Thursday Morning Reads, News, Charts and More
- Five Things For Today
- The Gap Fill
- Trade Update
- Oil Cuts
- Wrong About China
- Bitcoin Is Up Over 400%
- Trump’s Toxic Budget
- $4 Billion Stake in NVIDIA
- Uber a ‘Ponzi Scheme,’
- Sears Posts First Quarterly Profit in Nearly Two Years
- Teenagers Don’t Understand Money
- Body Slamming the Bears…
- Futures look for further gains
- OPEC meeting begins in Vienna
- Best Buy pops after U.S. results shine
- Rally continues... Bitcoin tops $2,500
- CBO evaluates new health bill
- Next stop? Trump meets EU leaders
- AlphaGo beats Chinese master again
- Snap falls on advertising discounts
- Ford's Fields may walk away with $57M
All eyes are on OPEC's highly anticipated meeting today in Vienna, where the oil cartel and over a dozen other countries look set to extend their crude production cuts for another nine months. The producers originally agreed to slash output by 1.8M barrels per day in the first half of 2017, but there are concerns that the latest extension cap will not be required from all OPEC members, like Libya and Nigeria. Crude futures -0.9% to $50.92/bbl.
Global stocks are advancing, with U.S. indices at record highs, after Fed minutes showed policymakers are on the same page about winding down the central bank's $4.5T balance sheet, while signaling a rate hike "soon." Under the approach discussed, the Fed would allow increasing amounts of Treasury and mortgage securities to mature over time, without reinvesting the proceeds.
Treasury Secretary Steven Mnuchin is urging members of Congress to increase the U.S. debt ceiling before taking their August recess. He would prefer a "clean" debt ceiling increase, which would not include partisan provisions, as the Trump administration warned that tax receipts were coming in slower than expected.
The American Health Care Act approved by House Republicans would leave 23M more people uninsured while reducing the cumulative federal deficit by $119B in the next decade, according to the Congressional Budget Office. The report, which doesn't differ significantly from the CBO's analysis of an earlier bill, is likely to roil current Senate talks to repeal and replace Obamacare.
EU leaders are rolling out the red carpet for President Trump in Brussels, in the latest leg of his inaugural overseas trip. The atmosphere is expected to be tense amid the U.S. leader's doubts about NATO, the Paris climate agreement and the Iran deal, to all of which the EU was a party. More strains? BBC sources say the U.K. has stopped sharing intelligence with the U.S. after leaks regarding the Manchester terror attack.
The USS Dewey has sailed within 12 nautical miles of an artificial Chinese island in the South China Sea, according to reports, marking the first such challenge to Beijing since President Trump took office. The patrol, known as a freedom of navigation operation, is designed to keep critical sea lanes and strategic waters open in the Pacific Ocean.
Better than humans? Google's (GOOG, GOOGL) artificial intelligence program, AlphaGo, has beaten the world's best Go player Ke Jie for a second time, taking a 2-0 lead in a best of three series. The victory - which many thought would take decades to achieve - comes after the AI program bested South Korean Go professional Lee Sedol in a similar exhibition match last year.
Writers Guild of America members have ratified their new three-year agreement with movie/TV producers, cementing labor peace for a while with 99.2% approval. In April, the writers authorized a strike that could have jeopardized the fall TV season, and negotiations that went to the last minute produced a deal. Related tickers: CBS, DIS, CMCSA, FOX, FOXA, SNE, TWX, VIA, VIAB
Looking to draw millennial eyeballs, Facebook (NASDAQ:FB) has signed deals with Vox Media, BuzzFeed, ATTN, Group Nine and others to generate shows for its upcoming video service. The company plans two-tiered content: scripted shows of 20-30 minutes that Facebook would own, and 5-10 minute "webisode" sized clips (scripted and unscripted) that the tech giant would license.
"Snap needs to show good results in the second quarter, and it's looking to goose its ad business with offers of discounts and incentives to ad buyers," declared a report by Digiday, which cited several media buyers as sources. SNAP shares declined as much as 4% AH on Wednesday, before recovering losses to trade more than 1% lower.
Exxon Mobil's outlook has been revised to negative from stable at S&P, signaling it may downgrade the company’s AA+ rating, the second highest from the top, over the next two years. "Although ExxonMobil (NYSE:XOM) significantly reduced capital spending in 2015 and 2016, it continued to grow dividends, leading to large discretionary cash flow deficits, and an uptick in debt," said analyst Carin Dehne-Kiley.
The U.S. Defense Advanced Research Projects Agency is collaborating with Boeing (NYSE:BA) to develop a reusable hypersonic jet that can carry and deploy small satellites into low earth orbit on short notice. "The XS-1 would be neither a traditional airplane nor a conventional launch vehicle but rather a combination of the two," DARPA's Jess Sponable explained in a press release.
Without admitting wrongdoing, a lawyer for Fiat Chrysler (NYSE:FCAU) said a software update can address U.S. regulatory concerns that its diesel cars are producing excess emissions. The DOJ filed a civil suit on Tuesday accusing Fiat of bypassing emission controls in over 100K vehicles, labeling the software "defeat devices."
"This is absolutely not about taking jobs out of the U.S.," said Marc McAllister, a managing director at Harley-Davidson (NYSE:HOG) based in Singapore. Harley added that its new Thailand plant will let it avoid a 60% tariff on imported motorcycles and help it get tax breaks when exporting to ASEAN members. Still, unions representing its U.S. workers aren't happy.
Ford will pay outgoing CEO Mark Fields a sizable portion of a promised bonus for 2017, all of the promised stock awards for the year and additional retirement benefits. While the value of the package won't be disclosed until 2018, when Ford's (NYSE:F) next proxy statement is filed, Fields could walk away with about $57.5M in compensation.
A new study by Worksafe has found that Tesla's (NASDAQ:TSLA) flagship plant in Fremont, Calif. had about one-third more worker accidents and twice the rate of serious injuries as other auto manufacturers in recent years. "We may have had some challenges in the past, but... with the changes we've made, we now have the lowest injury rate in the industry by far," said a Tesla (TSLA) spokesperson.
BNP Paribas has been slapped with a $350M fine by New York's Department of Financial Services, which found a long pattern of "nearly unfettered misconduct" in the bank’s foreign exchange business. Traders at BNP (OTCQX:BNPQF) colluded with rivals in online chat rooms, executed fake trades and improperly shared confidential customer information with other banks.
Democrats on Capitol Hill are pressuring Deutsche Bank (NYSE:DB) to review private accounts held by President Trump in order for Congress to determine whether he has any financial ties to Russia. While the House Financial Services Committee has the power to subpoena the documents, Democrats would require cooperation from committee Republicans, who have not yet signed on the request.
Bitcoin has blown past the $2,500 barrier, marking a more than $500 gain since Saturday, when the cryptocurrency first topped $2,000. It comes after fifty-six companies around the world and 83% of Bitcoin miners supported the "Bitcoin Scaling Agreement." The document lays out an upgrade that should increase Bitcoin's transaction capacity. Related tickers: COIN, OTCPK:BTCS
In Asia, Japan +0.4%. Hong Kong +0.8%. China +1.4%. India +1.4%.
In Europe, at midday, London +0.1%. Paris +0.3%. Frankfurt +0.2%.
Futures at 6:20, Dow +0.4%. S&P +0.3%. Nasdaq +0.4%. Crude -0.9% to $50.92. Gold +0.3% to $1256.70.
Ten-year Treasury Yield -1 bps to 2.25%
Today's Economic Calendar
8:30 Initial Jobless Claims
8:30 International trade in goods
9:45 Bloomberg Consumer Comfort Index
10:30 EIA Natural Gas Inventory
11:00 Kansas City Fed Mfg Survey
1:00 PM Results of $28B, 7-Year Note Auction
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
10:00 PM Fed's Bullard: U.S. Monetary and Economic Policy