Rising tensions in the Middle East, the impending testimony of James Comey, British elections and an ECB meeting this week, all seem to be taking their toll on stocks, oil and the dollar. However, gold and other safety plays are finding buyers, as investors focus on geopolitical concerns. Despite the slight pullback, equity indexes are still hovering at all-time record highs.

Economy

President Trump wants to "de-escalate" the growing rift between energy-rich Gulf allies after Saudi Arabia led a drive to isolate Qatar by cutting off border crossings, ending banking ties and ordering its citizens out of the country. Yemen, Libya's eastern-based government and the Maldives have also joined the coordinated move, accusing Qatar of supporting terrorism and extremist groups.

The IMF believes Greece needs a debt haircut, which Germany rejects, but Managing Director Christine Lagarde said her organization is willing to compromise on the next tranche of the country's bailout. "There can therefore be a program in which the disbursement only takes place when the debt [relief] measures have been clearly outlined by the creditors," she told Handelsblatt.

In its latest monetary policy decision, Australia's central bank kept its benchmark cash rates at a record low of 1.5%, amid a mixed picture of weaker growth signals, a stronger job market and slowing house prices. "Looking forward, economic growth is still expected to increase gradually over the next couple of years to a little above 3%," Governor Philip Lowe said in a statement.

Less than a week after President Trump pulled the U.S. out of the Paris climate accord, energy ministers from around the world will gather today through Thursday in Beijing to discuss clean energy investments and technologies. Energy Secretary Rick Perry will represent the U.S. The gathering comes amid strong support for Paris among hundreds of U.S. businesses, which declared a "We Are Still In" campaign that plans on honoring the pact.

The White House is expected to unveil its vision for banking regulation early this week, with a vote on the Financial CHOICE Act. Supporters have argued that regulations have become too burdensome and unfair, but it doesn't appear there are numbers in Congress to overturn Dodd-Frank. Instead, Wall Street is expecting relief for community banks, as well as a relaxation of stress tests and resolution planning.

South Africa has slipped into a recession for the first time since 2009, as GDP receded an annualized 0.7% in Q1 from a contraction of 0.3% in the previous three months. While rains are helping Africa’s most-industrialized economy recover from a severe drought in 2015, political uncertainty has hampered implementing reforms aimed at boosting growth.

An electoral court is starting a three-day session today that could indirectly decide the fate of Brazil's pension-overhaul bill, which aims to pave the way for sustainable growth. The court will determine whether the winning ticket in the 2014 election (which included current President Michel Temer) used illegal funding. If he ends up being ousted, the bill is likely to get stuck or even killed in Congress.

The U.S. Justice Department has charged a federal contractor with sending classified material to The Intercept, marking one of the first concrete efforts by the Trump administration to crack down on leaks to the media. The arrest of Reality Leigh Winner, 25, over a document on Russian hacking, comes days before former FBI director James Comey testifies on the hill.

Stocks

Apple kicked off its annual worldwide developers' conference by unveiling a number of products and updates, but the new devices and software failed to wow investors - AAPL ended the session down 1%. In a two-and-a-half hour keynote address, the tech giant unveiled the HomePod, a $349 home speaker powered by Siri, as well as the iOS 11, iPad Pro 10.5, new Macs and the Watch OS 4.

An all-stock option for merging T-Mobile (NASDAQ:TMUS) and Sprint (NYSE:S) is gaining ground and would avoid the need for complicated financing, Bloomberg reports. While the companies' parents are only in the very early stages of talking about a get-together, SoftBank (OTCPK:SFTBY) and Deutsche Telekom (OTCQX:DTEGY) could realize deal synergies without the need for the latter paying a big cash premium.

Shares in Toshiba rallied as much as 4% overnight. It comes after the Asahi newspaper reported that the Japanese conglomerate is considering giving Broadcom (NASDAQ:AVGO) exclusive negotiating rights to buy its prized chip business. Broadcom teamed up with U.S. buyout firm Silver Lake in its bid for the Toshiba (OTCPK:TOSYY) unit, sources previously told Reuters.

In a purchase that could mark its biggest announced acquisition, SNAP just bought Seattle-based startup Placed, in a deal that Geekwire reported was worth up to about $200M. Placed was founded in 2011 and tracks in-person consumer habits, including store visits and customer locations, so advertisers can see how well specific ads pay off.

Seattle's City Council has voted to levy a special tax on sodas and other sugary beverages, becoming the latest of several local government bodies across the country to take such action. The measure is expected to take effect in early July and add about $1.18 to the cost of a 2-liter bottle of soda. Related stocks: KO, PEP, DPS, MNST, FIZZ, SBUX, UL, PG

Precursor to NAFTA? Commerce Secretary Wilbur Ross has extended the deadline for U.S.-Mexico sugar trade negotiations by 24 hours, as new demands surfaced after the governments struck a provisional deal. At stake is the possibility of stiff U.S. duties and Mexican retaliation on imports of American high-fructose corn syrup, which could affect corn refiners like ADM and food companies like Coca-Cola (NYSE:KO).

Deutsche Bank has asked for more time to reply to a request by House Democrats, who recently demanded any details the bank may have about President Trump's ties to Russia. Their request carries no subpoena power, however, because no Republican committee members have agreed to support it. The private accounts at Deutsche (NYSE:DB) are held by Trump and his family.

"My decision to retire this year has not been an easy one, but now is the right time for me to make this change personally and professionally," Perrigo (NASDAQ:PRGO) CEO John Hendrickson said in a statement. He became head of the company in April 2016, after former CEO Joe Papa surprised investors and the board by quitting to join Valeant Pharmaceuticals (NYSE:VRX).

In an announcement on Monday, President Trump endorsed a plan to privatize the U.S. air traffic control system. "The antiquated system we rely on today is inefficient and causes thousands of avoidable flight delays," said an American Airlines (NASDAQ:AAL) spokesperson. But opponents, including Delta (NYSE:DAL), say the system is so large that privatization would drive up ticket costs and could create a national security risk.

U.S. officials are concerned that explosives disguised as laptops could be directly detonated onboard an aircraft, United Airlines (NYSE:UAL) CEO Oscar Munoz said at IATA's annual meeting. Since there is little perceived risk of remotely detonating such a device, authorities believe there is less chance of them exploding in the hold of aircraft.

Federal Judge George Caram Steeh may tap longtime compensation adviser Kenneth Feinberg to oversee claims for nearly $1B that Takata (OTCPK:TKTDY) will pay out to defective air bag victims. Former FBI director Robert Mueller was originally nominated to oversee the funds, but he resigned from his law firm last month to head the DOJ's probe into Russian election interference.

Greenlight Capital's plan to split up General Motors's (NYSE:GM) stock, as well as challenging its board of directors, will come to a head today as shareholders vote on the hedge fund's proposals. The proxy contest comes during a major overhaul at the automaker as CEO Mary Barra seeks to jolt GM's lagging stock price by slashing costs and refocusing on the most profitable markets.

BlackBerry is playing down the loss of Toyota (NYSE:TM) as a customer of its vehicle-running QNX software, saying a faster-growing autonomous driving market is its focus. Toyota used QNX (NASDAQ:BBRY) in its vehicles for four years, but will start using software from the open-source collective Automotive Grade Linux, one of the first major automakers to do so, in the 2018 Camry.

Updated guidance on self-driving technology is expected to be released in the next few months, according to Transportation Secretary Elaine Chao, with policies focused on "new entrants and ideas that deliver safer vehicles." However, tech firms and carmakers need to be more forthcoming with information, she said, so that the government can make an informed decision and the public can trust regulators.

Today's Markets

In Asia, Japan -1%. Hong Kong +0.5%. China +0.4%. India -0.4%.
In Europe, at midday, London flat. Paris -0.5%. Frankfurt -0.8%.
Futures at 6:20, Dow -0.2%. S&P -0.2%. Nasdaq -0.1%. Crude -0.4% to $47.21. Gold +0.9% to $1294.50.
Ten-year Treasury Yield -3 bps to 2.15%

Today's Economic Calendar

8:30 Gallup US ECI
8:55 Redbook Chain Store Sales
10:00 Job Openings and Labor Turnover Survey