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DAILY MARKET REPORTS

  • U.S. stocks rose on Tuesday, boosted by energy stocks as oil prices rose, but gains were capped by a drop in technology stocks, with Facebook sliding on renewed concerns over its data scandal.
  • Facebook dropped 2% after the Washington Post reported a federal probe on the data breach linked to Cambridge Analytica was broadened and will include more government agencies.
  • Gains were led by a 1.47% jump in the energy sector, with all its 31 components trading higher as oil prices climbed more than 1% after Libya declared force majeure on significant amounts of its supply.
  • Trade tensions continued to fester, with President Donald Trump on Monday warning the World Trade Organization of “doing something” if United States is not treated properly.
  • Also looming is a July 6 deadline when Washington is set to impose tariffs on $34 billion worth of Chinese goods.
  • Economic data was mixed. New orders for U.S.-made goods unexpectedly rose in May, pointing to a strengthening manufacturing sector, but business spending on equipment continued to show signs of slowing.
  • Tesla fell 3.7% and was set to add to its 2.3% drop from Monday when the electric carmaker said it met its Model 3 production goal but failed to convince investors it could continue to do so.

US FINANCIAL MARKET

Facebook shares slip on report of widened probe on data scandal

  • The Federal Bureau of Investigation, the Securities and Exchange Commission and the Federal Trade Commission have joined the Department of Justice in its inquiries about the two companies and the sharing of personal information of 71 million Americans, the Washington Post reported citing five people.
  • The emphasis has been on Facebook’s sharing of information square with the underlying facts and whether the company made sufficiently complete and timely disclosures to the public and investors.
  • A Facebook spokesperson told Reuters on late Monday that it is cooperating with officials in the U.S., UK and beyond.

Ford’s U.S. auto sales rise about 1.2% in June

  • Ford reported an about 1.2% rise in U.S. auto sales in June, helped by a new record for sport utility vehicles for the month.
  • The No. 2 U.S. automaker said it sold 230,635 vehicles in June, compared with 227,979, a year earlier.
  • Sales of Ford brand SUVs grew 8.1% to 77,453 vehicles.

Oil hits $75 for first time since 2014 on supply outages in Libya and Canada

  • U.S. crude rose above $75 a barrel for the first time since November 2014 on Tuesday, as the market grew increasingly concerned about a shortage of oil amid supply disruptions in Libya and Canada and as tough U.S. sanctions on Iran loom.
  • The gains were fueled by an outage at a major Canadian oil sands facility and flaring tensions in Libya’s long-running conflict that raised fresh concerns about the country’s exports.
  • On Tuesday, Libya declared force majeure on exports from two critical ports, Zueitina and Hariga, that together handle about 850,000 bpd of oil shipments. That added to the loss of 360,000 barrels per day from Canada’s Syncrude facility in Alberta, which supplies the United States with heavy crude and suffered a power outage last month.

Google delay on ads standard for EU privacy law creates compliance mess

  • Google’s delayed entry into a consortium of advertising technology companies has spoiled the members’ push to comply with a new European privacy law, leaving some firms exposed to fines.
  • Most at risk are unwitting owners of ad-funded websites and apps, which Google has said have the responsibility of getting consent to serve targeted ads to European consumers.
  • Data about a website visitor’s identity can pass through a dozen ad tech firms before an ad is loaded, and each one must have user consent or another legal basis to access it under Europe’s General Data Protection Regulation (GDPR).
  • Google declined to comment on possible policy violations, instead reiterating that GDPR “is a big change for everyone” and that it is working with partners on compliance. GDPR fines can reach as high as 4% of a firm’s annual revenue.

PwC must pay FDIC $625.3 million over bank’s collapse: U.S. judge

  • A federal judge on Monday said PricewaterhouseCoopers LLP must pay $625.3 million in damages to the Federal Deposit Insurance Corp for failing to uncover fraud that led to one of the largest bank failures of the global financial crisis.
  • U.S. District Judge Barbara Rothstein found it more likely than not that PwC’s negligence was the proximate cause of FDIC damages from the August 2009 demise of Montgomery, Alabama’s Colonial BancGroup, once among the 25 largest U.S. banks.
  • Rothstein said PwC failed to uncover a multi-year fraud between Colonial, its former client, and Ocala, Florida-based Taylor, Bean & Whitaker, once the nation’s 12th largest mortgage lender and a major Colonial customer.

Samsung phones are sending pictures to contacts without users knowing

  • Samsung smartphones are sending users’ pictures to their contacts without their permission, according to complaints by a number of people posted online.
  • One user said that the entire photo library on his phone was sent over text to his girlfriend but there was no record of it on his messaging app. He discovered it had happened via his T-Mobile logs.
  • The issue appears to be affecting Galaxy S9 and Galaxy Note 8 users. Users are reporting that it is an issue with Samsung Messages, the default messaging app on the South Korean company’s devices.
  • A Samsung spokesperson told CNBC by email that it is aware of the reports and that the technical teams “are looking into the matter.” Later, Samsung updated the statement to say that it had investigated the issue and found that there was no software or hardware problem.

Glencore Shares Tumble After U.S. Subpoena

  • Glencore said it received a subpoena from U.S. authorities related to compliance with American corruption and money-laundering laws at its operations in Congo, Nigeria and Venezuela—a move that significantly ratchets up government scrutiny.
  • Glencore said the U.S. Justice Department issued a subpoena demanding it hand over documents and other records related to compliance with the U.S. Foreign Corrupt Practices Act and U.S. money laundering statutes.
  • Glencore’s mining operations in the Democratic Republic of Congo have been the subject of scrutiny by foreign governments and corruption watchdogs. But its oil operations in Venezuela and Nigeria haven’t surfaced before as a subject of interest by government officials.

Pfizer Raises Prices for Dozens of Drugs

  • Pfizer raised the list prices for more than 40 of its prescription drugs this week, marking a second round of increases this year despite mounting public scrutiny.
  • The increases apply to widely used drugs including lung-cancer treatment Xalkori, Norvasc blood-pressure pills and Lyrica pain capsules. Many lift the list prices by 9.4% and by double-digit percentages for the year overall.
  • The moves separate Pfizer from several rivals that have pledged to lift list prices only once every 12 months and by less than 10% overall for the year, as they try to blunt criticism and avoid congressional action.

Tesla’s Engineering Chief Is Out After Taking Leave of Absence

  • Tesla’s engineering chief won’t return from his leave of absence, a person familiar with the situation said, as the auto maker heads into a pivotal period to prove it can sustain production of the Model 3 sedan.
  • Doug Field, who had been senior vice president of engineering, stepped away from his work overseeing product development at the Silicon Valley auto maker in early May. At the time, a Tesla spokesman said, “Doug is just taking some time off to recharge and spend time with his family. He has not left Tesla.”
  • His departure is one of several high-level executive exits over the past two years as Tesla has struggled to bring out the Model 3, which is priced lower than its other luxury vehicles as part of a plan to transform the company into a more mainstream auto maker.

Lyft Follows Uber by Acquiring Bike-Sharing Startup Motivate

  • Ride-hailing firm Lyft said it agreed to purchase an urban bike-rental company recognizable by its curbside docking stations and sponsors like Ford and Citigroup.
  • The deal for Motivate International gives Lyft access to thousands of bicycles for short-term rental and a potential leg-up on bigger rival Uber, which recently bought smaller dockless bike-rental company Jump.
  • Lyft is spending about $250 million in cash for the New York City company, which compares with $200 million for Uber’s deal.

Lyft will gain about 30,000 bikes in eight U.S. cities from San Francisco to New York. Customers can rent them for intervals of 30 minutes typically for $3, or $10 to $12 for a day pass, depending on the city, and must return them to other docking stations.

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US ECONOMY & POLITIC

U.S. manufacturing accelerates, but tariffs cast a shadow

  • U.S. manufacturing activity surged in June, but a strong economy and import tariffs were causing bottlenecks in the supply chain, which could potentially weigh on production in the months ahead.
  • The Institute for Supply Management (ISM) said its index of national factory activity jumped to a reading of 60.2 last month from 58.7 in May. A reading above 50 in the ISM index indicates an expansion in manufacturing, which accounts for about 12% of the U.S. economy.
  • The ISM’s supplier deliveries sub-index soared 6.2 points to 68.2 last month, the highest level since May 2004 and accounting for the bulk of the increase in the ISM index.

Factory orders rise; business spending on equipment slowing 

  • New orders for U.S.-made goods unexpectedly rose in May, pointing to a strengthening manufacturing sector, but business spending on equipment continued to show signs of slowing.
  • Factory goods orders increased 0.4% amid strong demand for machinery. Economists had forecast factory orders to be unchanged in May. Orders increased 8.7% on a year-on-year basis in May.
  • Orders for machinery increased 1.2% in May, extending April’s 1.7% surge. That reflected an 8.9% jump in orders for industrial machinery. Demand for mining, oil field and gas field machinery fell 3.9%.
  • Orders for transportation equipment fell 1.1%, weighed down by a 7.0% plunge in the volatile orders for civilian aircraft. Transportation orders declined 6.1% in April.

Trump makes veiled WTO threat after EU warning on car tariffs

  • President Trump warned the World Trade Organization that “we’ll be doing something” if the United States is not treated properly, just hours after the EU said that U.S. automotive tariffs would hurt its own vehicle industry and prompt retaliation.
  • The United States has “a big disadvantage with the WTO. And we’re not planning anything now, but if they don’t treat us properly, we’ll be doing something,” Trump said, without elaborating.
  • Trump also said that his administration would be meeting with EU officials to “work something out” on trade. A spokeswoman for the U.S. Trade Representative’s office could not be immediately reached for comment on further details about such talks.

Trump meets with Supreme Court contenders, two in focus

  • U.S. President Donald Trump said he met with four potential Supreme Court justices on Monday, while a person familiar with the selection process said Trump was focused keenly on two people, although others were still in contention.
  • Federal appeals court judges Brett Kavanaugh and Amy Coney Barrett have gained the most interest from Trump and his team, said the person familiar with the selection process. Kavanaugh is a judge on the District of Columbia U.S. Court of Appeals. Barrett was named by Trump to the Chicago-based 7th U.S. Circuit Court of Appeals.
  • The other top potential nominees are Thomas Hardiman, who serves on the 3rd U.S. Circuit Court of Appeals; Raymond Kethledge of the 6th U.S. Circuit Court of Appeals; and Amul Thapar, whom Trump named to the 6th Circuit.
  • Making his second Supreme Court appointment less than 18 months into his presidency will let Trump cement conservative control of the court for years to come. Trump’s nominee must win Senate confirmation. Republicans control the chamber by only a slim majority, making the views of moderates, including some Democrats, important.

Pompeo to Visit North Korea Again, With a View Toward Denuclearization

  • Secretary of State Mike Pompeo on Thursday will leave for North Korea to engage in the first high-level talks on eliminating Pyongyang’s nuclear weapons and programs since the Singapore summit in June, U.S. officials said.
  • The trip comes amid growing concerns that Washington and Pyongyang may not share the same goals on the pace and scope of efforts to denuclearize the Korean Peninsula and reports that North Korea is proceeding with its weapons programs.
  • Administration officials have warned that relief from punishing sanctions that have been imposed on North Korea won’t come until those actions have been taken.

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EUROPE & WORLD

Merkel averts political collapse with a deal on migration

  • The German coalition government has been salvaged after Chancellor Angela Merkel reached a compromise with interior minister and the leader of the Christian Social Union (CSU), Horst Seehofer, ending a bitter standoff over immigration.
  • The deal’s details involve a “new border regime” that will prevent asylum seekers entering Germany whose “asylum procedures are the responsibility of other EU nations.” It also requires transit centers for migrants at the border. It was also reported that in cases where such agreements cannot be reached, they would nevertheless be rejected.”
  • The deal is not yet finalized however, with the CDU and CSU meeting with their junior coalition partner on Tuesday, the Social Democrats, which has to agree to the arrangement.

China’s Xiaomi says American ties to smooth U.S. push amid trade tension

  • China’s Xiaomi is pressing ahead with plans to enter the United States next year, saying its U.S. connections should help the consumer-focused smartphone maker skirt the political resistance met by some of its compatriot rivals.
  • Senior Vice President Wang Xiang told Reuters that the U.S. market was “very attractive” and that the firm was adding engineering resources to develop versions of its handsets that are compatible with U.S. cellphone networks.
  • The comments come as Huawei Technologies struggles to gain handset distribution deals with any U.S. carrier, while some U.S. politicians have called for a ban on the firm’s network equipment citing national security concerns.

Trump moves to block China Mobile’s U.S. entry on security concerns

  • The U.S. government has moved to block China Mobile from offering services to the country’s telecommunications market, recommending its application be rejected because the firm posed national security risks.
  • The FCC should deny the state-owned Chinese firm’s 2011 application to offer telecommunication services between the United States and other countries, the National Telecommunications and Information Administration (NTIA) said in a statement.
  • The NTIA said its assessment rested “in large part on China’s record of intelligence activities and economic espionage targeting the U.S., along with China Mobile’s size and technical and financial resources.”
  • It said the company was “subject to exploitation, influence and control by the Chinese government” and that its application posed “substantial and unacceptable national security and law enforcement risks in the current national security environment”.

U.S. to Consider Iran Sanctions Relief on a ‘Case-by-Case’ Basis

  • The Trump administration will consider requests for waivers from economic sanctions against Iran on a “case-by-case” basis, a senior State Department official said Monday, a step back from threats to insist on zero imports by a Nov. 4 deadline.
  • “We are prepared to work with countries that are reducing their imports on a case-by-case basis,” Brian Hook, the director of policy planning at the State Department, told reporters at a briefing, in response to a question about India’s and Turkey’s plans to continue to buy Iranian oil.
  • Mr. Hook said that sanctions targeting Iran’s automotive sector and key metals exports will be reimposed on Aug. 6, while oil sanctions will follow on Nov. 4, as previously indicated by the administration. He reiterated previous statements that the U.S. aims to eventually cut Iran oil export revenue to zero.

Iran’s Rouhani hints at threat to neighbor’s’ exports if oil sales halted

  • President Hassan Rouhani appeared to threaten to disrupt oil shipments from neighboring countries if Washington presses ahead with its goal of forcing all countries to stop buying Iranian oil.
  • Iranian officials in the past have threatened to block the Strait of Hormuz, a major oil shipping route, in retaliation for any hostile U.S. action against Iran.
  • The Iranian president is in Europe to gather support ahead of a meeting later this week between Iran and the five global powers that are still party to the 2015 nuclear deal. The five other powers have all said they still support the deal despite the U.S. decision to withdraw.
  • But so far it has proven difficult to offset the impact of continued U.S. sanctions, with European firms reluctant to risk far-reaching U.S. financial penalties to do business in Iran.

Alibaba, Tencent lead $1.5 billion investment in China media group CMC

  • Chinese state-backed media group CMC said on Tuesday it raised around 10 billion yuan ($1.49 billion) in a fundraising round from investors including tech giants Alibaba and Tencent.
  • CMC group is a major force in China’s entertainment and media sectors and has big global ambitions. It has a stake in the owner of English Premier League team Manchester City and a joint venture with Hollywood studio Warner Brothers Entertainment.
  • The round of funding valued the firm at around 400 billion yuan.

China’s Export Growth to U.S. Abruptly Slows as Tariffs Near

  • China’s customs agency unexpectedly issued trade data that showed growth in exports to the U.S. slowing, though analysts dismissed the figures as part of Beijing’s messaging campaign in its tariff battle with Washington.
  • In yuan terms, the data showed growth in Chinese exports to the U.S. ticking down to 5.4% in the January-June period from a year earlier. That is a slowing from the 5.8% pace over the first five months.
  • When trade figures in dollar terms are released later this month, exports are expected to have sustained the double-digit growth rates of recent months, the economists and analysts said.

Thai official says cave boys may have to dive despite danger

  • A top Thai official said Tuesday that heavy rains forecast for the coming days could worsen floods in a mountain cave, forcing authorities to speed up their extraction of the 12 boys and the soccer coach who are trapped there.
  • Officials early said the 13 are mostly in stable medical condition and have received high-protein liquid food after they were located late Monday night in the cave during a desperate search that drew international help and captivated the nation.

While efforts are to pump out the floodwaters continue, it’s clear some areas cannot be drained and in order to get out, the boys may need to use diving gear while being guided by two professional divers each.

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TODAY in HISTORY

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  • The Battle of Gettysburg (1863)

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