Asia: Japan +0.6% to 20236. Hong Kong +1.1% to 26250. China +5.6% to 4278. India +0.5% to 27781.
Europe: London -0.4%. Paris +0.1%. Frankfurt +0.1%.
Futures: Dow +0.6%. S&P +0.7%. Nasdaq +0.6%. Crude +0.6% to $58.69. Gold -0.6% to $1171.70.
Ten-year Treasury Yield +2 bps to 2.35%
8:55 Chain Store Sales
9:00 S&P Case-Shiller Home Price Index
9:45 Chicago PMI
10:00 Consumer Confidence
Key earnings before the open
CAG, OMN, SCHN
Key earnings after the close
U.S. stock futures are up this morning, putting the Dow Jones Industrial Average on track to rebound from its lowest level in nearly five months. “This is a little bit of a snapback from the selloff that we saw yesterday,” said Jeremy Zirin , head of investment strategy at UBS Wealth Management Americas.
Stocks tumbled Monday to wipe out gains for the year as the threat of a Greek exit from the eurozone jolted markets. Markets across Asia bounced back overnight, while European indexes remain mixed. On Monday, about $1.5T was erased from the value of global equities.
Greece is just hours away from defaulting on a loan from the IMF, setting the stage for a tense showdown with international creditors ahead of a national referendum that will likely decide its eurozone membership. Reports earlier suggested European Commission President Jean-Claude Juncker made Athens a last minute offer, but Greek Prime Minister Alexis Tsipras doesn’t appear to be picking up the phone.
Inflation in the eurozone eased in June, highlighting that the region remains vulnerable to deflation pressures. The eurozone consumer price index rose 0.2% in June from a year earlier, after rising 0.3% in May, while the core annual rate dropped to 0.8% from 0.9%. A pick-up in inflation last month had boosted hopes that price pressures were returning to the region after it tumbled into deflation earlier this year.
China is now taking an all-hands-on-deck approach to soothe the country’s plunging stock market, after an unexpected weekend interest rate cut failed to right the ship. Late on Monday the finance and social security ministries published draft rules that would permit the state pension fund to invest up to 30% of its net asset value in securities, potentially allowing 600B yuan ($97B) to enter the market. The Shanghai Composite Index closed up 5.6%.
The Export-Import Bank will expire today at midnight for the first time since the federal agency was created during the Depression. The bank, which guarantees commercial loans for overseas customers of American exporters, will not exactly go out of business. Employees will continue to service all outstanding loans, but new loans won’t be guaranteed. Supporters of the bank, however, are hoping to attach legislative language restarting the bank to a must-pass transportation funding bill in late July, then dare opponents in the House to kill it.
President Obama has unveiled a long-awaited proposal that would make nearly 5M more workers eligible for overtime pay, a move that touches nearly every sector of the U.S. economy and could face legal challenges. The change would allow salaried workers who earn up to $50,400 per year to qualify for time-and-a-half pay when working more than 40 hours per week as soon as 2016. Under current rules, only those earning less than $23,660 are automatically eligible for the overtime wages.
Puerto Rico will seek to delay payments on the island’s $72B debt load for “a number of years” as part of a plan to bolster the commonwealth’s finances and revive its economy, Governor Alejandro Garcia Padilla said in a 21-minute televised speech Monday night. Padilla then appealed to Washington to make unprecedented, “concrete” changes in bankruptcy rules to help rescue the island’s finances. Although U.S. cities and municipalities are eligible to file for bankruptcy, states and Puerto Rico are barred from seeking protection.
Amazon is expanding its business loan program from the U.S. and Japan to merchants selling on its site in China, India, Canada, and the 5 biggest EU markets; Germany, France, Italy, Spain, and the U.K. Amazon Lending provides three- to six-month loans of $1,000 to $600,000 to help merchants buy inventory. It makes money on interest and takes a cut of all sales on its marketplace, which now account for about 40% of total Amazon (AMZN) site sales.
With approval of a deal seeming to drag, AT&T (T) has extended the “termination date” of its merger agreement with DirecTV (DTV) for “a short period of time” and expects the merger to “be consummated shortly.” It’s the second extension in two months; the two extended their end date on May 15 as well.
Japan’s Sumitomo Mitsui Banking Corp. is nearing a deal to buy General Electric’s (GE) European private-equity finance division, as the industrial conglomerate continues its retreat from the banking industry. Sumitomo Mitsui (SMFG) is expected to pay more than $2B for the business, known as a sponsors unit, which finances buyouts and other transactions for private-equity firms in Europe. A deal could be announced as soon as today.
Stating there was no proof GM’s (GM) directors acted in bad faith, a Delaware judge has dismissed a lawsuit brought by General Motors shareholders who wished to recoup losses stemming from the company’s ignition switch recall of millions of vehicles. The news comes a month after a U.S. bankruptcy judge put on hold dozens of lawsuits accusing the company of concealing the ignition-switch defect while plaintiffs in those cases appeal an earlier ruling that found their cases barred.
Juno Therapeutics jumped 53% in after-hours trading in response to a 10-year collaboration and $1B investment from Celgene (CELG) to develop and commercialize novel immunotherapies for the treatment of cancer and autoimmune diseases. The move will make Celgene one of the most high-profile backers of Juno’s (JUNO) “Car-T therapy”, which involves extracting a cancer patient’s white blood cells, re-engineering them, and then reintroducing them into the body.
Microsoft is closing its web display advertising business, handing operations over to AOL (VZ) and AppNexus while cutting about 1,200 jobs, Bloomberg reports. Some of the affected employees will be moved to AOL and AppNexus, while some more will be offered positions at Microsoft (MSFT).
NBC is ending its business relationship with presidential candidate Donald Trump over “recent derogatory statements” about immigrants, it said in a statement. The move means that the annual Miss USA and Miss Universe pageants won’t air on the network and Trump won’t participate in The Apprentice reality competition show. Trump has responded to NBC (CMCSA) saying the “contract-violating closure of Miss Universe/Miss USA will be determined in court.”
Sony plans to raise up to ¥440B ($3.6B) by issuing new shares and convertible bonds to help finance an increase in production of image sensors used in smartphones. Shares plunged 8.3% in Tokyo on news of the fundraising plan. Sony’s (SNE) image sensors business is becoming its strongest and fastest growing unit as sales at its TV and mobile operations struggle.
Reinsurance group Willis and professional services company Towers Watson (TW) have announced plans to merge in an all-stock deal valued at $18B. The merger will see Willis (WSH) own 50.1% of the combined group, with Towers Watson shareholders owning the rest. Towers Watson CEO John Haley will be chief executive of the new company, which will maintain its domicile in Ireland.
Bringing months of negotiations to an end, European lawmakers have agreed to a final proposal to scrap roaming charges within the 28-member union as of June 2017 and introduce rules on “net neutrality.” Unlike stricter laws in the U.S., the EU will allow specialized services for things such as streaming live TV as long as it does not hinder other customers – a move likely to be welcomed by telecoms groups.