By Lorcan Roche Kelly
Skepticism about Deutsche Bank’s mammoth turnaround plan is mounting, if the lender’s market price is any guide. Shares extended yesterday’s losses to trade 5% lower by 5:50 a.m. Eastern Time. Citigroup Inc. called the 2022 profitability goal “highly improbable” while others warned of high execution risk for the plan. The attempted turnaround also means difficult times for the 18,000 employees losing their jobs. They are hitting the market at a time when new positions are few and far between.
Under-pressure Federal Reserve Chair Jerome Powell will give opening remarks at a Boston Fed conference on stress testing at 8:45 a.m. this morning, in his last public appearance before he faces lawmakers on the House Financial Services Committee tomorrow. Federal Reserve Bank of St. Louis President James Bullard, Federal Reserve Vice Chairman for Supervision Randal Quarles and Federal Reserve Bank of Atlanta President Raphael Bostic are all due to speak later today. The European Central Bank’s new chief economist Philip Lane will hold a Q&A on twitter from 10:15 a.m. as more analysts see the bank relaunching bond buying programs this year.
The White House canceled an invitation yesterday for the British ambassador in Washington to attend a dinner with Treasury Secretary Steven Mnuchin as the diplomatic spat over Kim Darroch’s leaked comments continues. President Donald Trump said he would “no longer deal with” Darroch, in a series of tweets which also criticized Prime Minister Theresa May’s handling of Brexit. The U.K.’s exit from the European Union is on the minds of economists too as they predict the country’s economy is facing a downturn, pushing the pound to near its lowest level in two years.
Overnight the MSCI Asia Pacific Index slipped 0.4%. Japan’s Topix index closed 0.2% lower, with technology shares among the worst performers after Apple Inc. dragged down peers following an analyst downgrade. In Europe, the Stoxx 600 Index was down 0.8% by 5:50 a.m. in a broad-based sell off, with chemical companies weighing on the gauge following a profit warning from BASF SE. S&P 500 futures pointed to a loss at the open, the 10-year Treasury yield was at 2.068% and gold declined.
At 10:00 a.m. U.S. jobs openings data for June are published, with economists expecting a small rise in the number of positions available. At 1:00 p.m. the Treasury is due to sell $38 billion of three-year notes in what is likely to be a closely watched auction in the wake of last week’s blowout jobs report. PepsiCo Inc. and Levi Strauss & Co. report earnings. Allen & Co.’s annual Sun Valley conference starts today and will be attended by the great and the good of the tech and media industries.