- Asian Stocks Rise as Treasuries Rally Into US PCE: Markets Wrap
(Bloomberg) — Equities in Asia followed gains in US stocks and Treasuries ahead of the Federal Reserve’s preferred inflation gauge due Friday. Shares in Japan’s benchmark Topix index were set for a 34-year high. South Korean stocks climbed, while futures for Hong Kong were slightly lower. - Biden, Trump Spar Over Economy in Their First Debate of 2024
(Bloomberg) — President Joe Biden and Republican Donald Trump opened their first presidential debate sparring over the economy, with each candidate blaming the other for the rising cost of groceries and housing. Voters have rated the economy as one of the defining issues of the campaign. - Tokyo Inflation Quickens, Output Gains Keeping BOJ on Hike Path
(Bloomberg) — Inflation in Tokyo picked up in June on the back of higher energy prices and industrial output rose more than expected in May, likely keeping the Bank of Japan on track to consider an interest rate hike as early as July. - Hong Kong Stumbles in Its Own Key Test as a Global Financial Hub
(Bloomberg) — Four years after Hong Kong began a sweeping crackdown against political dissent, the city is struggling to meet one of its own benchmarks in reassuring foreign investors that it remains a predictable place to do business. - India Set for Greater Global Attention as Bond Inclusion Begins
(Bloomberg) — India is set to lure billions of dollars more inflows when JPMorgan Chase & Co. adds the nation’s government bonds to its emerging markets index on Friday, opening up a $1.3 trillion market to a broader range of investors. Global funds have already poured close to $11 billion into index-eligible bonds since JPMorgan’s announcement in September. - BOJ Gets Mojo Back as Wage Win Unfreezes Prices: Economics
(Bloomberg Economics) — The Bank of Japan, after raising rates in March for the first time in 17 years, is now squarely on the path toward normalizing policy. The catalyst? Big pay raises won in this year’s spring labour negotiations, or Shunto. Convinced that Japan is finally snapping out of a decade-long deflationary malaise, the BOJ now wants to lift its key rate as far above zero. - US Economy Shows Further Signs of Slowing Under High Rates
(Bloomberg) — Wide-ranging economic data illustrates a downshift in US growth over the first half of the year tied to both the Federal Reserve’s higher-for-longer borrowing costs policy and sting of lingering inflation. The government marked down personal spending the main engine of the economy by half a percentage point to an annualized 1.5% in the first quarter. - Starmer Builds a Big UK Election Victory on a Volatile Coalition
(Bloomberg) — Britain stands on the cusp of what should be a once-in-a-generation political realignment on July 4, with polls showing Keir Starmer’s Labour Party heading for a landslide win and Rishi Sunak’s Conservatives facing a wipeout after 14 turbulent years in power. - Banxico Governor Rodriguez Signals Openness to More Rate Cuts
(Bloomberg) — A decrease in the peso’s volatility is one of the elements that has opened the door for the central bank to consider interest rate cuts in future decisions, said Banco de Mexico’s Governor Victoria Rodriguez. - Supreme Court Curbs SEC’s In-House Judges in Fraud Cases
(Bloomberg) — The US Supreme Court curbed the Securities and Exchange Commission’s ability to press complaints before in-house judges, saying defendants have a constitutional right to make their case to a federal jury when the agency is seeking financial penalties. The 6-3 decision could reduce the commission’s leverage to extract high-dollar settlements. - Big Banks to Pay $46 Million to Settle Swaps Collusion Case
(Bloomberg) — Ten major US and European banks, including Goldman Sachs Group Inc., JPMorgan Chase & Co. and BNP Paribas SA, plan to pay a combined $46 million to end a lengthy legal battle with pension plans that accused them of conspiring to block competitors in interest-rate swaps trading. - Hedge Fund Elliott in Talks to Move NYC Offices to Park Avenue
(Bloomberg) — Paul Singer’s Elliott Investment Management is nearing a deal to relocate its New York City offices to a spot-on Park Avenue. Elliott is in talks for roughly 150,000 square feet (13,935 square meters) of offices at 280 Park Ave., a spot that would make the firm closer to Grand Central Terminal, according to people familiar with the matter. - Citadel Buys Goldman Alum’s Company to Trade Power in Japan
(Bloomberg) — Ken Griffin’s Citadel is buying Energy Grid Corp., a company that trades and sells power products, as the hedge fund firm expands its commodities business in Japan. The acquisition of Tokyo-based Energy Grid is expected to close in the third quarter, the company said in a statement Friday. - Nokia to Buy Networking Company Infinera in $2.3 Billion Deal
(Bloomberg) — Nokia Oyj has agreed to acquire Infinera Corp. in a transaction valuing the maker of optical telecommunications equipment at $2.3 billion including debt. The cash-and-stock deal will value Infinera at $6.65 a share, a 37% premium to the trailing 180-day average of the San Jose, California-based company’s share price. - US IPOs See Best Start Since ’21 as Election Shortens Window
(Bloomberg) — For the first time in three years, Wall Street’s equity capital markets bankers appear to have the wind at their backs. Initial public offerings have gotten off to their best start to a year since the heady days of 2021, with more than $20 billion raised in the first six months, according to data compiled by Bloomberg. - Elon Musk Dismisses Rumors Of SpaceX IPO As It Reportedly Seeks $210B Valuation: ‘Pressure For Short-Term Results For A Public
(Benzinga Newswire) Billionaire entrepreneur Elon Musk on Thursday dismissed hopes for a SpaceX initial public offering (IPO), citing intense pressure for short-term results at publicly listed companies. - Macron and Scholz’s Move to Hijack Summit Enrages EU Leaders
(Bloomberg) — France and Germany are used to getting their way on the EU stage. But when the bloc’s two biggest economies turned up at Thursday’s crucial European Union summit distracted by their own domestic troubles, they found it harder to throw their weight around. Other member states reacted furiously when President Emmanuel Macron and Chancellor Olaf Scholz. - Gold gains 1% on dollar weakness as focus turns to U.S. PCE data
Gold prices rose more than 1% on Thursday from the over two-week low touched in the previous session, as the dollar softened and the spotlight shifted to key U.S. inflation data for clues on the Federal Reserve’s policy path. Spot gold was up 1.2%, at 2,324.53 per ounce, after falling to its lowest level since June 10 on Wednesday. - OpenAI, Microsoft sued by Centre for Investigative Reporting as news industry bolsters attack on AI
The Centre for Investigative Reporting sued OpenAI and Microsoft in federal court on Thursday for alleged copyright infringement. The CIR alleged that OpenAI “copied, used, abridged, and displayed CIR’s valuable content without CIR’s permission or authorization, and without any compensation to CIR.” Earlier in the day, OpenAI and Time magazine announced a “multi-year content deal” that will allow OpenAI to access current and archived articles from more than 100 years of Time’s history. - Amid an apparent market rotation out of the semiconductor sector, software stocks rallied on Thursday with Palantir, Datadog, Salesforce and Snowflake among the gainers.
“Seems like a rotation trade,” said TD Cowen analyst Derrick Wood. “There’s been a lot of money rotation out of software and into semis over the last few months and just feels like the pendulum has swung too far. Yesterday/today we’ve seen a little bit of a snapback with what seems to be some rotation back into software on oversold conditions. “The iShares Expanded Tech-Software Sector ETF, an industry index, looks likely to turn in a strong June month performance after rising the past six trading sessions. - Walgreens Boots Alliance shares plunged 22.2% after it slashed its guidance due to a worsening retail environment and announced it would close significantly more stores.
In addition to shuttering locations, management said it would make more organizational changes without specifying further job cuts. “The positive sentiment around Tim Wentworth’s hiring as CEO has dissipated,” Bloomberg Intelligence analyst Jonathan Palmer said. “It’s increasingly apparent that there won’t be an easy solution to the turnaround as profitability in the core US pharmacy continues to trend downwards.” Walgreens cut its forecast range for full-year adjusted earnings to $2.80 to $2.95 per share, after lowering the top end of its guidance the prior quarter. Adjusted earnings for the three months ending May 31 were 63 cents a share, worse than the 68 cents that analysts anticipated. - Blackberry shares surged 10.86% after it reported its upbeat first quarter earnings.
First quarter revenue was reported at $144 million, beating estimates of $135.1 million, despite coming in lower -61% YoY. Adjusted basic loss per share came in at 3 cents, while estimates were at 4 cents. Blackberry said that its cybersecurity division performed better than expected, citing the popularity of its Secusmart voice-encryption technology among big government clients. - Micron shares dropped 7.12% after it reported its third quarter earnings and fourth quarter forecast.
For the third quarter, adjusted revenue came in at $6.81 billion, +82% YoY, beating estimates of $6.67 billion. Adjusted earnings per share was at 62 cents, beating estimates of 50 cents. For the fourth quarter, Micron forecasted an adjusted revenue between $7.4 billion and $7.8 billion, while estimates are at $7.58 billion. Adjusted earnings per share was forecasted to be between $1 and $1.16, while estimates are at $1.02. - Japanese yen weakens to fresh 38-year lows; top currency diplomat replaced
The yen has crossed the 161 marks against the dollar for the first time since 1986. Japan reportedly appointed Atsushi Mimura as its top currency diplomat, replacing Masato Kanda, according to Nikkei. Mimura is the director general of the Japanese finance ministry’s international bureau. Dong Chen, chief Asia strategist and head of Asia research at Swiss private bank Pictet, still expects the yen to stay “fairly weak” despite warnings of intervention from Japanese officials. - France’s far right looks headed for victory in the first round at the polls.
French opinion polls suggest victory for the far right in the first phase of the two-stage parliamentary elections. The shift away from centrist politics has spooked investors and analysts, who have warned of implications ranging from “political paralysis” to “immediate financial crisis.” - Iran votes for its new president amid economic strife, crackdowns and regional war
Iran is voting in a snap election following the unexpected death of former President Ibrahim Raisi in a helicopter crash — and the result could have implications far beyond its borders. All but one of the candidates approved to run are conservative, anti-Western hardliners. If there is no clear majority after Friday’s vote, the top two candidates face a second round of voting on July 5. - S&P 500 futures climb as investors await inflation data and end of second quarter
S&P 500 futures climbed Friday morning as traders await closely followed inflation data. They are also counting down to the end of what has been a strong first half of the year. Futures tied to the broad market index ticked up 0.2%, while Nasdaq 100 futures added 0.32%. Dow Jones Industrial Average future slipped 13 points, or 0.03%. - There’s a big Fed inflation reading coming Friday.
The personal consumption expenditures price index, an inflation measures the Federal Reserve watches closely, is expected to show little, if any, monthly increase for May. When stripping out volatile food and energy prices, the core PCE price index is set to indicate its lowest annual reading since March 2021. The Commerce Department releases the inflation readings, along with reports on personal income and spending, Friday at 8:30 a.m. ET. - Nike Inc. shares sank 12.4% in afterhours trading after the world’s largest sportswear company issued a full-year outlook that missed expectations, reinforcing investor concerns about waning demand for its sneakers and apparel.
The owner of the Jordan and Converse brands sees revenue declining in the mid-single digits in the company’s current fiscal year, which began this month. Analysts had expected growth of about 2%.
Nike sales have suffered in recent quarters as an attempt to pivot away from wholesalers has sputtered. Sales on its website, app and stores declined 8% in the company’s fiscal fourth quarter, missing expectations. Nike executives blamed the slowdown in part on lifestyle brands, including Air Force 1 and Nike Dunks, which get a high proportion of their sales online. The lifestyle category’s sales fell for the first time since the start of the pandemic, when demand for casual attire took off.
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