Today's financial news, Bank of England, ECB, Fed, interest rates, stocks, reports

The Bank of England is not expected to change interest rates today. But markets are pricing in almost a 50-50 chance of a rate cut in June, so the focus is on whether policymakers will lay any groundwork for easing in six weeks.

Academic Swati Dhingra had already voted for the cuts in March and was joined this month by deputy governor Dave Ramsden. Gov. Andrew Bailey has expressed confidence in cutting rates this year, without giving a timetable for doing so.

The cut is fully planned for August, and last week short positions in sterling rose to their highest level since January 2023, so the currency could fall if post-meeting forecasts fall short of market expectations.

Britain's FTSE 100 index hit a record high on Wednesday, thanks in part to hopes of an imminent rate cut.

The European Central Bank has all but promised a rate cut on June 6, almost certainly ahead of the US Federal Reserve, and the relative outlook from London could give some direction to the EUR/Sterling pair.

The stock market continues to stagnate in the absence of new data. Weak placement of 10-year US government bonds and rising oil prices slightly lowered bond quotes. In the morning the markets are calm.

Sweden's Riksbank became the second major central bank to cut interest rates this cycle (to 3.75%). The first was the Swiss National Bank.

Boston Fed President Susan Collins: Fed interest rates will likely remain high longer than "previously thought"
The Bank of Japan's policy board is becoming increasingly concerned about the risks of rising inflation amid a sharply weaker yen. From the minutes from the last meeting of the Bank of Japan.

AstraZeneca (AZN) is revoking the marketing authorization of its COVID-19 vaccine worldwide. The vaccine recall was filed on March 5 and took effect on Tuesday. The company explains this decision solely by commercial considerations. They say the drug is no longer in demand - The Telegraph. However, the newspaper writes that the reason for the recall of the vaccine may be a dangerous side effect that can lead to blood clots and death. Fifty-one families have sued AstraZeneca, claiming the Covid-19 vaccine is to blame for the deaths and injuries of their loved ones. AZN shares rose 1% yesterday.

Bloomberg: OpenAI is preparing to launch a search service to compete with Google and Perplexity. New functionality may become part of ChatGPT.

Google parent company Alphabet has called on a London tribunal to block the massive lawsuit. Accusing it of abusing its dominance in the online advertising market.

Morgan Stanley advised investors to focus on defensive sectors. Investment bank Morgan Stanley is confident: judging by the latest macroeconomic data, the American economy has not yet made a “landing,” either “hard” or “soft.”

Chinese electric car makers are leaving Western rivals in the dust - The Economist. Chinese automakers are releasing new models faster and much cheaper than their foreign competitors. There is an opinion that Chinese electric cars can cost half as much as European ones, with better technology. True, a brutal price war could slow the breakneck growth of the Chinese auto industry.

The US is resuming oil purchases. To replenish your strategic reserve after the recent correction in prices - Bloomberg. Rumors surrounding OPEC are pushing oil prices down. From July, members of the organization will gradually increase production. Money is more important than politics.
Ukrainian strikes on Russian refineries lead to a decrease (!) in world oil prices - Foreign Affairs
The strikes affect the Russian Federation’s ability to convert crude oil into fuel. As a result, crude oil exports increase, leading to lower global prices. The publication writes that repairing the refinery may take years, and within the Russian Federation prices for petroleum products such as gasoline and diesel fuel have already begun to rise sharply.

The United States has revoked licenses to supply Intel and Qualcomm chips to the Chinese company Huawei – FT. Intel (INTC) shares fell about 3%.

Executives from IKEA, Coere, Swarovski and UniCredit will speak at the WSJ Board of Directors. The Wall Street Journal convenes its annual Board of Directors in London to discuss the forces shaping politics, business and the economy.

Meta launches new artificial intelligence tools for advertisers. Meta Platforms is expanding its suite of generative AI tools for use by advertisers, the company's latest move to integrate AI into its consumer products.

Uber's (UBER) forecast for a key booking metric fell short. Which led to a drop in the company's shares by 6%.

Shopify (SHOP) shares fell 19%. After the e-commerce platform forecast its slowest quarterly revenue growth in two years.

Tesla (TSLA) deliveries in China fell 18% y/y in April. And by 30% m/m.

BYD increased sales by 49% to 312,048 units (Tesla had 62,167).

All EV sales in China in April increased by 33% y/y to almost 800 thousand units.

But iPhone (AAPL) sales in China grew by 12% y/y in March.

BMW reported weakly – margin fell to 8.8% due to rising costs.

Costco (COST) stock is neutral. April sales, while slowing, were back up by a strong double digit in e-commerce. Same-store sales, a metric that measures sales at stores open more than a year, rose 5.6% year-over-year in April. In March they grew by 7.7% y/y.

Stocks in premarket after reports:
APP +16%
HOOD +4%
TTD +1%
CART -1%
AMC -4%
ABNB -8%
ARM -9%
DUOL -12%
BYND -14%

Reports today
Premarket – RBLX, WBD, PLUG, PLNT, PZZA, DNUT, H, BTAI
After market close – MARA, U, DBX

The Bloomberg Tech Conference will feature Snap (SNAP) co-founder and CEO Evan Spiegel, Meta (META) Chief Product Officer Chris Cox, and Reddit (RDDT) CEO Steve Huffman.

The Bank of England will publish a report on monetary policy.

Tapestry (TPR) will report Q1 earnings, its first since the FTC sued to block its planned acquisition of Capri (CPRI).