Iranian Drone Destroyed
Donald Trump said the U.S. shot down and “immediately destroyed” an Iranian drone that approached the USS Boxer near the Strait of Hormuz. The drone “was threatening the safety of the ship and the ship’s crew,” the president said, adding that he’s calling “on other nations to protect their ships as they go through the Strait.”
Asian Stocks Pointing Higher
Asian futures were pointing to a positive open after U.S. stocks rebounded from early losses. The recovery was boosted by comments from New York Fed President John Williams, who highlighted the need for swift action should the economy stumble. The S&P 500 erased losses to close slightly higher, led by consumer and financial stocks, while 10-year Treasury yields fell. The dollar was weaker against all major peers, and gold was higher.
Trade Talks Inch Foward
U.S. Treasury Secretary Steven Mnuchin said he and Trade Representative Robert Lighthizer had a call scheduled later Thursday U.S. time with their Chinese counterparts, denying Huawei restrictions are a sticking point in trade talks. Mnuchin also said there’s no change in the U.S.’s dollar policy “as of now,” but wouldn’t rule out a shift in the future. His comments come as the Trump administration softens the long-held U.S. stance of supporting a strong dollar, instead favoring a stable exchange rate as it battles China in a trade war and threatens tariffs on other countries.
Max Fallout Worsens
Boeing’s 737 Max grounding has a price tag, and it’s a big one. The company plans to record a $4.9 billion charge related to the beleaguered jetliner when it reports results next week. The costs, equivalent to $8.74 a share, cover potential concessions for customers who have been forced to cancel flights and line up replacement aircraft after the March grounding. The charge will clip $5.6 billion from revenue and pretax earnings in the quarter.
Bringing Up the Rear
Morgan Stanley posted the worst trading slump on Wall Street. Equities revenue dropped 14% and fixed-income fell 18% in the second quarter, both missing estimates. Investment banking sales declined 13%, slightly less than expected. On the bright side: profit topped consensus and wealth management revenue unexpectedly jumped.