Asia: Japan +0.3% to 20585. Hong Kong +0.6% to 24636. China -1.1% to 3664. India +1.5% to 28115.
Europe: London -0.2%. Paris +0.3%. Frankfurt +0.1%.
Futures: Dow -0.1%. S&P -0.1%. Nasdaq -0.1%. Crude -2% to $47.57. Gold -0.7% to $1080.70.
Ten-year Treasury Yield flat at 2.27%
8:30 Employment Cost Index
9:45 Chicago PMI
10:00 Reuters/UofM Consumer Sentiment
Key earnings before the open
AEE, AON, AXL, BERY, BPL, CBOE, CVX, DSX, ENB, GIL, HMC, HPY, IMGN, IMS, ITT, KCG, LM, LPNT, MGI, MOD, MOG.A, MT, NJR, NWL, PEG, PNM, PSX, PSXP, RCL, RLGY, RUTH, STX, SWC, TDS, TNP, TRP, TYC, USM, VRTS, WETF, WMC, WY, XOM
U.S. stock futures turned higher before the opening bell Friday after data showed a measure of labor costs decelerated sharply in the second quarter, suggesting the Federal Reserve could be patient with raising interest rates this year. The Employment Cost Index, which measures the wages and benefits that companies, governments and nonprofit institutions pay their employees, rose a record-low 0.2% in the second quarter. That was well below the 0.7% gain in the first quarter and came as a surprise to economists, who had expected a 0.6% gain.
More troubles are popping up for Greek PM Alexis Tsipras after the IMF dropped a bombshell stating Athens’ high debt levels and current record of implementing reforms disqualify it from a third bailout. The news raises questions over whether the institution will join the EU’s latest financial rescue, and if it will be even possible without the fund’s backing. IMF staff will still participate in the bailout negotiations under way, but will not decide whether to agree to a new program for months – potentially into next year.
In other debt talks: The long drawn-out negotiations between Ukraine and its major creditors started to thaw, after the latter agreed to take a small reduction in the face value of their holdings to speed up a debt restructuring process. The two sides have stood at an impasse for months over about $19B worth of bonds, which have tanked in value because of concerns Kiev wouldn’t be able to make its repayments.
Investors are bracing for Puerto Rico to miss $58M in bond payments in the coming days, as the U.S. commonwealth attempts to restructure $72B of debt. Saturday’s deadline could mark the first skipped payment to bondholders since Governor Alejandro Garcia Padilla deemed the island’s debts unsustainable and urged negotiations with creditors. Because Saturday is a weekend, payment can be made Monday.
With forecast-beating earnings underpinning market sentiment, European stocks advanced slightly after a three-day gain, heading for their biggest monthly jump since February.
Inflation in the eurozone held steady in July, highlighting a continuing challenge for the ECB as it looks to stoke price growth in the 19-nation bloc. According to Eurostat’s flash estimate, the annual inflation rate stayed at 0.2%, as falling energy prices offset rises in industrial goods. The unemployment rate also remained unchanged at 11.1%, holding pace for the third straight month.
Chinese shares suffered their worst month in nearly six years this July after confidence in a government-led recovery wavered. The Shanghai Composite lost 9% this week, and is down 14% month to date – its worst monthly performance since August 2009. The latest market crackdown: China’s securities regulator said it launched a probe into automated trading, restricting 24 stock accounts suspected of “influencing securities trading prices.”
Pacific Rim officials are nearing the final spurt of Trans-Pacific Partnership negotiations, but differences over dairy exports and exclusivity periods for drugs still need to be resolved before a final deal is reached. About 650 officials from 12 nations are taking part in the discussions on the Hawaiian island of Maui. A news conference is scheduled for 7:30 p.m. ET after the last talks are concluded.
General Electric is (GE) taking steps to shift some U.S. manufacturing work overseas now that the U.S. Export-Import Bank will be shuttered at least until September, Vice Chairman John Rice told Reuters. GE is looking to work with export credit agencies in other countries to finance potentially $10B worth of projects, with much of the production going to GE plants in those foreign locations.
Three bottlers of Coca-Cola products in Europe are in advanced talks about a merger that would further Coke’s (KO) push to consolidate its bottlers around the world and cut costs. Coca-Cola Enterprises (CCE) is discussing the tie-up with Coca-Cola Iberian Partners and Germany’s Coca-Cola Erfrischungsgetränke. Terms of the potential deal are not known, but it is likely to be valued well into the billions of dollars.
Rivaling Google’s Project Loon, Facebook (FB) has completed building its first full-scale drone called the Aquila, which has the wingspan of a Boeing 737 and will beam Internet down to remote parts of the world. The plane will hover between 60,000 feet and 90,000 feet, above the altitude of commercial airplanes, and will be able to fly for 90 days at a time.
Going to battle with domestic rival Ola, Uber (UBER) is set to plow $1B into a major expansion in India, placing its investment in the country on par with China. “We are continuing to see robust 40% [monthly] growth…and with more investment…we expect to grow at an even faster rate,” said Amit Jain, President of Uber India. The U.S. ride-hailing service expects the spending drive to translate into 1M daily rides in India by March 2016.
Apple plans to unveil the next-generation Apple TV set-top in September “at the same event at which it typically unveils its new iPhones,” reports BuzzFeed’s John Paczkowski. The new unit will have a slimmer chassis, a “drastically improved” remote with touch-pad input, and an operating system that will support Siri. Apple’s (AAPL) much-rumored Web TV service isn’t expected to be announced at the same time.
Google is quietly distributing a new version of Google Glass to various enterprise partners ahead of a full launch later this year. The device’s price appears to be “well below” the $1,500 charged for the Explorer Edition, and contains a button-and-hinge system to attach the mini-computer to different glasses. The WSJ adds that Google (GOOG, GOOGL) is pitching the product “exclusively to businesses,” and that a new consumer version is still “at least a year away.”
A federal judge in Alaska has ordered Greenpeace to pay a fine of $2,500 for every hour that protesters continue to block a Royal Dutch Shell (RDS.A, RDS.B) icebreaker from leaving Portland, Oregon, for the Arctic. Activists continue to hang off the St. Johns Bridge over the Willamette River to stop the vessel from passing.
White-hat hacker Samy Kamkar has released a video showing a security flaw in GM’s (GM) OnStar vehicle communications system that can be remotely accessed to unlock cars and start engines. The move comes just one week after Fiat Chrysler (FCAU) recalled some 1.4M vehicles after hacking experts demonstrated a more serious vulnerability in the Jeep Cherokee. That bug allowed them to gain remote control of a Jeep traveling at 70 mph on a public highway.