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Trump ditches climate deal, U.S. stocks hit fresh records as Macau casino revenue surges, and it's jobs day in the U.S.A. Here are some of the things people in markets are talking about.
Art of Leaving the Deal
The U.S. will exit the Paris climate accord and seek to renegotiate the deal, President Donald Trump announced Thursday afternoon. Trump, who once called global warming a hoax invented by the Chinese, said the agreement as it currently stands disadvantages American workers. Fossil fuel companies are seen as the biggest beneficiaries from Trump's decision. The pledges made in the Paris agreement related to emission restrictions were voluntary and not legally binding. Even if all curbs were enacted, it would be insufficient in preventing global warming of more than 2 degrees Celsius this century, according to the UN. However, the exit from this agreement does mark a dramatic shift in policy relative to the last four U.S. administrations. This reversal upset a wide array of powerful people, from Pope Francis to Elon Musk, who announced he was leaving Trump's advisory councils in light of the U.S. move. A number of corporate executives had lobbied Trump to remain in the accord.
Fresh Records
Thursday's session ended with new closing highs for the Dow Jones Industrial Average, S&P 500 Index, and Nasdaq Composite Index . For the Dow, the return to fresh records has primarily been fueled by industrial, consumer, and tech companies, rather than a key pillar of the Trump Trade—the rally in financial shares. Major operators in Macau, such as Las Vegas Sands and Wynn Resorts, posted large gains on Thursday as casino revenue soared almost 24 percent year-on-year in May. The CBOE Volatility Index, often called the “fear” gauge, nosedived at the end of the session to close below 10 as Trump announced the American departure from the climate deal.
Jobs Day!
It's jobs day in the U.S.—and though the non-farm payrolls report will be released after Asia Pacific markets close, the results will certainly set the trading tone for next week. Economists are looking for job growth of 182,000 in May on the heels of a 211,000 increase in April. Average hourly earnings are expected to accelerate a tick to an annual pace of 2.6 percent, while the unemployment rate holds steady at 4.4 percent. The ADP's private employment report released Thursday crushed expectations, raising the bar for Friday's release somewhat and fostering a rise in Treasury yields as well as the U.S. dollar, the best-performing G10 currency on the day.
Comey Testimony
Former FBI Chief James Comey is slated to testify before the Senate Intelligence Committee June 8, perhaps addressing reports Trump sought to push him to abandon the probe of fired national security adviser Michael Flynn—raising questions of potential obstruction of justice. The FBI's probe of Russian interference in the 2016 U.S. election (and potential collusion by members of Trump's campaign team) has been heating up, with the president's son-in-law, Jared Kushner, becoming a person of interest. The investigation threatens to undermine progress on other policy matters. On Thursday, Russian President Vladmir Putin said he liked the U.S. president and suggested that “patriotically minded” Russians might have taken it upon themselves to meddle in the U.S. election. June 8 is shaping up to be quite an eventful day—besides the testimony, there will also be an ECB meeting and the U.K. election.
Futures Up
Nikkei 255 and S&P/ASX 200 futures are pointing to a positive open as of 5:30 a.m. Tokyo time. Softness in the yen helped Japanese equities advance more than 1 percent on Wednesday, paving the way for gains in the broader MSCI Asia Pacific Index. A disappointing private purchasing managers' index print weighed on Chinese stocks.
What we've been reading
This is what caught our eye over the last 24 hours.
Why is China supercharging the yuan?
A meowgnum opus: ETF based on cats rings up 850,000 percent return.
Banning laptops on airplanes could kill people.
Look at haircuts not car sales to judge strength of U.S. economy.
Discounts and rental fleets support U.S. auto sales in May.
Illinois becomes least creditworthy state in U.S. history.
The video game league that costs $10 million to join.
To contact the author of this story: Luke Kawa in New York at lkawa@bloomberg.net.
To contact the editor responsible for this story: David Rovella at drovella@bloomberg.net.
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