Global News Jun 30, 2016

  1. Bloomberg News
  2. Global News Jun 30, 2016

Bloomberg Business

-Stress test results: JPMorgan Chase & Co., Citigroup Inc., Bank of America Corp. and 27 other firms with major U.S. operations passed the Federal Reserve’s stress tests, allowing those banks to boost shareholder payouts. Morgan Stanley got conditional approval, while the U.S. units of Deutsche Bank AG and Banco Santander SA failed. Shares of the banks that passed the test are higher in pre-market trading, with Morgan Stanley flat while Deutsche Bank and Santander are lower in European trading.

-Euro area finds a little inflation: Inflation in the euro area unexpectedly returned in May, with consumer prices rising 0.1 percent from a year earlier, according to European Union’s statistics office. This bump in prices is not likely to change the ECB’s course as President Mario Draghi has already warned that the Brexit referendum result may lead to output dropping 0.5 percent below previous projections over the next 3 years. Investors are more likely to be keeping an eye on the Bank of England today, where Governor Mark Carney is due to give a speech at 11:00 a.m. ET, in an effort to reassure markets following the post-Brexit turmoil.

-More Brexit political fallout: U.K. parliamentary politics are not having a good week. The opposition leader, Jeremy Corbyn, is clinging onto power, despite a vote by his own MPs that overwhelming called on him to leave and the Prime Minister imploring him to go in the House of Commons yesterday. It has been a lively morning in the race for the Prime Minister’s job, with Michael Gove, who lead the ‘leave’ campaign with Boris Johnson, declaring that he is going to run against Johnson for the leadership. U.K. Home Secretary Theresa May also launched her campaign for the position this morning. In a Bloomberg poll, more than a third of U.S. voters see the U.K.’s decision to leave the European Union as damaging to the American economy.

-Markets rise: Markets are rising again today, but well below the pace of recent sessions. Overnight, the MSCI Asia Pacific Index advanced 0.8 percent with Japan’s Topix Index erasing an earlier rally to finish 0.2 percent lower. In Europe, the Stoxx 600 Index was 0.1 percent higher at 6:15 a.m. while London’s FTSE 100 was up 0.4 percent, consolidating its post-Brexit recovery. S&P 500 futures had advanced 0.1 percent.

-Commodity quarter: The Bloomberg Commodity Index entered a bull market this month and is having its best three months since 2010. Crude, which has surged 29 percent in the quarter is paring some of those gains this morning, with a barrel of West Texas Intermediate at $49.24 at 6:20 a.m.


CNN Money

-Brexit day five: The blue chip FTSE 100 is back to pre-referendum levels, but the FTSE 250 is still way down. The wider index is more exposed to the British economy and gives a better sense of how investors view the U.K. The pound is firmer against the dollar at around $1.34, but still about 10% off the high of $1.50 on referendum day. Meanwhile, consumer confidence has slumped in the U.K. since the referendum, according to a poll by YouGov/Cebr. «Four days of uncertainty have wiped out the gains made over the last three years,» YouGov said in a statement. The political situation remains chaotic. One of the leaders of the Vote Leave campaign, Michael Gove, has announced his bid to become the next prime minister. But another leading Brexit campaigner, former London mayor Boris Johnson, said he won’t stand — despite being the hot favorite just a few days back. Theresa May, a senior government minister who campaigned for Britain to remain in the EU, is also running. On the economic front, all eyes are on Mark Carney. The Bank of England governor is due to speak at 11 a.m. ET.

-Stock market movers — Bank of America, Italian banks: Bank of America (BACPRD) is gaining premarket, up 2%. But Italian banks are in more trouble. Shares in UniCredit (UNCFF) and Intesa Sanpaolo (IITSF) were suspended in Milan after falling 5.4% and 4.98% respectively. Banca Monte dei Paschi di Siena (BMDPF) is down 5.33% and Banco Popolare shed 2.42%.

– Earnings and economics: Ahead of the opening bell, investors will get quarterly updates from companies including Slim Jim maker ConAgra (CAG), Corona brewer Constellation Brands (STZ), Olive Garden parent Darden Restaurants (DRI) and McCormick (MKC). Micron (MU) will report after the close. Germany, Europe’s biggest economy, posted record low unemployment, after the number of jobless people fell by more than expected in June.

– International markets overview: European markets are mixed in early trading. The FTSE 100 and FTSE 250 are both down 0.3%, but Germany’s DAX and French CAC are gaining around 0.3%. Asian markets ended the session slightly higher. The Nikkei was up 0.1% and the yen remains close to all time highs. Hong Kong’s Hang Seng ended 1.75% higher. Oil prices are dipping back below $50 per barrel. U.S. oil futures gained on Wednesday after a report showed U.S. crude oil inventories plunged last week by more than 4 million barrels — the sixth straight week of declines.

– Thursday market recap: The Dow Jones industrial average gained 1.6%, while the S&P 500 added 1.7% and the Nasdaq climbed 1.9%.