The Federal Reserve is expected to keep interest rates unchanged today amid concerns about a U.S. hiring slowdown and Britain's possible exit from the EU. However, there will be a lot more for traders to scour than the standard 2 p.m. statement, including economic projections and the famous dot plot. Janet Yellen's press conference could also provide clues on the health of the economy, the trajectory of hikes and the impacts of a Brexit.
"Central banks are losing control and they don't know what to do," Jeffrey Gundlach said ahead of the FOMC announcement. "The Fed is confused and their confusion spills into investor psychology... it seems every other week the message is different. They've turned into the Zombie Fed." The bond guru also noted it was a "dangerous price appreciation game" to purchase German Bunds at current levels and that gold and gold miners are still attractive.
With opinion polls showing momentum swinging to the "Out" camp, British finance chief George Osborne is warning voters that he will increase taxes and cut spending if they decide to leave the bloc in next week's referendum. Meanwhile, the world's biggest banks are drafting senior traders to work through the night of June 23, which is set to be among the most volatile 24 hours for markets since Black Wednesday of 1992.
Chinese stocks rose the most in two weeks today as investors shrugged off MSCI's decision not to add mainland shares to its key Emerging Markets Index (ETF: EEM). This marks the third year running it has given Chinese A-shares the thumbs-down, given lingering concerns about market accessibility. MSCI noted that it would consider including the equities as part of its 2017 review, but did not rule out a potential off-cycle announcement.
Hillary Clinton formally concluded the U.S. Democratic presidential race on Tuesday with a win in Washington, D.C., then turned her focus to uniting the party during a 90-minute private meeting with defeated rival Bernie Sanders. The latter had promised to stay in the race until the Democratic convention, but in the past week he stopped talking about capturing the party's nomination and instead focused on ways to leverage his policy goals.
California has overtaken France as the world's sixth-largest economy, growing by 4.1% in 2015. The most-populous U.S. state, with a gross domestic product of $2.5T, has also eclipsed recession-plagued Brazil. "This is the result of both good growth in California and exchange-rate movements of the dollar vs. other currencies," said Irena Asmundson, chief economist of the California Department of Finance.
The U.S. and Venezuela are launching high-level diplomatic talks to ease tensions in the South American country amid deepening social and economic crises. Secretary of State John Kerry said the talks with Washington's ideological foe would begin in Caracas "as soon as possible" and that the U.S. was looking at ways to provide assistance.
More political earthquakes in Brazil... The country's Supreme Court has denied ex-president Lula da Silva a privileged legal protection, increasing the likelihood he will be arrested in connection with a corruption probe centered around Petrobras (NYSE:PBR). Meanwhile, Speaker Eduardo has lost his seat for allegedly lying about undeclared Swiss bank accounts and President Dilma Rousseff has been stripped of some perks, including her use of Air Force planes and hotel bill allowances.
Uber is turning to the leveraged-loan market for the first time to raise as much as $2B, Dow Jones reports, in yet another sign of the popular ride-sharing network's hunger for cash as it expands around the world. The fundraising follows a recent equity injection of $3.5B from Saudi Arabia and could continue to delay the need for an UBER IPO.
According to reports in the Asahi and Yomiuri newspapers, Mitsubishi Motors (OTC:MMTOY) used improper fuel economy data in additional car models that are no longer being sold and plans to report on the matter soon. The mileage scandal has so far prompted the automaker to restate past earnings, shake up management and sell a controlling stake to Nissan (OTCPK:NSANY).
The U.S. State Department cannot yet address whether Boeing (NYSE:BA) has obtained a license to sell commercial planes to Tehran, but a spokesman confirmed that the Iran deal does allow sales of the aircraft on a case-by-case basis. On Tuesday, the Islamic Republic announced it had reached a jetliner agreement with Boeing, reopening the country's skies to new U.S. aircraft for the first time in decades.
Twenty-five years after classifying coffee as a possible carcinogen leading to bladder cancer, the World Health Organization has reversed course, and is expected to say today that coffee isn't classifiable as a carcinogen. WHO is also likely to state coffee has no carcinogenic effects related to other cancers and has even been seen to reduce the risk of liver and uterine cancers. Related tickers: SBUX, DNKN, SJM, QSR, MCD, MDLZ, KKD, WWAV, JVA, FARM
Amarillo SWAT officers have shot and killed a man who took his manager and another person hostage inside a Wal-Mart (NYSE:WMT) Tuesday afternoon. "As soon as we heard about the situation... we acted immediately," said company spokeswoman Deisha Barnett. Police identified the suspect as 54-year-old Mohammad Moghaddam, who was apparently upset about getting passed over for a promotion.
"We have to protect [intellectual property], we have to do everything to stop the fake products, but OEMs are making better products at a better price," Jack Ma said during a speech in Hangzhou. The remarks by the chairman of Alibaba (NYSE:BABA), which has long been dogged by accusations of tolerating the sale of counterfeit goods on platforms such as Taobao, are unlikely to be welcomed by luxury goods makers.
BlackRock's business leaders are set to present their strategies and observations regarding the state of the asset management industry at the company's annual investor day in New York. Wall Street will be looking for convincing plans on how BlackRock (NYSE:BLK) aims to grow units other than its booming ETFs franchise at a time when traditional money managers have been challenged to post competitive performance figures.
MetLife has waived its retirement policy for CEO Steven Kandarian, allowing him to continue in the top job past his 65th birthday next March. "With the company in the midst of dramatic change, we believe Steve's continued leadership will serve shareholders," said Cheryl Grise, the board's independent lead director. MetLife (NYSE:MET) is currently looking to separate its capital-intensive U.S. retail unit and defeat a U.S. appeal over its SIFI designation.
A World Health Organization panel has elevated the Zika virus to a public health emergency, but spurned calls to postpone or move the 2016 Olympic Games, which are scheduled to begin in Rio de Janeiro in six weeks. Brazil is hosting the Games during its winter, when the concentration of mosquitoes that spread Zika and other viruses is low, the committee noted. The country is also intensifying its efforts to control mosquitoes around cities and event venues.
U.S. Senator Charles Grassley, chairman of the Senate Judiciary Committee, is urging federal antitrust officials to conduct a "careful analysis" of Dow Chemical's (NYSE:DOW) proposed $130B merger with DuPont (NYSE:DD). Among the concerns: A decrease in farming competition, raising barriers to entry for smaller companies, hurting innovation and lifting prices of products.
A ConocoPhillips pipeline has leaked nearly 2,400 barrels of condensate, an ultra-light form of oil, within an endangered caribou and grizzly bear range in west-central Alberta. The province's energy regulator has issued an environmental protection order to COP, which said it was investigating the cause of the spill and shut down and isolated the pipeline.
Out of the public eye for more than a year, Sumner Redstone has made appearances at Viacom's (VIA, VIAB) Paramount Pictures and CBS's West Coast headquarters over the past five days. The visits come as Viacom lead independent director, Fred Salerno, pleads for a meeting with Redstone and warned of further court battles if the media tycoon remains inaccessible to the board.
Two years after it thought about buying SoundCloud, Twitter (NYSE:TWTR) has reportedly invested $70M in the music service. The round is expected to value SoundCloud at about $700M - the same amount that investors placed on the company in 2014, when it raised $60M. Twitter is up 9.6% over the last two days, as Microsoft's (NASDAQ:MSFT) $26.2B deal to buy LinkedIn (NYSE:LNKD) fueled hopes it would also get acquired. TWTR +1.2% premarket.
Google Fiber is looking to expand in the Lone Star state. The Alphabet (GOOG, GOOGL) unit is working with Dallas leaders to learn more about the city's existing infrastructure, local topography and other factors that could impact the building of a fiber network. The service, which costs $70 per month, is already available in Austin and is set to roll out in San Antonio.
In Asia, Japan +0.4% to 15919. Hong Kong +0.4% to 20467. China +1.6% to 2887. India +1.3% to 26726.
In Europe, at midday, London +0.8%. Paris +1.4%. Frankfurt +1%.
Futures at 6:20, Dow +0.3%. S&P +0.2%. Nasdaq +0.2%. Crude -1% to $48.03. Gold -0.3% to $1284.20.
Ten-year Treasury Yield +2 bps to 1.63%
7:00 MBA Mortgage Applications
8:30 Producer Price Index
8:30 Empire State Mfg Survey
9:15 Industrial Production
10:30 EIA Petroleum Inventories
2:00 PM FOMC Announcement
2:00 PM FOMC Forecast
2:00 PM Chairman Press Conference
4:00 PM Treasury International Capital