Here is what you need to know.
Brazilian President Dilma Rousseff faces impeachment. Brazil’s Senate voted 55 to 22 in favour of putting President Rousseff on trial for breaking budget rules, Reuters reports. This means Rousseff will be suspended from office until a verdict has been reached, at which point she will be allowed to return to office or have to pay the consequences of her crimes. In the interim, Vice President Michel Temer will serve as acting President.
The IEA has some good news for the oil industry. Reuters reports, the International Energy Agency says unplanned disruptions in places like Nigeria, Libya, Venezuela and Kuwait could help ease the backlog of oil supply, and that growing demand from China and India could also provide support. However, in the near-term, “Further oil price rises … are likely to be limited by brimming crude oil and products stocks that will remain a feature of the market until more normal levels of inventory are reached,” the IEA said. West Texas Intermediate crude oil is up 0.8% at $46.62 per barrel, and near its best level in six months.
Gold demand is at a record high. The World Gold Council says demand for gold climbed to an all-time high 1,289.8 tonnes during the first quarter of 2016. According to the WGC, “Negative interest rates, stock market volatility and concerns over global economic growth all contributed to the upsurge in demand.” Inflows into gold exchange traded funds totaled 363.7 tonnes and were the highest since the first quarter of 2009. Gold is weaker by 0.5% at $1269.40 per ounce.
The Bank of England lowers its growth forecast. The central bank held its key interest rate at 0.50% for an 86th straight month. Additionally, Thursday’s decision was the fourth straight meeting where the vote was unanimous. In the accompanying Inflation Report, the BOE lowered its Q2 growth estimate to up 0.3% from up 0.5%, and its 2016 GDP forecast to up 2% from up 2.2%. The British pound is higher by 0.2% at 1.4475.
The FTC might be reopening its antitrust case against Google. Senior antitrust officials are collecting information, and are considering reopening their case against Google, Politico’s Nancy Scola reports. The original case was closed in 2013 without finding any wrongdoing. Currently, Google is fighting antitrust claims against its Android operating system in Europe.
Nissan is buying a big stake in Mitsubishi. Reuters reports, Nissan has agreed to buy a 34% stake in embattled automaker Mitsubishi for $2.2 billion The deal will help Mitsubishi “regain trust” as it deals with its third scandal in two decades. In April, Mitsubishi admitted it overstated the fuel economy of at least four of its models. With more than a third of the shares, Nissan will be able to take control under Japanese shareholder rules, Reuters says.
A key person involved in Bill Ackman’s Valeant investment is leaving Pershing Square. William Doyle, a key figure involved in Pershing Square’s Valeant investment, is leaving the fund to focus on his role as Executive Chairman of Novocure, a privately owned cancer therapy company. In addition, Doyle will take a part-time role at Table Management, a firm that oversees private investments for Ackman’s family. Doyle is said to have played a role in introducing Ackman to Valeant CEO Michael Pearson, whom he knew socially.
Stock markets around the world are mostly higher. Spain’s IBEX (+0.8%) leads the gains in Europe after Japan’s Nikkei (+0.8%) was the top performer in Asia. S&P 500 futures are up 11.50 points at 2069.50.
Earnings reporting continues to slow. Kohl’s, Perrigo, and Ralph Lauren are among the names revealing their quarterly results ahead of the opening bell. Nordstrom, NVIDIA, and Symantec highlight the companies reporting after markets close.
US economic data remains light. Initial and continuing claims and import/export prices will all be released at 8:30 a.m. ET. Then, natural gas inventories will cross the wires at 10:30 a.m. ET. The US Treasury will hold a $15 billion 30-year bond offering at 1 p.m. ET. The US 30-year yield is up three basis points at 2.61%.