Morning Brief: Deutsche Bank fails Fed's bank stress test

Friday, June 29, 2018

What to watch today

On Friday, markets will say goodbye to what’s been a rocky quarter and a much more interesting start to 2018 than the relatively placid market conditions that prevailed throughout 2017. Year-to-date, the S&P 500 is up 1.6%, the Nasdaq is up a robust 8.7%, while the Dow is in red numbers for the year, having shed 2% through the close of business on Thursday.

Friday’s economic and earnings calendar will bring investors some notable economic reports on inflation and consumer sentiment while earnings out of Constellation Brands (STZ) will be the only results from the S&P 500.

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Top news

Deutsche Bank

Deutsche Bank shares rise after U.S. stress test failure: Deutsche Bank (DB) shares rose more than 3% on Friday, a day after its U.S. subsidiary failed a second part of the U.S. Federal Reserve’s annual stress tests. The Fed, which regularly checks banks’ financial strength, had cited “widespread and critical deficiencies” in Deutsche’s capital planning controls. The Fed’s criticisms mark another blow for the German bank which is trying to revive profitability and whose shares are down 41 percent this year. [Reuters]

China’s Xiaomi prices HK IPO at bottom of range, raises $4.72 billion: China’s Xiaomi Corp priced its Hong Kong initial public offering at the bottom of an indicative range, raising $4.72 billion in the world’s biggest tech float in four years, people close to the transaction said on Friday. Xiaomi priced its share offering at HK$17 per share ($2.17), the bottom of a price range of HK$17 to HK$22. It is selling about 2.18 billion shares, making the IPO the largest in the technology sector since Alibaba  raised $25 billion in New York in 2014. [Reuters]

Embattled ZTE expected to unveil new board in push for U.S. ban lift: Chinese telecoms giant ZTE Corp is expected to announce a radical management overhaul following a shareholder meeting on Friday, in line with conditions laid out in a $1.4 billion settlement deal to lift a crippling U.S. supplier ban. Some shareholders attending ZTE’s annual general meeting at its Shenzhen headquarters expressed dismay at the huge losses they have suffered as a result of the ban that has sent ZTE shares into a tailspin.

Barnier says ‘huge’ gaps remain between EU and UK on Brexit: The European Union’s chief Brexit negotiator said Friday that there are still “huge and serious divergences” between Britain and the bloc on Brexit, after U.K. Prime Minister Theresa May warned that failure to strike a good divorce deal could endanger European security. Leaders of the 27 EU nations other than Britain were assessing the state of the faltering negotiations at a summit in Brussels on Friday. [Associated Press]

Nike returns to growth in North America, tops estimates: Nike (NKE) beat fourth-quarter profit and revenue estimates as new launches and focus on direct-to-customer sales helped reverse declining sales in North America for the first time in a year. The Dow component’s shares rose 8% to $77.40 and were on track to hit a record at open on Friday after the company also announced a new $15 billion buyback program and said it expected fiscal 2019 revenue at the higher end of its earlier forecast. [Reuters]

NIKE MAG shoes are displayed during its unveiling at The Montalban Theatre in Hollywood, California. REUTERS/Danny Moloshok/File Photo

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The Morning Brief provides a quick rundown on what to watch in the markets, top news stories, and the best of Yahoo Finance Originals.