AWS 6/23: Banks, Qatar Airways, and Economic News

Friday June 23, 2017

This is Brian Hamilton filling in for Mark Vickery while he is on vacation.

Yesterday, after the bell it was revealed that every major bank that is subject to the Federal Reserve's stress test easily exceeded minimum thresholds.  This news combined with the anticipated easing of regulations bodes well for the financial sector as a whole. 

In economic news, just after the opening bell we will be receiving both the manufacturing and services Purchasing Managers Indexes (PMI).   Also, throughout the day we will hear from three Fed speakers, St. Louis Fed President James Bullard, Cleveland Fed President Loretta Mester and Fed governor Jerome Powell who will be speaking at different engagements. Lastly, the closely watched home sales report showed that existing home sales rose by +1.1%, to a seasonally adjusted rate of 5.62 million units in May after slipping by -2.3% in April. 

In international news, today marks the one year anniversary of the Brexit vote.  Last night Prime Minister Teresa May sent a proposal to EU leaders that safeguards residency rights of EU citizens currently living in the U.K.  This proposal would impact about 3 million EU citizens currently living in the U.K.  This is one of the major issues leading up to Britain's March 2019 exit from the bloc. 

Also, it was reported that Qatar Airways made a surprise proposal to acquire a 10% stake in American Airlines.  This move is seen as very difficult given U.S. airlines current position that their Persian Gulf rivals have unfair advantages due to large government subsidies.  At current prices, this would represent about a $2.4 billion deal. 

On the oil front, prices have fallen by -4.3% over the last week of trading as increased production from shale producers is seen as nullifying the production cuts made by OPEC. 

Brian Hamilton