Before the market opens on Tuesday, here is what you need to know.
Time is running out on Greece. An EU source has suggested Greece’s prime minister, Alexis Tsipras, told euro zone leaders he expects a deal will be done “within 48 hours.” IMF head Christine Lagarde didn’t sound as optimistic, saying, there is still an “enormous” amount of work that needs to be done. The debt-ridden country must make a 1.5 billion euro ($US1.7 billion)payment to the IMF on June 30. Greece’s 2-year yield is at a one-month low, down 235 basis points at 20.95%.
The ECB has upped its emergency funding for Greek banks. The European Central Bank raised its Emergency Liquidity Assistance (ELA) to Greece for the fourth time in a week, but the amount of money provided is unknown. The assistance comes as Greeks continue to pull their money from the banking system as fears of capital controls mount. Greece needs to reach a deal with its creditors in order to free up 7.2 billion euros ($US8.2 billion) to make its upcoming debt payments.
Euro zone PMI hit a 4-year high. Manufacturing and services readings from across the euro zone outpaced estimates. Notable was the particularly strong data from France, which saw the manufacturing sector return to expansion for the first time since April 2014. The euro is down 1.1% at 1.1217.
China’s HSBC Manufacturing PMI improved. The survey of Chinese manufacturing showed improvement, but the sector remained in contraction. The June reading ticked up to 49.6 from 49.2 in May, outpacing the 49.4 that was anticipated. New orders, purchase quantities, stock purchases and order backlogs all showed improvement. China’s yuan strengthened fractionally to 6.2067 per dollar.
BlackBerry missed on the top and bottom lines. The wireless communications provider announced an adjusted loss of $US0.05 per share, which was shy of the $US0.04 loss analysts were anticipating. Revenue tumbled 31.9% year-over-year to $US658 million, missing the $US679.6 million that was expected. The company expects to see positive cash flow this year.
Darden Restaurants topped estimates. The restaurant operator announced adjusted earnings of $US1.08 per share, easily beating the $US0.93 that Wall Street was expecting. Revenue rose 13.8% to $US1.88 billion, slightly outpacing the $US1.87 billion that analysts were anticipating. The closely followed same store sales metric rose 3.8% versus expectations of an increase of just shy of 3%. Darden announced it will separate its REIT into a publicly traded company.
Alibaba is investing a ton of money in China’s services sector. The online marketplace and its affiliate, Ant Financial, announced they will invest nearly $US1 billion in local services. The venture will focus on food delivery to start, and expand to other areas of the service sector. According to the release, users will gain access to the services through Alibaba’s Mobile Taobao app and Ant Financial’s Alipay Wallet app.
Wal-Mart has pulled Confederate flags off its shelves. The world’s largest retailer made the decision to stop selling Confederate flags after last week’s shooting at a Charleston, South Carolina church. “We never want to offend anyone with the products that we offer. We have taken steps to remove all items promoting the confederate flag from our assortment — whether in our stores or on our web site,” Wal-Mart spokesman Brian Nick told CNN in a statement.
Stock markets around the world are higher. France’s CAC (+1.3%) leads European markets higher after China’s Shanghai Composite (+2.2%) erased an early decline of more than 4% to pace the gains in Asia. S&P 500 futures are up 3.25 points at 2116.00.
US economic data picks up. Durable orders will be released at 8:30 a.m. ET and will be followed by FHFA Housing Price Index at 9 a.m. ET and new home sales at 10 a.m. ET. Treasury will auction $US26 billion 2-year notes at 1 p.m. ET. The US 10-year yield is unchanged at 2.37%.