Tuesday Morning Reads
- Draghi Learns Lesson From Fed
- The $1.4 Trillion U.S. ‘Surplus’
- North Korea Open For Business?
- Trump May Doom the Medium He Loves
- 3 Myths You Can’t Afford to Believe
- Twice as Expensive as Apple
- Slamming IHOP for Its ‘IHOb’ Rebrand
- Tariffs Won’t Make America Great Again
Open Interest Changes:
Unusual Option Action:
The meeting between President Trump and Kim Jong-un was met with a shrug by U.S. stock index futures as the two leaders signed a "comprehensive" and "historic" document that included the following four points: Establishing new US-DPRK relations, building a lasting and stable peace regime, reaffirming commitments to work toward complete denuclearization and recovering POW/MIA remains. U.S. sanctions will remain in effect for the time being and American forces will not be reduced on the Korean peninsula.
What about Iran? Speaking to reporters following the historic meeting with Kim, President Trump said he believes relations could also improve, in time, with Iran. "After the sanctions kick in - and they are brutal what we've put on Iran - I hope that they're going to come back and negotiate a real deal because I'd love to be able to do that, but right now it's too soon."
Theresa May's government has launched last-minute negotiations to quell a Brexit rebellion by her lawmakers as she faces a crucial vote today that could determine the future of Brexit and her career. The "meaningful vote" amendment hands parliament the power to direct negotiations if lawmakers vote down the divorce deal that May brings back from Brussels. Brexit backers also see it as a tool to thwart the divorce.
The mood among German investors worsened in June, with ZEW's economic sentiment survey falling to a negative 16.4 from minus 8.2 in May - the lowest level since 2012. "The recent escalation in the trade dispute with the U.S. as well as fears over the new Italian government pursuing a policy which potentially destabilizes the financial markets have left their mark on the economic outlook for Germany," said ZEW President Achim Wambach.
Refusing it permission to disembark its 629 migrant passengers, Italy's new government has claimed victory after Spain's prime minister offered safe harbor to the ship Aquarius, which has been stuck in the Mediterranean since Saturday. Under an EU agreement, the country where asylum-seekers arrive and are identified must care for them until their asylum requests are decided, a process that can take a couple of years.
U.S. economic advisor Larry Kudlow suffered a "mild heart attack" overnight, but is in "good condition" at the Walter Reed Medical Center. A former Wall Street economist, Kudlow plays a leading role in crafting trade policy on the White House's National Economic Council. He was tapped less than three months ago following the resignation of Gary Cohn over steel and aluminum tariffs.
Prices in Venezuela rose almost 24,600% in the 12 months ended May 31, according to the country's opposition-led National Assembly, though the numbers are broadly in line with those of independent economists. Inflation in May alone was 110%, amid an economic crisis that has seen serious shortages of food and medicine.
If U.S. District Court Judge Richard Leon approves AT&T's (NYSE:T) deal for Time Warner (NYSE:TWX) today, Comcast (NASDAQ:CMCSA) will formally go up against a bid from Disney (NYSE:DIS) to acquire most of Twenty-First Century Fox (NASDAQ:FOX), CNBC reports. More implications? If approved, it will likely raise the chances that a proposed merger between Sprint (NYSE:S) and T-Mobile (NASDAQ:TMUS), the third and fourth biggest U.S. wireless providers, will succeed in passing regulators.
Echoing similar comments from Deutsche Bank (NYSE:DB), Citigroup's (NYSE:C) investment bank has suggested that it will shed up to half of its 20K technology and operations staff in the next five years, as machines supplant humans at a faster pace. If replicated across the industry, the potential job losses would represent a steeper rate of cuts than in 2007-2017, when almost 60K jobs were cut from eight of the world's top 10 investment banks.
Pushing deeper into energy trading, Exxon Mobil (NYSE:XOM) is reportedly building a global cadre of experienced traders and beefing up risk-management systems to lift profit. Expanded trading - with expectations to add 1M bpd of output over the next several years - could add hundreds of millions of dollars to annual earnings from its own buying and selling of crude, but also comes with higher risk.
Sirius XM has agreed to shell out $150M to settle lawsuits alleging the satellite-radio giant underpaid for use of recorded works. Sirius (NASDAQ:SIRI) will pay SoundExchange, a nonprofit arm of the Recording Industry Association of America, to resolve the claims for recordings from Jan. 1, 2007, to Dec. 31, 2017. The litigation is linked with an earlier suit regarding recordings made before 1972.
Peppered with questions in Senate and House appearances in April, Mark Zuckerberg often replied that he'd have to get back to questioners with more detailed answers. Facebook (NASDAQ:FB) has now turned in its homework, sending more than 450 pages to U.S. lawmakers. Although it's learning from mistakes by transferring more control to users, the documents deflected questions aimed at establishing whether Facebook has market power.
A showdown over ZTE (OTC:ZTCOY) has been set up by Republican Senate leaders, with a vote this week undoing a White House deal to revive the Chinese telecom equipment company. Senators predict the amendment added to the National Defense Authorization Act would clear Congress and be signed into law by President Trump because the underlying defense measure contains many popular items.
An accord Telecom Italia signed with trade unions Monday night will achieve savings equivalent to 4,500 layoffs through so-called "solidarity" measures, sources told Reuters. The steps, which would affect 30,000 Telecom Italia (NYSE:TI) workers for 12 months, usually entail employees cutting their working hours for an equivalent pay reduction.
In a town hall meeting planned for this morning, McDonald's (NYSE:MCD) is expected to detail changes to its organizational structure in the U.S., which will provide more resources to franchisees. The decision will also include layoffs, as well as form a single point of contact to help each franchisee build business plans and create a new executive position called Chief Transformation Officer.
Preparing for the "future in retail," Home Depot (NYSE:HD) plans to spend around $1.2B over the next five years to upgrade its online shopping capabilities. The company will add 170 distribution facilities so that it can reach 90% of the U.S. population in one day or less and plans to build around seven e-commerce fulfillment centers to help speed up deliveries.
In Asia, Japan +0.3%. Hong Kong +0.1%. China +0.9%. India +0.6%.
In Europe, at midday, London -0.3%. Paris -0.2%. Frankfurt flat.
Futures at 6:20, Dow flat. S&P flat. Nasdaq flat. Crude +0.3% to $66.29. Gold -0.1% to $1302.40. Bitcoin -0.5% to $6843.
Ten-year Treasury Yield flat at 2.96%
Today's Economic Calendar
FOMC meeting begins
6:00 NFIB Small Business Optimism Index
8:30 Consumer Price Index
8:55 Redbook Chain Store Sales
1:00 PM Results of $14B, 30-Year Note Auction
2:00 PM Treasury Budget