Tuesday Morning Reads, News, Charts, and more
- First Ever Default
- Google Fined $2.7 Billion in E.U. Antitrust Ruling
- Draghi Says Stimulus Still Needed
- Fed Didn’t Make a Mistake
- Fight the Government
- Buffett Wants a Big Dea
- Effects of Takata Bankruptcy to Extend Far and Wide
- Central Bank Hedge Funds?
— Tom Hearden (@followtheh) June 27, 2017
Google has been slapped with a record €2.4B fine after EU antitrust regulators ruled the company had abused its power by promoting its own shopping comparison service at the top of search results. The penalty is the largest doled out by Brussels for a monopoly abuse case and follows a seven-year-long investigation into the search group's practices. Google (GOOG, GOOGL) is considering an appeal.
Fed Chair Janet Yellen is due to speak about global economic issues at London's Royal Academy at 1 p.m. ET. Her comments, and replies to the audience, will be monitored closely for any new insight on monetary policy and the unwinding of the Fed's massive balance sheet. Besides Yellen, a pair of Fed policymakers are due to make public appearances: Patrick Harker and Neel Kashkari.
The euro jumped above $1.1250, its highest level in nearly two weeks, after Mario Draghi signaled growing confidence in the eurozone recovery. "The threat of deflation is gone and reflationary forces are at play," he said at the ECB Forum in Sintra, Portugal. Central bank support will still need to "remain in place," however, as a rise in inflationary pressures is "not yet durable and self-sustaining."
Business leaders, academics and politicians have gathered in the Chinese port of Dalian for the World Economic Forum's annual June meeting. The theme for the gathering, also known as the "Summer Davos," will be innovation, with the focus on companies from the developing world. Notables: Didi Chuxing's (Private:DIDI) Jean Liu is attending, along with Vishal Sikka, CEO of Infosys (NASDAQ:INFY).
The Senate Republican healthcare bill would result in 22M more people uninsured by the end of the coming decade, while reducing federal spending by $321B during that time, according to the Congressional Budget Office. The figures, which were released just hours after GOP leaders revised the bill, complicate the path forward for the already-fraught legislation. Is a vote before the July 4 recess still realistic?
The White House says it has evidence that Syria is preparing to launch another chemical attack and warned that it will "pay a heavy price" for doing so. In April, U.S. forces fired 59 Tomahawk missiles (NYSE:RTN) at a Syrian air base that was linked to a chemical-weapons attack in Idlib province that killed more than 80 people.
The crisis in Brazil is deepening. The country's attorney general has formally accused President Michel Temer of corruption, making him the first sitting president to face criminal charges. While the alleged bribery scandal at meatpacker JBS (OTCQX:JBSAY) has spurred impeachment talk, it will definitely reduce the chances Temer can push through reforms needed for Brazil to rebound from its worst recession on record.
The IPO market is expected to see more deals price this week than at any time over the past two years, as a strong stock market and the performance of new listings boosts confidence. Investors that bought U.S.-listed IPOs priced in 2017 are so far reaping an average return of 12%, according to Renaissance Capital, whose exchange-traded fund IPO has returned over 22% YTD. Upcoming tickers: AKCA, ALRN, APRN, ATXI, BY, DOVA, ESQ, MRSN, TNTR, TPGH.U
An eleventh hour effort? Western Digital (NYSE:WDC) and KKR have resubmitted a bid for Toshiba's (OTCPK:TOSYY) flash memory chip unit to prevent the latter from completing a deal with its preferred bidder. The conglomerate is seeking to sign a definitive agreement with a group led by the Japanese government and Bain Capital, which has offered around ¥2T ($18B) - by Wednesday, the day of its annual shareholders meeting.
U.S. District Judge Lucy Koh has denied Qualcomm (NASDAQ:QCOM) a motion to dismiss an FTC lawsuit arguing that the chip supplier used its position in the market to compete unfairly. The ruling is a setback in Qualcomm's broad legal battle over its business practices, including a separate suit filed by Apple (NASDAQ:AAPL) that made legal arguments similar to the U.S. government.
Escalating a trade dispute ahead of NAFTA negotiations, the U.S. Commerce Department has imposed preliminary anti-dumping duties on Canadian softwood lumber. Combined with the preliminary anti-subsidy duties imposed in April, total duties on the key construction material will range from 17.41% to 30.88%. Related tickers: WY, RYN, EVA, CTT, OSB, POPE, MAS, UFPI, DEL, AMWD, KOP, TREX, LUK, LPX
Regulators in California have taken a pivotal step toward becoming the first state to require the popular weed killer Roundup to come with a label warning that it's known to cause cancer. Monsanto (NYSE:MON), the chemical's maker, has filed an appeal after losing in court to block the labeling, arguing that Roundup doesn't cause cancer and that the labels will harm the company's business.
Three CNN employees have handed in their resignations over a retracted story linking a Russian investment fund to several Trump associates. CNN (NYSE:TWX) blamed the snafu on a "breakdown in editorial workflow," explaining that "these types of stories" usually would go through several departments, including fact-checkers, journalism standards experts and lawyers, but in this case it did not.
Sprint is in exclusive talks with Charter Communications (NASDAQ:CHTR) and Comcast (NASDAQ:CMCSA) to explore a deal that could boost their plans to offer wireless service, WSJ reports. Sprint (NYSE:S) Chairman Masayoshi Son and the cable companies entered into a two-month, exclusive agreement for discussions through late-July, putting merger talks with T-Mobile (NASDAQ:TMUS) on hold. S +8%; TMUS -4.4% premarket.
Meet the "Digital Trade Chain Consortium." IBM is building a blockchain-based platform for seven big European banks that will simplify finance transactions for small- and medium-sized businesses. The project, which aims to be up-and-running by the end of the year, will mark one of the first real-world use cases of blockchain technology for financial institutions.
British lenders face an £11.4B increase in capital requirements after the Bank of England said it was raising a key buffer designed to tackle growing risks of lax lending. The central bank had earlier reversed a previous rise in its counter-cyclical capital buffer after it feared credit conditions would tighten after last year's vote to leave the EU. Related stocks: BCS, HSBC, LYG, RBS
High-powered lunches? After meeting with Narendra Modi in Washington, JPMorgan (NYSE:JPM) CEO Jamie Dimon was spotted sitting down with recently resigned UBER CEO Travis Kalanick. Dimon was there for a meeting with the prime minister regarding concerns over India's current regulatory environment, which has made it challenging to invest and expand in the country.
A radical hiring experiment is underway at Unilever (UN, UL), according to the WSJ. To diversify its candidate pool for early-career roles that are a fast track to management, Unilever has ditched resumes and traditional campus recruiting. Its new process relies on algorithms to sort applicants and targets young potential hires through their smartphones.
After filing for bankruptcy last week, Sears Canada (NASDAQ:SRSC) has received notice from Nasdaq stating it will delist the company's shares on July 3, 2017. The firm, which is closing about a quarter of its stores, has been struggling with years of losses and falling sales due to competition from big-box retailers and online merchants.
"We offer our condolences to those who lost their lives and to those who suffered injuries," CEO Shigehisa Takada said at Takata's (OTCPK:TKTDY) last annual shareholder meeting as a listed company. It was his first media appearance in more than a year and a half. The air bag supplier's defective devices have been linked to at least 17 deaths and 180 injuries around the world.
Looking to restore consumer confidence after the Dieselgate scandal, the German transport ministry is setting up a new institute to test vehicle emissions. It comes amid a discovery that two additional car models - the Opel (NYSE:GM) Zafira and Smart Fortwo made by Daimler (OTCPK:DDAIY) - produced more carbon dioxide than they should, although both are discontinued.
Shares in Fiat Chrysler (NYSE:FCAU) and Ford (NYSE:F) are down about 1.5% premarket after General Motors (GM) said it expected to fall short of its original forecast for the year. "The market is definitely slowing... it's something we are going to monitor month to month," CFO Chuck Stevens told analysts on a conference call. "Pricing is more challenging."
More self-driving car partnerships: Volvo Cars (OTCPK:GELYY) and Autoliv (NYSE:ALV) have signed a deal with Nvidia (NASDAQ:NVDA) to develop software systems for autonomous vehicles following similar pilots between the companies since the start of the year. Yesterday, Apple (AAPL) was reported to be working with Hertz (NYSE:HTZ) on autonomous testing, while Alphabet (GOOG, GOOGL) inked a deal with Avis (NASDAQ:CAR) to manage its self-driving car fleet.
In Asia, Japan +0.4%. Hong Kong -0.1%. China +0.2%. India -0.6%.
In Europe, at midday, London flat. Paris -0.5%. Frankfurt -0.4%.
Futures at 6:20, Dow -0.1%. S&P -0.1%. Nasdaq -0.4%. Crude +1.1% to $43.84. Gold +0.5% to $1252.40.
Ten-year Treasury Yield +3 bps to 2.16%
Today's Economic Calendar
4:05 Fed's Williams Speech
8:55 Redbook Chain Store Sales
9:00 S&P Corelogic Case-Shiller Home Price Index
10:00 Consumer Confidence
10:00 Richmond Fed Mfg.
10:00 State Street Investor Confidence Index
11:15 Fed's Harker: Economic Outlook
1:00 PM Janet Yellen speech
1:00 PM Results of $34B, 5-Year Note Auction