Sentifi Briefing-June 7: No Rate Hike from the Fed in June

June 7, 2016


Janet Yellen and her Federal Reserves never fail to be a source for market-moving news, as they are signaling the next rate hike won’t happen in June, with July or September being more appropriate. It’s due to the U.S. economy failing to give strong indicators it can withstand another rate hike without collapsing. The U.K. is not doing that much better with three recent Brexit-related polls showing a strong favor for an exit, dragging the pound down close to three-week lows. With the U.K. referendum being less than three weeks away, the pound is bound to see more volatility. Read on to see the other trending stories on Sentifi.


1/ Janet Yellen: Refuses to specify the timing of the next rate hike [4,911 messages in the last 24h]

The Federal Reserves and its chairwoman officially decided to not increase the interest rates in June due to weak job growth in May, but they are still optimistic about a likely rate hike in July or September. But this very uncertainty and ambiguity have sent Asian shares to a five-week high. Economists are speculating July or September will see a rate hike, while traders in futures markets are betting on later in the year.

2/ GBP: Weakens after more Britons favor Brexit [1,791 messages in the last 24h]

The pound is falling to three-week lows as more Britons are favoring Brexit.

Brexit supporters are having a great time as the results of three more recent polls show favor to Brexit. Good news for Brexit supporters notwithstanding, it’s bad news for the pound as the currency is falling closer to three-week lows against the dollar. Politician Boris Johnson said this effect on the pound will only be short time, and the return would be fantastic.



3/ Mark Zuckerberg: Social media accounts got restored after being hacked [600 messages in the last 24h]

Facebook’s CEO got scared after his Twitter and Pinterest accounts got hacked by OurMine Team, but luckily they were rescued. The reason for the successful hacks? Weak passwords. As of now, the motive of the hacking still is not clear, with many people writing off the incident as harmless.

4/ Sports Direct Intl: British lawmakers attack the company over working practices [478 messages in the last 24h]

The company’s CEO will make an appearance in the lower house of parliament’s Business, Innovation and Skills select committee to answer to the accusations of poor working conditions. These accusations may or may not have an effect on the company’s slumping profits, but its deputy chairman has outright said the press intrusion has hurt the company’s results.

5/ Burberry: CEO takes a 75% salary cut [383 messages in the last 24h]

Burberry is facing problems with its profits and sales as demand from China and Hong Kong is weakening. (AP / Eugene Hoshiko)

As Burberry continues to struggle with sales, its executives are taking pay cut as a result, including the CEO and other executive directors. The falling demand from once strong markets such as Hong Kong and Macau has taken a toll on the company and caused it to release a warning that they will continue to hamper results in the short term. In light of the weak global markets, the company has decided to cut costs in the form of simplifying the product range and overhauling the retail operations.



6/ Steel: Weakening demand amid oversupply [379 messages in the last 24h]

China, the world’s number one steelmaker, is accused of flooding the world market with cheap steel that led to overcapacity and job cuts in the industry. U.S. Treasury Secretary has asked the country to cut excess capacity as it’s created a distorting and damaging effect.

7/ FINRA: Fines paid to the firm won’t be tax-deductible [368 messages in the last 24h]

The Internal Revenue Services has ruled that all fines and penalties paid to the Financial Industry Regulatory Authority shouldn’t be tax-deductible. And this could be a costly decision for the financial firms and traders that get in trouble with FINRA. Just recently, FINRA imposed a $900,000 fine on E*Trade for not safely securing the handling of customers’ trades.

8/ Alexion Pharma: Shares fall after drug trial failure [242 messages in the last 24h]

The biotech company recently announced the failure of the phase 3 trial of its drug Soliris. Its shares went down 9%, but the company reassures its investors that this is only a short-term effect. Soliris has been approved by the FDA, which helps keep the company optimistic about the long run.

9/ T-Mobile US Inc: Offers monthly subscribers a share of its stock for free [222 messages in the last 24h]

T-Mobile is showing its appreciation for its customers with a promotional campaign that includes free shares, food, movie tickets and more.

In a move to keep customers, the carrier decides to reward its monthly subscribers with a new program called “Stock Up.” Each of them will receive one free share of common stock of the company, which was worth $43.56 at the time of announcement. Qualified customers have a chance to own more shares when they refer friends to the company. The program is merely a part of a promotion campaign in which the carrier will offer weekly perks such as free food, movie tickets, ride shares and wi-fi.



10/ Hortonworks Inc: Stakeholders are contemplating on taking profits on the company [172 messages in the last 24h]

The company’s shares have been doing well lately, increasing 4.68% over the course of five days. Wall Street has agreed on a $19.888 price consensus for the company based on predicted earnings growth. The stock has been -44.84% year to date, so this rally could very well be temporary, prompting investors to consider selling off the stocks now to make a profit before it heads downward again.

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