| Good morning. The debate on reopening European travel rumbles on, a tentative deal on U.S. infrastructure spending has been reached and the Archegos fallout continues. Here's what's moving markets. Travel CurbsGerman Chancellor Angela Merkel and French President Emmanuel Macron signaled a potential for more travel curbs in the bloc ahead of the peak tourist season, with the pair blasting Greece and other tourism-dependent nations for taking a lax attitude to accepting visitors. The U.K., meanwhile, has added the Balearic islands and Malta to its "green" list of quarantine-free destinations for travelers, while Prime Minister Boris Johnson signaled the country will push ahead with plans to ease the rules on foreign travel for fully vaccinated people. Tentative DealU.S. President Joe Biden reached a tentative bipartisan deal with senators for a $579 billion infrastructure plan, which he said will create millions of jobs while fulfilling a major part of his economic agenda. That news sent stocks in the U.S. to new highs, underpinning a sense of optimism that the economy's recovery will continue to push ahead. It could also feed through into various sectors in Europe on Friday, including industrial and construction stocks. Biden is also facing pressure, however, to include measures that will combat climate change. Archegos FalloutThe antitrust unit of the U.S. Justice Department is said to be examining how global banks handled multibillion-dollar trades with collapsed hedge fund Archegos Capital Management, which sent a batch of stocks into a spiral earlier this year. It comes as hedge funds, which have long avoided the political fray, are reversing course and launching a lobbying campaign to boost the industry's image amid growing scrutiny. The Bank of England's top banking regulator said earlier in the week that the Archegos meltdown was "extraordinary" and may well lead to supervisory fallout for the industry globally. Sneakers and ParcelsTwo earnings updates from big U.S. companies may read into Europe's day on Friday. Sportswear giant Nike soared after it forecast its fiscal year revenue will top $50 billion for the first time as it benefits from a rebound in North America. That could impact European peers Adidas and Puma. Shares in logistics group FedEx went in the other direction, however, as it said rising costs driven by surging parcel deliveries threaten to curtail the profits Wall Street is expecting. That could have a read-across for the likes of Germany's Deutsche Post. Coming Up…European stocks look set to gain for a second day, following the record hit in the U.S. and gains in Asia. It's a quiet day for European earnings, while consumer confidence data from the U.K., Germany and Italy tops the economic agenda. In the U.S., the latest personal income and spending report is likely to be closely scrutinized. Elsewhere, the latest movie in the Fast & Furious franchise, "F9," will be released in a test for the reopening of the cinema sector. What We've Been ReadingThis is what's caught our eye over the past 24 hours. And finally, here's what Cormac Mullen is interested in this morningCorporates are hitting the sell button on meme stocks. On Friday, the Nikkei reported Panasonic had sold all of its shares in Tesla by the end of March -- for almost 9 times what it bought it for. And earlier this week, GameStop sold another 5 million of its own shares, raising $1.1 billion to add to the $551 million it generated in a similar move in April. It's not hard to see why, given the nosebleed valuations in the space. GameStop is trading on 173 times 24-month forward estimated earnings (two years to account for the fact it is currently loss making), while Tesla is on 92 times the same measure. The equivalent for the S&P 500 is about 23 times. So they are both selling high -- with Panasonic locking in a healthy profit and GameStop taking advantage of the meme frenzy that has driven up its shares to bolster its balance sheet. And in the process reminding fresh investors in the popular stocks that they are not buying low.  Cormac Mullen is a cross-asset reporter and editor for Bloomberg News in Tokyo. Like Bloomberg's Five Things? Subscribe for unlimited access to trusted, data-based journalism in 120 countries around the world and gain expert analysis from exclusive daily newsletters, The Bloomberg Open and The Bloomberg Close. | 
Post a Comment