Monday Morning Market News, Charts, and More
- Futures steady to start the week
- Blackstone rallies after Saudi deal
- Ford's CEO Fields to be shown the door
- Saudis, Iraq talk output cut extension
- Battery gigafactories hit Europe
- Saudi arms deal boosts defense stocks
- Delay to Facebook's original videos
- Amazon Go stores heading to Europe?
- Bitcoin tops $2,000 for the first time
— Bespoke (@bespokeinvest) May 22, 2017
— Le Crocky McCrockington (@CaptainCatus) May 22, 2017
The automaker is reportedly considering a major reshuffle of its leadership team following a slump in its stock price. Sources say CEO Mark Fields has been replaced by Jim Hackett, who oversees Ford's (NYSE:F) self-driving cars and ride-sharing unit. The departure, along with other executive changes, comes days after rumors surfaced stating Ford was planning to cut 10% of its global workforce. F +3% premarket.
The U.S. and Saudi Arabia signed hundreds of billions of dollars' worth of deals during a visit by President Trump over the weekend. Among them: $50B of energy agreements with Saudi Aramco (Private:ARMCO), a $40B U.S. infrastructure fund created with Blackstone (NYSE:BX), and an arms deal worth $350B over a decade (the largest in U.S. history).
The next stop for President Trump is a two-day visit to Israel, where he will separately meet with Benjamin Netanyahu and Mahmoud Abbas after stating their conflict is "maybe not as difficult as people have thought." He'll also visit several holy sites and Holocaust memorial Yad Vashem, following his stop in Riyadh, where he urged Islamic leaders to focus on unity in the fight against "terrorism."
Iranian President Hassan Rouhani won re-election by a wide margin Saturday, getting an endorsement for efforts to seek better ties with the West and attract more foreign investment. In his first term, he negotiated the 2015 nuclear deal to curb Iran's nuclear program and recently pledged to get the remaining sanctions lifted against the Islamic Republic.
Ramping up the pace of its testing, Pyongyang has successfully launched its second ballistic missile in a little more than a week (and the 11th missile it has fired this year). "Many more 'Juche weapons' capable of striking the U.S. will be launched from this land," North Korea's Minju Joson newspaper said in a commentary Sunday, according to the Korean Central News Agency.
The 11 members of the TPP have agreed to pursue their trade deal without the U.S. at a forum of the Asia-Pacific Economic Cooperation. "I believe at some point there will be a series of bilateral agreements with partners in this part of the world," U.S. Trade Representative Robert Lighthizer said at the conference. "Bilateral negotiations are better for the U.S. than multilateral negotiations."
Promising to work on closer eurozone ties in their first official meeting in Paris, Italian Prime Minister Paolo Gentiloni said Emmanuel Macron's election has been an "injection of trust and hope for Europe" and pushed for a common European migration policy. In turn, the French President called for a long-term roadmap to create a common euro area budget and strengthen European institutions.
The U.K. will walk away from Brexit talks unless the EU drops demands to charge it €100B to leave the bloc, Brexit Secretary David Davis told the Sunday Times. Negotiations would otherwise be plunged into "chaos," and even a £1B would be "a lot of money," he added. "We don't need to just look like we can walk away, we need to be able to walk away."
Vowing to remain in power, Brazilian President Michel Temer has asked the Supreme Court to suspend its investigation into allegations he was involved in a giant corruption scandal. "Our country will not go off the rails - I will continue at the front of the government," he declared, claiming an audio recording of him supporting bribery payments was edited afterwards.
Saudi oil minister Khalid al-Falih will visit Iraq today to discuss the extension of an OPEC-led oil output cut. The talks are significant because Iraq, the second largest OPEC producer, has displayed the greatest reluctance to commit to a supply cap. Most expect an extension of the existing output deal by 6 or 9 months when members meet Thursday for a formal OPEC meeting in Vienna.
Bitcoin climbed above $2,000 for the first time on Saturday, rising more than 4.5% to an all-time high of $2,062 due to increased demand from Japanese and Chinese investors. According to CoinDesk, the cryptocurrency's market cap - the total price of coins in circulation - gained more than $5B last week to $33.5B. Related tickers: COIN, OTCPK:BTCS
Barclays is hiring 100 new staff in its private bank as it launches its second attempt in the last seven years to win more business from wealthy clients. The push marks a change in direction for the lender after a previous failed expansion ended in 2014 with Barclays (NYSE:BCS) folding its wealth management business back into its retail bank.
A civil trial brought by thousands of RBS investors is due to open today, with plaintiffs alleging that the bank's former executives gave a misleading picture of RBS's financial health ahead of a £12B cash call in 2008. The holdouts include Wells Fargo (NYSE:WFC), the Boeing (NYSE:BA) pension fund, Bank of America Merrill Lynch (NYSE:BAC) and local British council pension funds.
A showdown in Amsterdam is also getting underway as Akzo Nobel (OTCQX:AKZOY) investors, including Elliot Advisers, begin court proceedings over the company's rejection of PPG's €26.3B takeover offer. Elliot will try to convince judges at the Amsterdam Enterprise Chamber to order an investigation into possible mismanagement and force an extraordinary meeting to vote on dismissing Chairman Antony Burgmans.
Battery-making gigafactories are about to arrive in Europe, challenging a lead Tesla (NASDAQ:TSLA) is building at a plant in Nevada. Germany's Angela Merkel is scheduled to break ground today at a €500M plant to assemble lithium-ion energy storage units for Daimler (OTCPK:DDAIF), while large-scale factories are also planned for Sweden, Hungary and Poland.
The purge continues... Fox News (FOX, FOXA) has fired Bob Beckel, a co-host of prime-time program The Five, for making an "insensitive remark" to a black IT worker. The embattled network has already parted ways with top host Bill O'Reilly, co-President Bill Shine and Chairman Roger Ailes, who died Thursday at 77.
Facebook's big push into original video may take longer than expected. It's not entirely clear what's causing the delays, but numerous sources believe they are product-related, meaning Facebook (NASDAQ:FB) is still building the video feature into its app and website. TV efforts could now take until late July or early August, and it's possible it may take even longer.
BP is celebrating the start of production from Quad 204, one of the largest field redevelopments in North Sea history. Output from the project will ramp up to 130K bpd this year and help double the company's output in the area by the end of the decade. BP and its partners budgeted £4.4B for the venture.
Major blow to Big Tobacco? A key lobby group has cut its ties to the industry following criticism over its attempts to influence tax policy in the sector. The International Tax and Investment Center, which has been sponsored by British American Tobacco (NYSEMKT:BTI) and Philip Morris (NYSE:PM), has asked tobacco representatives to resign from its board and will no longer accept sponsorship contributions from tobacco companies.
As part of a continuing drive to spin off non-core assets, AstraZeneca (NYSE:AZN) has sold the European rights to its aging beta-blocker heart drug Seloken to Italy's Recordati (OTC:RCDTF) for $300M. Describing 2017 as a "pivotal" year, AstraZeneca is putting its faith in a series of new drugs in an effort to deliver fresh growth and reverse years of revenue declines.
A merger of equals... Huntsman (NYSE:HUN) and Clariant (OTCPK:CLZNY) have revealed a $20B all-stock tie-up, in the latest high-profile transaction across the diversified chemicals sector. The business, to be called HuntsmanClariant, will create a formidable industry challenger, with headquarters in Switzerland but main operations in Texas. HUN +5.6% premarket.
Amazon could be looking to expand its cashier-free grocery stores to the U.K. and Europe in the future. The company recently filed several trademark applications related to its supermarkets with Britain's Intellectual Property Office and its EU equivalent. Amazon's (NASDAQ:AMZN) Go stores are designed for customers to walk in, take what they want, and leave, all without having to go through a checkout line.
Japan's SoftBank and Saudi Arabia's sovereign wealth fund have launched the world's largest technology fund, a nearly $100B vehicle that will acquire both minority and majority stakes in both private and public companies. Softbank (OTCPK:SFTBY) CEO Masayoshi Son said the Vision Fund "will help build and grow businesses creating the foundational platforms of the next stage of the Information Revolution."
In Asia, Japan +0.5%. Hong Kong +0.9%. China -0.5%. India +0.4%.
In Europe, at midday, London +0.4%. Paris flat. Frankfurt -0.5%.
Futures at 6:20, Dow flat. S&P -0.1%. Nasdaq flat. Crude +0.9% to $51.10. Gold +0.2% to $1256.10.
Ten-year Treasury Yield flat at 2.25%