-Fed minutes fallout: Minutes of the April 26-27 Federal Open Market Committee meeting released yesterday showed that central bank officials want to raise rates in June, provided the U.S. economy shows signs that the slowdown in the first quarter was a blip rather than a trend. The reaction in the bond market was swift, with the yield on the U.S. two-year jumping to the highest since March, while sovereign bonds in Europe are also declining this morning. The U.S. dollar surged to a seven-week high in the immediate aftermath of the release of the minutes and was trading at $1.1219 to the euro at 5:55 a.m. ET. Market-implied odds of a rate rise in June have risen from 4 percent earlier this week to 32 percent this morning.
-Markets are lower: The MSCI Asia Pacific Index lost 1 percent overnight as the stronger dollar weighed on commodity prices. In Europe, the Stoxx 600 Index was 1.2 percent lower at 6:05 a.m ET, again with the Fed getting most of the blame. Travel company Thomas Cook Group Plc tumbled 16 percent as disappointing earnings coincided with the overnight disappearance of an EgyptAir jet over the Mediterranean Sea. S&P 500 futures were 0.4 percent lower.
-A takeover offer, a merger, and a capital raise: Confirming Bloomberg’s earlier story, Bayer AG made an unsolicited takeover offer for Monsanto Co. which said in a statement released this morning that it is reviewing the offer. Bayer shares fell 8.4 percent to 88.37 euros as of 5:59 a.m. ET in Frankfurt trading. There’s a merger in the under-pressure world of oil-services companies as Technip SA and FMC Technologies Inc. agreed to combine in an all-stock deal that will create a $13 billion company. Tesla Motors Inc., meanwhile, said that it will sell about $1.4 billion in stock to help fund the expansion needed to boost production to 500,000 vehicles by 2018.
-Pound turnaround: While much of the currency market is looking to dollar strength today, the turnaround in the British pound this week has been remarkable. The currency has shaken off the tag of ‘worst performing Group-of-10 currency of 2016’ as polls published yesterday show the ‘remain’ lead in the Brexit referendum is gaining. The pound was given another boost this morning when U.K. retail sales surged. The currency was at $1.4633 at 6:25 a.m. ET, having been as low as $1.4340 on Monday.
-Concerns over EgyptAir: Market sentiment around the world has turned sour as the search for Egyptair Flight 804 continues. The Airbus 320 was carrying 66 people on board and flying from Paris to Cairo when it vanished from the radar overnight. Shares in Airbus (EADSF) and various European airlines are moving down in early trading. European markets are broadly lower. Shares in European holiday company Thomas Cook plunged by about 17%. The company does a lot of business in Egypt and investors worry that travelers will decide to avoid the region. U.S. stock futures are taking a step back. Most Asian markets ended the day with modest losses.
-Takeover time: German firm Bayer (BAYRY) has made an offer to buy U.S. seed company Monsanto (MON). If a deal is struck, it would be the latest example of consolidation in the agribusiness and chemical sectors. Last year, Dow Chemical (DOW) and DuPont (DD) announced they would combine to form a new industrial titan worth $130 billion. Shares in Monsanto are shooting higher premarket while Bayer stock is dropping by about 8% in Europe.
-Earnings: There are two key retailers reporting quarterly results Thursday. Walmart (WMT) is reporting ahead of the opening bell while Gap (GPS) is reporting after the close. Gap warned investors earlier this month that sales were weak in the first four months of the year and its earnings report would likely disappoint investors. Meanwhile, investors are cheering the latest Cisco (CSCO, Tech30) results from Wednesday evening. The company beat expectations and shares are rising premarket.
-Focus on Tesla: Tesla (TSLA) announced Wednesday it is selling $2 billion of its stock to finance the increased production capacity needed to meet the demand for its new Model 3 car. The Model 3 is expected to hit roads by the end of 2017. About 375,000 orders have already been placed for the vehicle.
-Wednesday market recap: It was a relatively uneventful day of trading on Wednesday. The Dow Jones industrial average and S&P 500 were essentially unchanged. The Nasdaq climbed 0.5%.