Evening Headlines
Bloomberg:
Bloomberg:
- Merkel Says No Way Back From Brexit as Cameron Regrets Defeat. (video) European Union leaders said there could be no turning back for the U.K. after Prime Minister David Cameron used his last EU summit to express disappointment at his failure to win the referendum he called on Britain’s membership. “As of this evening, I see no way back from the Brexit vote,” German Chancellor Angela Merkel told reporters after the meeting in Brussels on Tuesday. “This is no time for wishful thinking, but rather to grasp reality.” Fellow government chiefs lined up to warn Cameron that delaying the period before the U.K formally activates the EU’s exit mechanism will prevent the start of negotiations over any future relationship. The prime minister repeated the message he’d given back home: despite the uncertainty it’s causing, that will be the job for his successor.
- El-Erian: Anti-Establishment Movement to Get Louder. (video)
- Trouble in Renewable Energy Spotted in China’s Idled Wind Farms. Trouble may be brewing in China’s renewable energy industry if idled wind farms are anything to go by. The nation’s clean-energy investment binge has made it the world leader in wind, accounting for about one in every three turbines currently installed, according to the Global Wind Energy Council. In turn, Xinjiang Goldwind Science & Technology Co., which makes the machines, has pushed past its western rivals such as Vestas Wind Systems A/S and General Electric Co.
- Japan’s Retail Sales in May Unchanged, Showing Weak Recovery. Japan’s retail sales were unchanged in May, underscoring the challenge Prime Minister Shinzo Abe faces in boosting consumer spending and reviving the economy. Sales were flat in May from the previous month, when they dropped, the trade ministry reported Wednesday. The median forecast of economists surveyed by Bloomberg was for no gain. Favorable factors included sales of machinery and equipment, while sectors including food and beverages were negative. From a year earlier, sales fell 1.9 percent, compared with a forecast decline of 1.6 percent in the survey. The biggest contributor to the drop was fuels, reflecting declines in oil prices. Even as oil prices have risen recently the level is still lower compared with last year.
- Brexit Risks Pile Up for Hitachi Construction, CEO Says. The risks are piling up for Japan’s construction equipment makers in the aftermath of Brexit. Already contending with China’s slowdown and a rout in commodities prices, Hitachi Construction Machinery Co. now faces two new threats after the U.K.’s vote to quit the European Union: the yen’s rapid appreciation and fears that Brexit could hit demand in Europe, according to its chief executive officer. “The yen has been strengthening sharply and that’s the biggest impact on our business,” Yuichi Tsujimoto said in an interview Tuesday. “Immediate risks are the currency movement and the European economy.”
- Japan Executives Saw Yen Gaining Most in 2016 Even Before Brexit. Japanese executives were expecting the yen to outperform its peers this year even before the U.K.’s decision to quit the European Union set off global market turmoil that drove the currency to its highest since 2013. Some 57 percent of more than 100 traders, strategists and corporate treasurers polled at a Bloomberg seminar in Tokyo on June 14 expected the Japanese currency to stand out as the strongest performer against the greenback this year, with 15 percent choosing the Swiss franc and 12 percent picking the Australian dollar. While 76 percent of respondents expected further Bank of Japan easing in 2016, the potential for the U.S. to raise interest rates was cited as the biggest issue likely to affect the yen.
- Asian Stocks Advance Amid Global Rebound on Stimulus Speculation. Asian stocks rose, following a rally in global equities, amid optimism that policy makers will introduce measures to limit the economic fallout from U.K. leaving the European Union. The MSCI Asia Pacific Index advanced 1 percent to 126.64 as of 9:03 a.m. in Tokyo. A gauge of global equities climbed by most in a week as investors watched for signs that central banks and governments will help ease the post-Brexit market turmoil. Federal Reserve Governor Jerome Powell said global risks have shifted further to the downside after Britain’s vote to exit the EU, introducing new uncertainties that may merit reassessing monetary policy.
- Fed’s Powell Says Brexit Shifts Global Risks Further to Downside. Federal Reserve Governor Jerome Powell said global risks have shifted further to the downside after Britain’s vote to exit the European Union, introducing new uncertainties that may merit reassessing monetary policy. “The Brexit vote has the potential to create new headwinds for economies around the world, including our own,” Powell said Tuesday in remarks prepared for delivery to the Chicago Council on Global Affairs. “As the global outlook evolves, it will be important to assess the implications for the U.S. economy, and for the stance of policy appropriate to foster continued progress toward our objectives of maximum employment and price stability.”
- Oil Is Still Heading to $10 a Barrel.
- Hedge Funds Brace for Redemptions in Wake of Brexit. (video)
- Donald Trump Lays Out Protectionist Views in Trade Speech. Candidate rejects longstanding GOP orthodoxy by saying he would scrap NAFTA, U.S. involvement in TPP.
- At least 36 dead, 147 injured in suspected ISIS attack at Istanbul airport. (video) At least 36 people were killed and 147 more were injured when three suspected ISIS suicide bombers attacked Istanbul's main international airport Tuesday night, Turkish officials said. Prime Minister Binali Yildirim confirmed the death toll from the blasts at Istanbul Ataturk Airport. Earlier, Justice Minister Bekir Bozdag confirmed that 147 people had been wounded in the attacks. The Associated Press initially quoted a senior Turkish official as saying that close to 50 people had already died. However, the news agency later said that the official told them the figure was expected to rise to close to 50. A Turkish official told Reuters that the "vast majority" of victims were Turkish, but some foreigners were also affected.
Zero Hedge:
Earnings of Note
Company/Estimate
8:30 am EST
- The Accusations Begin: David Cameron Blames Brexit On Merkel And EU "Immigration Failure".
- Nigel Farage Batters Obama: "He Came To Britain And Behaved Disgracefully".
- Nike(NKE) Tumbles To August 2015 Levels After Missing On Revenue, Future Orders, Margin Decline.
- Bernie Sanders: The World Is Rejecting Globalization.
- Chart Of The Day: When Central Planning Fails. (graph)
- CCTV Camera Captures Moment Of Istanbul Airport Explosion As Suicide Attacker Blows Himself Up. (video)
- Kuroda Is Trapped As The BOJ Can't Ease Any Further: Here's Why. (graph)
- Why All The Post-Brexit Hysteria?
- Brexit Hedge Unwind Sparks Volumeless Dead Cat Brounce. (graph)
- Hong Kong's downturn will be a harbinger of things to come.
- America's shrinking middle class is killing the economy.
- People who witnessed the Istanbul suicide bombings share terrifying details from the attack.
- Photos show the aftermath of the Istanbul airport bombing.
- Any 'veneer of confidence' in the markets is gone.
- Asian equity indices are +.5% to +1.0% on average.
- Asia Ex-Japan Investment Grade CDS Index 145.75 -4.5 basis points.
- Asia Pacific Sovereign CDS Index 53.50 -2.5 basis points.
- Bloomberg Emerging Markets Currency Index 71.77 +.02%.
- S&P 500 futures +.10%.
- NASDAQ 100 futures +.11%.
Earnings of Note
Company/Estimate
- (AYI)/2.03
- (GIS)/.60
- (MON)/2.40
- (WOR)/.62
- (APOL)/.27
- (MRVL)/.09
- (PIR)/-.05
- (PRGS)/.29
8:30 am EST
- Personal Income for May is estimated to rise +.3% versus a +.4% gain in April.
- Personal Spending for May is estimated to rise +.4% versus a +1.0% gain in April.
- The PCE Core MoM for May is estimated to rise +.2% versus a +.2% gain in April.
- Pending Home Sales MoM for May are estimated to fall -1.1% versus a +5.1% gain in April.
- Bloomberg consensus estimates call for a
weekly crude oil inventory decline of -2,344,440 barrels versus a
-917,000 barrel decline the prior week. Gasoline supplies are estimated
to fall by -444,440 barrels versus a +627,000 barrel gain the
prior week. Distillate inventories are estimated to rise by +238,890
barrels versus a +151,000 barrel gain the prior week. Finally, Refinery
Utilization is estimated to rise by +.65% versus a +1.1% gain prior.
- None of note
- The Fed Stress Test results, Japan Industrial Production report, weekly MBA Mortgae Applications report, (MCK) investor day, (NX) analyst day and the (SSP) investor day could also impact trading today.
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