percent on the month, while imports grew 2.4 percent on the month.
    Comment ()

    A former high ranking Justice Department official, Sally Yates, says she warned the Trump administration that former National Security Advisor Michael Flynn might be at risk of blackmail by Russia. NBC National Correspondent Peter Alexander has the details.

    Comment ()
    German reinsurer Munich Re has reported first quarter net profit of 557 million euros, just shy of analyst estimates. The firm has said it is on track to meet its full-year guidance. 
    Jörg Schneider, CFO of Munich Re, says the company is achieving an income of 3.6 percent return on investment. 
    There is still some downward pressure because our reinvestment rates stands at roughly 2 percent. That means there’s still some way to go, but also that seems to be bottoming out, especially with interest rates rising in the last couple of months.
    He adds that he hopes rates will start to normalise in Europe.
    Comment ()
    Discussing the insurance sector, Henry Dixon, fund manager at GLG, says the car insurance sector is interesting.
    There was much made of the Ogden rate change, which regrettably does mean our premiums are going to go up this year, but I think we can look at Ogden rate review as approaching something of a catastrophe. As you look back at the insurance sector for years and years and years, you should always buy into it the day after its catastrophe.
    Comment ()
    Here's a round up of the major earnings updates today. It's another big earnings day in Europe and Germany is taking centre stage.
    Commerzbank has reported first quarter net profit of 217 million euros, topping analyst forecasts. This largely due to the recovery in the value of its public finance portfolio, which helped offset an 18 percent fall in operating earnings in its corporate clients business.
    E.ON has suffered a near 50 percent drop in net profit in the first quarter, as the German utility's earnings were weighed down by currency effects and higher costs in its German and UK markets. The stock is called lower in pre-market trade.
    Dialog Semiconductor has seen operating profit plunge more than 80 percent. The company has recently been hit by analyst downgrades amid concerns its biggest customer - Apple -  is developing an in-house solution to replace the German group's power management chips. Dialog did manage to beat expectations on an underlying basis, while forecasting good revenue growth for the rest of the year.
    In Switzerland, Adecco has exceeded estimates on the top and bottom line thanks to a strong performance in Europe. The world's largest staffing company saw a 6 percent increase in organic growth in the quarter, despite an uncertain global macro environment. This as revenues in its main market, France, rose 8 percent.  Shares are called to open higher, as analysts have called the results "very strong."
    Comment ()
    Here are the opening calls for European markets. Investors are looking for the next catalyst which will lead to upside risk.
    European stocks closed lower on Monday on profit-taking after Macron secured a victory in the French presidential elections.
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    Continental has raised its 2017 sales forecast by 500 million euros to over 43.5 billion euros. 
    The company reports Q1 EBIT of 1.17 billion euros, versus 1.09 billion a year ago. It expects strong business development to persist in the second quarter.  Net profit in the first quarter came to 794.6 million euros.
    Comment ()
    Olivier Paquier, head of SPDR ETFs France, Monaco, Spain & Portugal at State Street Global Investors, explains the market’s reaction to yesterday’s presidential election result.
    Macron managed to reassure the markets on Sunday and he made sure that the investors made the right choice. They were already forecasting his win from the first round. They felt reassured and he is now bringing good hopes for a Parliamentary election that will bring even further momentum for the French economy and the European economy as a whole.
    Comment ()
    The former French prime minister Manuel Valls has said he wants to stand as a candidate for the new political movement "En Marche".

    En Marche, or Onwards! was started only last April by the president-elect Emmanuel Macron.

    Valls is looking stand to for En Marche in parliamentary elections in 6 weeks time. Macron's party has, so far, not yet accepted his name on their ticket.

    In the upcoming elections, Emmanuel Macron will seek to gain control of parliament and has previously stated he wants to field candidates in all 577 constituencies.

    Socialist Valls is now backing centrist Macron
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    The French budget balance was minus 29.6 billion euros at the end of March, versus minus 27.5 billion euros the year before, the country's finance ministry has reported.
    Meanwhile, the Bank of France estimates Q2 French GDP growth at 0.5 percent 
    Comment ()
    European markets are now open. The pan-European Stoxx 600 opens higher.
    The market closed 0.13 percent lower yesterday on profit-taking as investors cashed in on  Emmanuel Macron's French election victory.
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     Everyone is telling me that Elliott Advisors aren't going away anytime soon.
    On set, Gemma is telling Geoff and Steve that activist investors are serious about coercing Akzo Nobel into engagement about a possible sale to rival PPG. 26 billion euros is the latest bid. 

    Elliot also wants to remove Akzo's chairman Antony Burgmans.

    Gemma says a separation by Akzo could be one method of quickly realizing at least some cash and that would be accompanied by a dividend of 1.6 billion euro dividend.

    CNBC's Gemma Acton 

    Henry Dixon of GLG chips in. He says investors are frustrated that previous bid issues have been addressed by subsequent PPG bids but Akzo Nobel appear reluctant to even consider the possibility of a sale.
    Comment ()
    The oil & gas sector is the biggest gainer on the Stoxx 600 at the start of trade. Most sectors are making gains so far.
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    German earnings are in focus today.
    Underlying profits at Dialog beat expectations in the first quarter, although it warned of a seasonal sales dip in the second quarter. the share price initially rose more than 1 percent at the open, but this has pared back.
    Commerzbank has reported first quarter net profit of 217 million euros, topping analyst forecasts.
    E.ON suffered a near 50 percent drop in net profit in the first quarter and the German utility's earnings were weighed down by currency effects.
    Meanwhile, in Switzerland, Adecco's results exceeded estimates on the top and bottom line thanks to a strong performance in Europe. 
    Comment ()
    These are the stocks moving to the top and bottom of the Stoxx 600 index this morning.
    Nets, a Danish payment services provider, is near the top of the index after Q1 results beat estimates. It earned net revenue of 1.9 billion Danish krona, with an adjusted EDITBA of 626 million krona.
    Utilities are under pressure today. Centrica reported its profit margins took a hit due to warmer weather and weak commodity prices.
    Comment ()
    Kevin Boscher, Chief Investment Officer at Brooks Macdonald Asset Management has joined the team on set and Geoff immediately asks if the Macron victory can generate any short-term trading strategy.

    There is now question that Europe has picked up on the back of an improved global economy. The ECB is very supportive. 

    You have to think if Macron can get reformist policies through that will boost French growth and it will be supportive of wider Europe.

    Having said that there is a short-term opportunity, Boscher highlights his belief that Europe has long term fundamental problems that it cannot escape.

    He cites:

    1. Serious economic imbalances between countries.
    2. High levels of debt. 
    3. Poorly capitalized banks. 
    4. Ongoing demographic issues.
    Comment ()
    Shares in German insurer Munich Re are dropping this morning after the company's first quarter results.
    The firm reported after-tax profits decreased 28 percent to 557 million euros, below an expected rise of 47 percent to 640 million euros. The company was unable to offset higher claim costs with income from investments.
    Shares are down nearly 2 percent. The share price is flat over 3 months.
    Comment ()
    We are receiving live pictures of V-Day celebrations in Moscow's Red Square, which is hosting a massive military parade.

    President Vladimir Putin has now started making an address to his attentive military.

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    Shares in Akzo Nobel are higher again today. This after the threat of legal action by top 5 investor Elliot Advisors.

    Elliot wants Akzo to pay more attention to the most recent takeover bid by U.S. firm PPG.

    Comment ()
    Elliott Advisors has launched legal action against Dutch paint maker Akzo Nobel after the firm rejected a third takeover proposal worth more than 26 billion euros from U.S. rival PPG.
    Elliot is seeking to oust Akzo Nobel's Chairman Antony Burgmans, asking a judge to call for an extraordinary shareholder meeting to discuss the matter. In a statement, Elliot said Burgman's decision to reject the bid was a "flagrant breach" of the board's duties. 
    Elliott Advisors is a top 5 shareholder in Akzo Nobel. Elliott Advisors is critical of the decision to reject the PPG bid without entering into any constructive form of engagement with the company. Elliott Advisors said it considers the reasons given by Akzo Nobel's board for rejecting the bid as "unconvincing and unsupported by any available evidence."
    Comment ()
    On the topic of M&A, CNBC's Geoff Cutmore suggested firms might be hesitant to make acquisitions at a time when interest rates are starting to rise.
    Kevin Boscher, chief investment officer at Brooks Macdonald Asset Management, says his firm’s view is central banks will maintain accommodative interest rates.
    Inflationary pressures remain very subdued. Global growth has picked up, but not really to the point where central banks have to worry about a longer term rise in inflation or inflationary expectations, so I think interest rates will remain supportive. 
    In the meantime, companies have plenty of cash and they are in a reasonable position from a balance sheet point of view. Cash flows are strong.
    Boscher thinks companies will continue to look for M&A opportunities, and praises activist shareholders for putting pressure on companies to look carefully at deals and be well-managed.
    Comment ()
    These are the top headlines following the market open.
    • Commerzbank shares trade higher after a one-off gain sees it beat forecasts, despite concerns its radical overhaul could weigh on earnings.
    • The CEO of Adecco tells CNBC France needs to get more competitive, as growth in Southern Europe helps the world's largest staffing company beat expectations on the top and bottom line.
    • First quarter profits at E.ON halve as weaker sales across its wind business and U.K. unit compound adverse currency effects. 
    • Elliot Advisors says it will take Akzo Nobel to court, as it seeks to dismiss the company's Chairman after the Dutch paint maker rejects a third bid from rival PPG. 
    Comment ()
    U.K. gilt yields are on the rise, climbing to their highest level since late March.
    The 30-year gilt yield also rose, hitting a 7-week high of 1.852 percent.
    This comes ahead of the Bank of England's monetary policy committee meeting on Thursday
    Comment ()
    Steve takes us through the major market movers after 30 minutes of European trade. As shares in energy supplier Centrica fall, Steve elaborates on his earlier tweet: 

    Tap play to hear the rundown of what's moving in the markets.

    by david.reid
    Comment ()
    Ahead of the June 8th U.K. general election, opposition leader Jeremy Corbyn has told BuzzFeed News he will carry on as leader of the Labour party even if he loses the election.
    "I was elected leader of this party and I'll stay leader of this party," he said.
    Comment ()
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