- Reuters/Yves Herman
Here is what you need to know.
The ECB kept policy on hold. The central bank held its key interest rate at 0.00%, as expected, and said its corporate bond purchases will begin on June 8. During Mario Draghi’s press conference, which is scheduled for 8:30 a.m. ET, traders will be focused on any new economic projections and comments regarding the UK referendum. Thursday’s meeting is being held in Vienna. The euro is little changed near 1.1190.
OPEC meets. Leaders from the Organization of the Petroleum Exporting Countries meet in Vienna in an effort to reach an agreement over oil output. Expectations for a deal remain low because of a rift between Saudi Arabia and Iran. Saudi Arabia has previously said it will freeze production if Iran does as well. “An output ceiling has no benefit to us,” Iranian Oil Minister Bijan Zanganeh told Reuters ahead of the meeting. West Texas Intermediate crude oil is higher by 0.1% at $49.06 a barrel.
South Korea GDP slows. South Korea’s economy expanded by 0.5% quarter-over-quarter, beating the 0.4% gain that economists had forecast. Growth has slowed in two consecutive quarters, however, down from Q3’s 1.2% and Q4’s 0.7%. On a year-over-year basis, GDP was measured at 2.8%. The South Korean won ended stronger by 0.5% at 1,186.60 per dollar.
Global manufacturing has stalled. The latest JPMorgan-Markit global manufacturing purchasing managers’ index came in at 50.0 for May, down from 50.1 in April. The reading of 50.0 means global manufacturing neither expanded nor contracted during the month. “Indices for output, new orders and the headline PMI were all at, or barely above, the stagnation mark,” said David Hensley, director of global economic coordination at JPMorgan. “The move up in the finished goods inventory index suggests manufacturers are still working to realign stocks with demand.”
Saudi Arabia invests in Uber.Saudi Arabia’s Public Investment Fund, the main investment fund of the kingdom, has invested $3.5 billion in the ride-hailing service. Saudi Arabia’s investment comes following the recent announcement of its Saudi Vision 2030 plan, which aims to diversify the kingdom away from its dependence on oil. The investment swells Uber’s cash and convertible debt on Uber’s balance sheet to more than $11 billion, and it gives the company a $62.5 billion valuation.
McDonald’s is considering a move to Chicago. The fast-food giant is reportedly considering a move from its campus in Oakbrook, Illinois, to downtown Chicago, according to Crain’s Chicago Business. The location up for consideration is home to Harpo Studios, the former set of “The Oprah Winfrey Show.” McDonald’s most likely won’t move in until 2018, as the Harpo buildings need to be demolished and replaced with a new structure, Crain’s says.
Alibaba bought back stock from Softbank. On Tuesday, Softbank said it would sell at least $7.9 billion worth of its Alibaba holdings. On Thursday, Alibaba announced it would spend about $2 billion to buy back 27 million shares at $74 a share, Reuters reports. Once completed, Softbank’s sale will trim its Alibaba stake to 28% from 32.2%.
Stock markets around the world trade mixed. Japan’s Nikkei (-2.3%) was hit hard overnight, and Britain’s FTSE (+0.4%) leads the gains in Europe. S&P 500 futures are down a point at 2,097.00.
Earnings reporting remains slow. Hovnanian and Joy Global will report ahead of the opening bell, while Broadcom will release its quarterly results after markets close.
US economic data flows. ADP Employment Change will be released at 8:15 a.m. ET before initial and continuing claims cross the wires at 8:30 a.m. ET. Because it’s a holiday-shortened week, natural-gas inventories and crude-oil inventories will be announced at 10:30 a.m. ET and 11 a.m. ET. The US 10-year yield is unchanged at 1.83%.