Market Snapshot
Asia: Japan +0.1% to 20488. Hong Kong -0.4% to 27552. China +0.8% to 4947. India -0.1% to 26813.
Europe: London -1.3%. Paris -1.5%. Frankfurt -1.8%.
Futures: Dow -0.6%. S&P -0.6%. Nasdaq -0.9%. Crude +0.3% to $59.82. Gold -0.2% to $1183.20.
Ten-year Treasury Yield +3 bps to 2.4%
Economic News
8:30 Jobless Claims
8:30 Productivity
8:30 Unit Labor Costs
Key earnings before the open
CIEN, CYBX, JOY, LE, NAV, SJM
Key earnings after the close
CMTL, COO, DMND, ESL, IDT, PAY, RALY, SEAC, THO, UTIW, VNCE, ZOES, ZUMZ
Markets
U.S. stock futures drop, tracking a selloff in European equities, where a renewed bout of bond-market chaos pushed investors out of riskier assets. Much of the rout in bonds right now stems from the fact that we’re starting to see higher inflation rates in the eurozone and therefore naturally bond yields have to rise in tandem with them. The reason we’ve seen so much volatility is because of a lack of liquidity,
Greece’s creditors stuck to a hard line but made some concessions in the outlines of a final deal presented to Athens on Wednesday, although differences between the two sides still remain. According to reports, Athens is now planning to make a new counter-offer.
Chinese stocks had yet another volatile session today, keeping the week’s roller coaster ride on high speed. Plunging as far as 4% at one point in the session, the Shanghai Composite ended the day in the green, up 0.8%. Last Thursday, the index tumbled 6.5%, but rose 4.7% the following Monday.
Dozens of people were reportedly killed or injured around the city of Donetsk on Wednesday in one of the bloodiest battles between Ukrainian forces and Russia-backed militias since a fragile ceasefire began in February. The scale of the violence spooked investors, with the both the Russian stock market and the ruble falling more than 2.%.
Nearly a year after oil markets entered a deep downward spiral, some OPEC members are publicly talking for the first time about a new “fair” price for their crude. Oil ministers from Iraq, Venezuela and Angola said in Vienna this week that a price of $75-$80 a barrel could be just fine, however, Saudi Arabia – which has for years pointed to $100 a barrel as a “fair price for producers and consumers” – has given no indication that it subscribes to this view. Whatever the case may be, there is a reported consensus among the 12-country group to leave the current production ceiling of 30M bpd unchanged at their meeting tomorrow.
Stocks
AIG sold $3.7B in AerCap Holdings stock on Wednesday, building capital to buy back its own shares. The New York-based insurer previously announced a $3.5B share-repurchase plan in April. The larger-than-planned transaction saw AIG selling about 71.2M shares, following expectations for a 50M share public offering. The move reduces AIG’s stake in AerCap (AER) from 46% to 5%.
Apple has canceled plans to unveil a revamped Apple TV set-top at the Worldwide Developer Conference next week, NYT and Re/code both report. Sources say Apple (AAPL) planned as recently as mid-May to reveal the set-top, along with a new remote and developer SDK, but changed its mind. Re/code also recently reported that Apple won’t announce its rumored Web TV service at WWDC since licensing deals haven’t yet been finalized.
Dish Network and T-Mobile are in talks to merge, in what would be the latest multi-billion dollar consolidation move in the media and telecom industry. The two aren’t far apart about the resulting company’s look: Dish’s (DISH) Charlie Ergen would become chairman and T-Mobile’s (TMUS) John Legere the CEO. Talks are still in the formative stage, so the financials have not yet been determined.
European oil majors are openly declaring interest in returning to Iran, with leaders of Royal Dutch Shell (RDS.A, RDS.B), BP (BP) and Total (TOT) all saying they are ready to return as soon as international sanctions are lifted. U.S. oil companies remain somewhat more cautious on Iran, although “certainly we would think about it,” said ConocoPhillips (COP) CEO Ryan Lance.
General Electric has now put virtually all of its U.S. commercial loan businesses on the market, after hiring banks to unload $20B of assets in its healthcare, railcar and franchise finance divisions. The move follows GE’s (GE) bidding process for a separate $40B portion of its U.S. commercial lending assets last week. CEO Jeffrey Immelt has said the divestiture of about $200B of GE Capital’s operations would be done by 2016, as the conglomerate looks to move away from finance and refocus on industrial manufacturing.
After thirteen months in the position, Chris O’Neill, the business chief for Google (GOOG, GOOGL) Glass, is stepping down, although he will still be staying with the company. Separately, Sergey Brin said one of the company’s driverless car has been involved in another rear-end accident, bringing the total number of accidents over the last six years of testing to 12. Defending the prospects for the self-driving technology, Brin said he’s “very proud of the record of the cars” and his goal is to “beat human drivers.”
Molycorp (MCP) plans to file for Chapter 11 bankruptcy protection as soon as this month, after skipping a $32M bond interest payment this past Tuesday. The plan marks a dramatic turn for Molycorp, which rode temporary concerns of a shortage in rare earths elements to a $6B market capitalization in 2011. Since then, China has relaxed restrictions on exports of rare earths, oversupplying the market.