World Markets Live - September 7 - CNBC Live Events

CNBC Live Events

World Markets Live - September 7

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

    Tensions with North Korea is still hanging over markets, but there are other reasons to be cautious, according to Lee Wild, Interactive Investor’s head of equity strategy.
    Hurricanes, ongoing concerns about Donald Trump’s policy failures, and deep discussion about QE tapering both in the U.S. and Europe have temporarily pushed fears about Brexit to one side.
    For the past month, the FTSE 100 has traded largely within a 150-point range between 7,300 and 7,450. That’s not unusual in itself, markets rarely move up in a straight line for very long, but strong buying support through August at 7,300 makes it the significant level right now. It may well be tested again, if not this week then next should Kim Jong-un choose to celebrate North Korea’s founding anniversary at the weekend with another missile test.
    A surprise decision by Trump to increase the debt limit and avoid default kicks a possible government shutdown three months down the road.
    President Trump is active on Twitter this morning.
    Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics, shares his thoughts on the latest ECB press conference with Mario Draghi.
    Journalists were left scrambling to come up with relevant questions as Mr. Draghi was quick to admit in his opening statement that the euro’s strength could potentially be an issue for growth and price stability. The president said that recent volatility “needs to monitored". At a first glance this jawboning backfired.
    EURUSD was pushing higher throughout the press conference, currently trading above $1.20. But we think investors should notice that Mr. Draghi openly admitted that the stronger euro is inconvenient, and that it directly translates into a lower inflation forecast. The updated staff projections show that the ECB’s economists have pushed their 2018 CPI forecast down significantly. As a result, Mr. Draghi also hinted that the decision on the parameters of QE in part are directly tied to the path of the euro.
    That is a significant signal in our view; it means that the duration and degree of monetary accommodation is now in part a direct function of the euro. Finally, today’s price action in FX also suggests to us that the rise in EURUSD also is in part a dollar story. 
    The euro has come off the session highs hit during the press conference, coming back under the $1.20 level.
    Vistesen says Draghi also reiterated the ECB's forward guidance and rejected the idea of a change to sequencing of the removal of stimulus.
    This makes a lot of sense in light of the price action in the euro, and our original idea that the ECB could lift the deposit rate before QE is over is a long shot as long as the euro is pushing higher. 
    President Trump's nominee for the Federal Reserve board of governors Randal Quarles has been approved by the Senate banking committee by a vote of 17-6.
    The nomination of Quarles as Fed vice chair has now been advanced. Quarles would be first Trump nominee approved to join the Fed.
    A survey of economists by the Wall Street Journal sees U.S. GDP and jobs reduced in the third quarter as a result of Hurricane Harvey's impact on the economy. 
    GDP will reduce by 0.3 percent in Q3 and reduce jobs by 27,000 a month in the quarter. More than three quarters of economists polled see a Fed rate rise in December.
    Even as both interest rates and inflation sit at record low levels in U.S. and European economies, Chris Wyllie, chief investment officer at Connor Broadley, told CNBC Thursday that remaining defensive on assets could be a bad move.

    Investing defensively right now will leave you with nothing, asset manager warns

    Remaining too cautious on your investments could leave your portfolio subject to the dangers of inflation, an investment manager has warned.
    Oil prices are mixed today, with WTI down and Brent flat. Problems caused by Hurricane Harvey have reduced production and caused a short-term loss to oil prices.
    Graham Smith, market commentator for Fidelity, says the reduced production is unlikely to be long-lasting. He also commentated on the effect of oil on the global economy.
    Given that we now have more oil than we may need for the foreseeable future, price depends overwhelmingly on the amount producers want to sell. The recent past shows that, because the opening up of new American wells is now easy, higher prices stimulate more supply. With OPEC cuts now helping to support prices, US output has surged to more than nine million barrels per day.

    Paradoxically, you could argue there is still some read-through from oil prices for the global economy. With the US growing moderately well, Europe and Japan showing signs of recovery but China still growing below its potential, you might expect an oil price near to the middle of its range in recent history.

    Whether that reflection of global growth is a mirage or a reality is open to debate, but there appears to be no obvious mismatch between oil prices and economic prospects.  China’s strategy of rebalancing growth at the expense of absolute growth shows no sign of being anything other than long drawn out. Equally, the early signs are that President Trump’s ambition to grow America at a rate of about 4% to 5% per annum may have to be progressively watered down, owing to a fractured Congress.  
    Chinese President Xi says concerted international efforts are needed to solve issues in the Korean peninsula, according to Xinhua.
    Xi says facts have repeatedly proven that an ultimate settlement of the nuclear issue could only be found through peaceful means, including dialogue and consultation.
    Analysis on the latest ECB monetary policy decision and press conference is still coming in. Here are some thoughts from David Katimbo-Mugwanya, fund manager of the Amity sterling bond fund at EdenTree Investment Management.
    Despite the eurozone’s progress in terms of economic growth, inflation or rather the lack thereof remains firmly at the forefront of the ECB’s thought process regarding its QE guidance. Although there is acknowledgement of the need to shift monetary policy out of “crisis mode”, the ECB appears reticent about how it will achieve this feat.
    At this point, currency strength seems to have stayed the ECB’s hand, however, one gets the impression that inaction on its part is merely delaying the inevitable tightening and consequent market re-pricing. A decision on the future of QE is now expected to arrive in October.
    The euro remains above the 1.20 handle.
    Jean-Claude Trichet, former ECB president, is commenting on the latest decision by the central bank.
    Trichet says Draghi's most important statement was that he'd have more to say in October. Trichet says the ECB is not the only game in town: the governments and public institutions have yet to deliver economic reforms.
    Jean-Claude Trichet, former ECB president, says he has full confidence in the euro, in the governing council and in Mario Draghi.
    Yields on U.S. Treasuries are down sharply today. The 10 year yield is down by 5 basis points; the yield is at its lowest level since November.
    The Stoxx 600 remains up today. It has gained 0.36 percent so far in the session, The market close is just over half an hour awat.
    The latest EIA data on weekly crude and gasoline stocks has been released.
    Crude stocks grew by 4.6 million barrels, more then expected. Gasoline stocks were reduced by 3.2 million barrels, much less than the draw of 5.4 million barrels expected.
    Gasoline prices have pared losses, as have oil prices following the data release.
    The Greek prime minister says the country is ready and determined to exit bailout in August 2018. The prime minister says the Eurogroup decision on debt relief was very positive and France helped for this result.
    The oil market is close to being balanced, so the global production cut deal doesn't yet need to be extended, says Russia's energy minister.

    Russia's Novak says premature to extend global oil deal, market is being balanced

    It's premature to decide on extending the deal to reduce oil production as the market has been rebalancing, Russia's Energy Minister said.
    Volkswagen CEO Matthias Müller dismisses Fiat Chrysler merger discussions as speculation. He says M&A must add value. He says the company is now open to exploring M&A where it makes sense. 
    The CEO added the company is in discussion if disposing non core assets.
    Further weakness for the dollar. It has fallen against the Japanese yen and is now at its lowest level since mid-November 2016.
    State Street is to pay $35 million to resolve an SEC investigation. The SEC says the company overcharged customers by $20 million. The regulator investigated "secret markups" and disclosures tied to its electronic trading platform.
    A volatile session for the Stoxx 600, which finished up 0.26 percent. The index moved as the latest ECB meeting caused bond yields to fall sharply and the euro to rise against other currencies.
    These are how the individual European bourses finished the session.
    These are the winning and losing stocks in European trade today.
    Disney shares are the worst performer on the Dow Jones this afternoon after the company's CEO warns of lower EPS growth.
    Bob Iger warns that tourists are cancelling trips to Walt Disney World and three Disney Cruise itineraries have been cancelled.
    Shares also fell on news that Star Wars and Marvel movies owned by Disney would become exclusive to Disney's new video streaming service.
    Here's a last look at the U.S. markets.
    We'll close the blog there. Thanks for reading and join us tomorrow for more World Markets Live.
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