Here is what you need to know.
Deutsche Bank has a new CEO. Former UBS CFO John Cryan is taking the reins at Deutsche Bank. Cryan takes over following the resignation of co-CEOs Anshu Jain and Jurgen Fitschen. Jain will be leaving the firm this month while Fitschen will be stepping aside next May. The stock was up as much as 8% on the news in German trade.
Turkey’s president lost his parliamentary majority. Recep Tayyip Erdogan’s AKP lost its majority in the weekend election as a minority party representing Kurds made big gains. The setback means Erdogan will likely need to form a coalition government by partnering up with the far-right. A new election will take place if a government is not formed within six weeks. The results pushed Turkey’s lira down more than 5% to a record low of 2.8096 per dollar.
China’s trade surplus grew. China announced a surplus of $US59.5 billion, up from $US34.1 billion in April. The larger than expected surplus came as exports slipped 2.5% and imports tumbled 17.6%. According to the FT, “Export-focused manufacturers , who thrived during the past decade as China became the factory of the world, are under pressure because of the strength of the renminbi relative to most other major currencies apart from the US dollar.” China’s renminbi slipped 0.1% to 6.2060 per dollar.
Japan’s GDP saw a a huge upward revision. First quarter Final GDP was revised up to an annual rate of 3.9% from its preliminary reading of 2.4%. CNBC reports, “The upward revision mostly reflects better-than-expected capital spending, which rose 2.7 per cent on quarter, far higher than the 0.4 per cent preliminary estimate.” Japan’s yen is stronger by 0.3% at 125.31.
The US denies President Obama was complaining about the strong US dollar at the G7 meetings. A French official was quoted as saying President Obama made references to a strong US dollar hurting the economy. However, a US official denied the report, suggesting, “He made a point that he has made previously, a number of times: that global demand is too weak and that G7 countries need to use all policy instruments, including fiscal policy as well as structural reforms and monetary policy, to promote growth.” The US Dollar Index is little changed at 96.30.
There is speculation Diageo will be taken over. The alcoholic beverage producer spiked in London trade following a report from Brazilian newsweekly Veja that Brazilian billionaire Jorge Paulo Lemann and his partners, Marcel Telles and Beto Sicupira, at private equity firm 3G Capital are looking to buy the company. Johnnie Walker whisky, Smirnoff vodka, and Guinness beer are among the company’s products.
Sears Holdings posted a big loss. The company announced a loss of $US2.85 per share as revenue tumbled 25.3% to $US5.88 billion. According to the release, “Kmart and Sears Domestic comparable store sales declined 7.0% and 14.5%, respectively, in the first quarter of 2015 driven by more efficient and targeted promotional and marketing spend, and a focus on sizing certain categories, such as consumer electronics, to better fit member needs, that together generated higher margins and increased profitability year-over-year; revenues were also impacted by port issues on the West Coast.”
Apple will be making some big announcements today. Apple is holding a press event at Monday’s conference for developers. The company is expected to announce major improvements to the apps available for the Apple Watch. Also, look for Apple to possibly debut its streaming music service, and announce updates for the iPhone, iPad and Mac.
China’s stock market hit a 7-year high and Germany’s entered a correction. Overnight, China’s Shanghai Composite (+2.3%) led Asian markets higher as trade hit its best level since the first quarter of 2008. In Europe, Germany’s DAX (-0.6%) is now 10% off its April 2015 high. S&P 500 futures are down 3.00 points at 2089.25.
US economic data is absent from the calendar. Data picks up tomorrow with the release of wholesale inventories and JOLTS – Job Openings.