Global News Jun 02, 2016

  1. Bloomberg News
  2. Global News Jun 02, 2016

Bloomberg Business

-ECB day: The European Central Bank, meeting in Vienna, is due to announce its latest monetary policy decision at 7:45 a.m ET this morning. Every economist surveyed by Bloomberg expects there to be no change in interest rates, with investors likely to focus on ECB President Mario Draghi’s press conference beginning at 8:30 a.m. With the central bank expected to begin purchases of corporate bonds this month, further details of that plan may be released, while the ECB’s own inflation projections are also due to be updated.

-OPEC meeting: Also meeting in Vienna today is the Organization of Petroleum Exporting Countries, with fractures within the organization already starting to reappear following Saudi Arabia’s signal yesterday that it was ready to consider to surprise deal in order to mend divisions that appeared following the failed Doha meeting. If there was to be a deal from this meeting, it would be a shock to analysts, with only one of 27 surveyed last month saying they expected an output target from the Vienna round. West Texas Intermediate for July delivery was at $49.16 a barrel at 5:48 a.m. ET.

-Markets await Draghi: Overnight the MSCI Asia Pacific Index dropped 0.8 percent, with Japan’s Topix index falling 2.2 percent, the most in a month, as the yen continued to strengthen following yesterday’s postponement of a sales tax increase and Prime Minister Shinzo Abe failure to outline further fiscal measures to stimulate the economy. In Europe, the Stoxx 600 was 0.3 percent higher at 5:55 a.m. ET as investors await the ECB decision. In the U.S. S&P 500 futures were 0.1 percent lower.

-Metals sink: Iron ore is at risk of losing all of its year-to-date gains, with a ton of 62-percent ore dropping to $48.40 after posting its biggest monthly loss in about five years in May. There is one bright spot in the industrial metals world—zinc— which is seeing a demand rebound just as supply for miners is dropping. Zinc for delivery in three months climbed above $2,000 a ton for the first time in more than 10 months on Thursday, with the metal gaining as much as 25 percent this year. Gold, which has also had a difficult May is higher today, but the cost of rolling futures into longer-dated contracts has risen to the highest in about six years as bullishness on the metal wanes.

-Snapchat Valued at $18 Billion in Funding Round: Snapchat Inc., an app for sending disappearing messages, was valued at $18 billion after its latest round of funding, said a person familiar with the matter. The financing pads the startup’s war chest as it attempts to evolve from a teen phenomenon into a mainstream media platform. The funding round totaled $1.8 billion, according to a regulatory filing on Thursday with the Securities and Exchange Commission. The amount includes about $650 million raised last year and an additional $1.2 billion this year.


CNN Money

-Chinese manufacturing: Two important reports on China’s manufacturing sector painted a mixed picture about trends in the world’s second largest economy.
The government’s official purchasing managers index shows the manufacturing sector was expanding ever so slightly in May, which was ahead of expectations. But Caixin’s survey — which focuses on small and medium-sized manufacturers in China — showed a contraction in activity over the same period.

-Stock market overview: A negative mood has spread across global stock markets.
The Chinese manufacturing figures and a U.S. warning about travel to Europe has dented confidence. «A travel alert for Europe issued by the U.S. State Department citing the potential for terrorist attacks at major events and tourist sites [has] further reinforced defensive behavior,» noted Mike O’Rourke, chief market strategist at JonesTrading.
U.S. stock futures are slipping a tad. European markets are mostly lower in early trading. Asian markets ended the day with mixed results. This comes after the Dow Jones industrial average and S&P 500 posted minor losses on Tuesday, though the Nasdaq edged up by 0.3%.

-Stocks to watch–Alibaba, Staples, Under Armour: Alibaba’s (BABA, Tech30) largest shareholder — Softbank (SFTBY) — said it is dumping nearly $8 billion worth of shares in the Chinese tech giant. Softbank was an early investor but now wants to cash in some of its 32% stake to boost its own financial position. Staples (SPLS) is in focus as the company announced that CEO Ron Sargent is stepping down later this month. This comes weeks after Office Depot (ODP) and Staples called off plans to merge due to concerns about antitrust issues.
Shares in Under Armour (UA) are slipping premarket after the athletics apparel company announced it would lose millions from its business relationship with bankrupt sporting goods retailer Sports Authority. Shares in competitor Nike (NKE) are also sliding premarket.

-Earnings and economic updates: Michael Kors(KORS), Lands’ End (LE) and Cracker Barrel (CBRL) are the main companies reporting quarterly results ahead of the open.
On the economic side, Wall Street will get a fresh read on the state of the U.S. manufacturing industry at 10 a.m. ET. The ISM manufacturing index is expected to show activity slowed a bit in May and flirted with contraction. The U.S. Census Bureau will release its construction spending report at the same time. And the latest Federal Reserve Beige Book will be released at 2 p.m., giving detailed information about the state of the U.S. economy. In Japan, Prime Minister Shinzo Abe announced the country would delay a planned 10% sales tax hike to avoid damaging the fragile economy. The sales tax rise — a key plank of his reform program — will be pushed back from 2017 to late 2019.

-Big day for GDP updates: Brazil and Australia’s economies are in the spotlight Wednesday as both nations report their latest GDP figures. It’s expected the Brazilian data will show the economy shrank by 6% in the first quarter, which would be a fresh low for the struggling country. Australia’s latest results show the economy grew by 1.1% in the first quarter, with much of the increase coming from the export sector.