Today's Markets
gm all :)
In Asia, Japan -1.1%. Hong Kong +0.3%. China -0.5%. India +0.9%.
In Europe, at midday, London -0.1%. Paris +0.4%. Frankfurt flat.
Futures at 6:20, Dow flat. S&P flat. Nasdaq +0.1%. Crude -0.6% to $71.39. Gold +0.5% to $1295.80. Bitcoin -2.5% to $7318.
Ten-year Treasury Yield flat at 3%
Today's Economic Calendar
4:15 Fed's Dudley Speech
8:30 Initial Jobless Claims
9:00 FHFA House Price Index
9:45 Bloomberg Consumer Comfort Index
10:00 Existing Home Sales
10:30 EIA Natural Gas Inventory
10:35 Fed's Bostic Speech
11:00 Kansas City Fed Mfg Survey
1:00 PM Results of $30B, 7-Year Note Auction
2:00 PM Fed's Harker Speech
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
"China opposes the abuse of national security clauses, which will seriously damage multilateral trade systems," said Gao Feng, spokesman at the Ministry of Commerce, adding that it will "firmly defend" its rights and interests. The comments follow the opening of an investigation by the Trump administration into car and truck imports, which may lead to new U.S. tariffs similar to those imposed on imported steel and aluminum in March. Premarket movement: GM +1.1%, F +1.3%, TSLA +0.3%, FCAU -1.1%, TM -1.4%, RACE, +0.9%.
Economy
North Korea's senior envoy for American affairs has renewed a threat to call off an upcoming summit and warned that Pyongyang could "make the U.S. taste an appalling tragedy it has neither experienced nor even imagined." Choe Son Hui also referenced a "nuclear-to-nuclear showdown" and dubbed Vice President Mike Pence "a political dummy" for his comparisons to Libya's denuclearization.
Turkey's central bank upped interest rates by 300 bps on Wednesday in an emergency move to put a floor under the plunging lira and calm investors concerned by interventions from President Erdogan. The central bank, which had been scheduled to hold its next policy-setting meeting on June 7, increased its key lending rate to 16.5% from 13.5%, prompting a sharp rally in the Turkish currency.
Minutes from the Federal Reserve yesterday pointed to a rate increase in June, but suggested it may not be as aggressive with its hikes as many had thought. The release also signaled the central bank would be content to let inflation temporarily run above the 2% target. Officials in March penciled in three rate rises this year, including their increase that month.
A pickup in industrial output and resilient growth in services and agricultural production kept Mexico's economy turning over in Q1. The increase, equivalent to an annualized rate of 4.6%, was the largest since the third quarter of 2016. The economy has been more buoyant than expected considering negotiations with the U.S. and Canada to rewrite NAFTA.
Summer bookings for hotels on Hawaii's Big Island have fallen almost 50% since the Kilauea volcano erupted on May 3, and now cruise ships have canceled stops to the destination. The closure of the Hawaii Volcanoes National Park, the state's top tourist spot, is further costing the island $166M, and some $222M when including jobs indirectly impacted by park tourists.
Looking to stop MS-13 from crossing into the U.S. illegally, President Trump has warned of plans to cut funding for countries from which gang members originate. "We're looking at our whole aid structure... We're going to work out something where every time someone comes in from a certain country, we are going to deduct a rather large sum of money."
Stocks
The DOJ is in the early stages of a criminal probe into whether traders are manipulating the price of bitcoin and other cryptocurrencies, Bloomberg reports. It comes amid skepticism that exchanges are actively pursuing cheaters, wild price swings and a lack of regulations. Federal prosecutors are working with the CFTC, a financial regulator that oversees derivatives tied to bitcoin.
As part of efforts to reduce costs, Deutsche Bank (NYSE:DB) plans to cut 10,000 jobs, or about a tenth of its global workforce. The report from the WSJ comes ahead of the lender's annual general meeting today. The supervisory board and senior executives will also face a proposal to break up the company and questions about last month's chief executive handoff.
Another win for streaming over traditional TV. Netflix (NASDAQ:NFLX) ended Wednesday with a market cap of $152.8B, topping the valuation of Comcast (NASDAQ:CMCSA), which closed the session at $147.2B. It puts the streaming service just under Disney's (NYSE:DIS) market cap of $153.4B and many expect Netflix to soon surpass the media giant. NFLX shares are already up 70% YTD.
General Electric is not guaranteeing its 2019 dividend and is still fixing its power and capital units, according to CEO John Flannery, sending GE's stock down nearly 8% on Wednesday. What does it depend on? "It's ultimately a function of the free cash flow of the company and that's ultimately a function of operating performance and things that we do with the portfolio," he told the annual Electrical Products Group conference.
Reaffirming its commitment to the market, Procter & Gamble (NYSE:PG) will keep investing in Russian plants in 2018 and beyond, calling it "in the interest of both the U.S. and Russia to continue having good business relationships going forward." Russia's lower house of parliament this week approved a bill that would give the government authority to ban trade in certain items deemed unfriendly to Moscow, in response to a new round of U.S. sanctions.
The future of the plastic straw is up for vote today at McDonald's (NYSE:MCD) annual shareholders meeting. Already working to reduce waste and promote recycling, McDonald's is recommending investors vote against the proposal, which would phase out the drinking assistant at its 37,000 locations. A few cities in California have already banned plastic straws, while Alaska Airlines (NYSE:ALK) just eliminated plastic drink stirrers on its flights.
Fuel cell dreams... Toyota (NYSE:TM) has outlined plans for a facility producing hydrogen fuel cell stacks, a key component of fuel cell electric vehicles. It's part of a vision to mass manufacture hydrogen-powered cars, expanding their usage in zero emissions transportation. The automaker also hopes to increase global annual sales of FCEVs, including cars and buses, to at least 30,000 from 3,000 now.
Uber swung to a profit of $2.46B in Q1, compared to a loss of $847M last year, due chiefly to a $3B gain from the sales of both its southeast Asian and Russia operations. Revenue jumped 70% and gross bookings rose 55%, while three hedge funds are seeking to buy shares in the ride hailing service. That would raise UBER's valuation to $62B, up from the $48B seen around the time of SoftBank's (OTCPK:SFTBY) investment in 2017.
Apple has signed a deal with Volkswagen (OTCPK:VLKAY) to make self-driving cars, the NYT reports, in a bit of a setback from grander visions of working with BMW (OTCPK:BMWYY) and Mercedes-Benz (OTCPK:DDAIF). The latter two automakers had reportedly rebuffed Apple (NASDAQ:AAPL) requests to hand over control of the data and design of the planned vehicles. Apple originally began its car project - known internally as Titan and T172 - in 2014.
The Trump administration will publish long-delayed proposed rule changes for U.S. firearms exports today, which would move the oversight of international commercial firearm sales from the U.S. State Department to the Department of Commerce. Domestic gun sales have fallen significantly after soaring under President Obama, when gun enthusiasts stockpiled weapons and ammunition. Related tickers: AOBC, RGR
Growing frustration? Mylan (NASDAQ:MYL) is pressing its manufacturing partner Pfizer (NYSE:PFE) to do more to tackle EpiPen shortages. While Mylan owns the rights to the life saving medicine - which can stave off deadly anaphylactic shock - it subcontracts production of the auto-injector to Meridian Medical, a division of Pfizer. The FDA put the medicine on its official shortages list earlier this month.
Obamacare rates are going up again. The premium for the benchmark silver plan is projected to jump an average of 15% next year, according to the Congressional Budget Office, driven in large part because people will no longer be penalized for not having insurance. Following the double-digit increase, premiums in the Obamacare plans will continue rising about 7% each year between 2019 and 2028. Related tickers: UNH, AET, ANTM, CI, HUM, WCG, CNC, MOH, GTS, HQY, QHC, HCA, THC, UHS, LPNT, CYH, HCP, SEM
Wednesday's Key Earnings
Lowe's (NYSE:LOW) +10.4% as Bill Ackman took a $1B+ stake.
Target (NYSE:TGT) -5.7% amid biting margin pressures.
