Monday Morning Reads
- Fight For Control
- 5,000 +++++
- No Nukes
- The inventor of “ bond vigilantes” explains why they just showed up in Italy.
- Bitcoin hammered after exchange was hacked.
- Late cycle can see big gains
- Running out of workers.
- Just got a whole lot cheaper.
- Stability pledge rallies Italian assets
- Cryptos punished in Sunday action
- Amazon slammed over plant conditions
- Full self-driving features from Tesla
- Decision on AT&T-Time Warner merger
- 'Three strikes you're out' for ZTE
- Golden Arches in North Korea?
- Big loss for Xiaomi ahead of IPO
Open Interest Changes:
Unusual Option Action:
Investors are applauding clear commitments by Italy's new finance minister, with the euro up 0.3% to $1.1809, and the country's main stock market index, the FTSE MIB, 2.6% higher. "We are not discussing any proposal to exit the euro," Giovanni Tria told Corriere della Sera, adding that "we are not focused on keeping our accounts in order and bringing down the debt because of what Europe tells us, but because we should not undermine trust in our financial stability." Italian banks are leading the rally, with UniCredit (OTCPK:UNCFY) +5%, UBI Banca (OTC:BPPUY) +4%, Intesa Sanpaolo (OTCPK:ISNPY) +4.4%, MedioBanca +2% (OTCPK:MDIBY) and BMPS +3.5% in Milan.
President Trump on Saturday refused to endorse a G7 statement pledging to "fight protectionism and reduce tariff barriers," saying trade among the G7 nations should be free of tariffs and other barriers. "Based on the fact that Canada is charging massive Tariffs to our U.S. farmers, workers and companies, I have instructed our U.S. Reps not to endorse the Communique as we look at Tariffs on automobiles flooding the U.S. Market!" he wrote in a tweet.
New Malaysian Prime Minister Mahathir Mohamad has called for a review of the Trans-Pacific Partnership, saying "small, weaker economies must be given a chance to protect their products." The news is a blow for the 11-member trade pact, which was finalized after tough negotiations earlier this year following the withdrawal of one of the original signatories, the United States.
The pound could be in for a wild ride this week as the U.K.'s Brexit bill goes to a vote in parliament. Theresa May wants MPs to throw out 15 amendments, but there is fear the Labour party will combine forces with about 15 rebel Tories to defeat ministers on a range of issues. Investors also have to weigh up U.K. data, with production, jobs and inflation over the next few days.
More than three quarters of Swiss voters have rejected the so-called Sovereign Money initiative known as "Vollgeld," which would have had big repercussions beyond Switzerland. The change would have given commercial banks a harder time extending credit, effectively creating cash, allowing only the SNB to become the monopoly provider of Swiss francs.
History in the making... President Trump has landed in Singapore for a summit with Kim Jong-un that will discuss North Korea's denuclearization. Those arriving with the president on Air Force One reportedly include Secretary of State Mike Pompeo and National Security Advisor John Bolton. Enemies since the 1950-53 Korean War, the sitting leaders of both countries have never met previously.
During a summit between Kim Jong-un and Moon Jae-in in April, North Korean officials said the isolated regime wants to modernize its economy. Details? Chung-in Moon, a special adviser to president Moon, revealed that the effort would include American investments like McDonald's (NYSE:MCD) or a Trump-branded tower. The operations could also reportedly provide a guarantee to North Korea's security.
The crypto market tanked on Sunday, with bitcoin dropping 10% to under $7,000, following the hack of a relatively small South Korean exchange called Coinrail. Reports also suggested U.S. regulators were examining possible manipulation affecting the crypto futures market and that the CFTC stepped in to subpoena several exchanges - Coinbase, Bitstamp, itBit and Kraken.
One of the largest recent leveraged buyouts... KKR is nearing a deal to buy Envision Healthcare (NYSE:EVHC) for $46 a share, or about $5.5B, sources told the WSJ. The price represents a 5% premium to Envision’s closing price of $43.64 on Friday and nearly 70% above where the stock traded when the review was announced. Including debt, the deal is worth about $10B. EVHC +2.1% premarket.
Contract manufacturer Foxconn is investigating a plant in China that makes Echo devices for Amazon (NASDAQ:AMZN), after U.S. watchdog China Labor Watch criticized what it described as harsh working conditions at the factory. "We are carrying out a full investigation... if found to be true, immediate actions will be taken to bring the operations into compliance with our Code of Conduct," Foxconn (OTC:FXCOF) said in a statement.
The saga of the intended merger between AT&T (NYSE:T) and Time Warner (NYSE:TWX) is one step closer toward the finish line, with a ruling due on (or around) Tuesday, June 12. Although the outcome of the court case could be appealed by whichever side loses, neither party may have much fight left in them. The merger was first announced in October 2016.
For the first time, Electronic Arts (NASDAQ:EA) will let people subscribe to play its newest PC games, embracing a model analysts believe could eventually change how people access and select which games to play. The company plans to charge $15 a month, or $100 annually, for access to more than 100 of its titles as well as some from other publishers.
A costly compressor problem that grounded Boeing (NYSE:BA) planes has now been found in a different type of Rolls-Royce (OTCPK:RYCEY) engine, compounding pressures on a group that is due to cut more than 4,000 jobs this week. Wearing out issues among Trent 1000 package C engines, which have forced inspections and angered airline clients, are now said to affect a "small number of high life Package B engines."
More emissions cheating? The emissions scandal is still hanging over the German car industry amid a new report that up to one million Daimler (OTCPK:DDAIF) diesel cars contained illegal defeat devices. German prosecutors have also widened an emissions cheating probe against VW's (OTCPK:VLKAF) luxury car brand Audi (OTCPK:AUDVF) to include CEO Rupert Stadler among the suspects accused of fraud and false advertising.
Tesla is set to release Version 9 software in August, according to Elon Musk, with updates set to enable "full self-driving features." While the company has "rightly focused entirely on safety" with previous versions amid limitations on autonomous vehicles, there may now be some situations where it's genuinely acceptable to let go of the steering wheel. TSLA +1% premarket.
The Golden State Warriors have won their third NBA championship in four seasons, sweeping the Cavaliers with a 108-85 romp in Game 4 in Cleveland. Kevin Durant was named Finals MVP for the second year in a row, the sixth player to accomplish the feat. The series, which was broadcast over ABC (NYSE:DIS), averaged 17.9M viewers a game (excluding Friday night's matchup).
Meanwhile, the overnight rating for the Belmont Stakes broadcast on NBC (NASDAQ:CMCSA) on Saturday peaked at an 8.1 with a 19 share, a strong number for a sports broadcast but well below the overnight figures posted for the past two Triple Crown bids in 2014 and 2015. Justify won the race by 1¾ lengths, becoming just the second horse to claim the Triple Crown since 1978 and the 13th overall.
Three strikes you're out... Chinese telecom equipment maker ZTE (OTC:ZTCOY) will be "shut down" if it engages in one more bad activity, according to White House trade adviser Peter Navarro. Last week, ZTE agreed to pay a $1B fine and overhaul its leadership in order to end a crippling ban on buying parts from U.S. suppliers and allowing it to get back into business.
Xiaomi lost more than 7B yuan ($1.1B) in the first quarter as the Chinese smartphone maker prepares to persuade investors to buy into the largest IPO since Alibaba (NYSE:BABA) listed in 2014. Xiaomi (BATS:XI) also published its first prospectus for the sale of China Depositary Receipts in Shanghai, stating it plans to use about 40% of the proceeds to enlarge its global footprint.
In Asia, Japan +0.5%. Hong Kong +0.3%. China -0.5%. India +0.1%.
In Europe, at midday, London +0.9%. Paris +0.2%. Frankfurt +0.5%.
Futures at 6:20, Dow +0.2%. S&P +0.1%. Nasdaq +0.1%. Crude -1.1% to $65.01. Gold -0.4% to $1297.90. Bitcoin flat at $6766.
Ten-year Treasury Yield +3 bps to 2.96%Today's Economic Calendar
11:30 Results of $32B, 3-Year Note Auction
1:00 PM Results of $22B, 10-Year Note Auction