Government borrowing costs are continuing to grind upwards. The 10-year Treasury yield has broken through 3.1% - its highest level since July 2011 - as higher oil prices pointed to increased inflation following yesterday's upbeat U.S. retail sales numbers. Economic figures today - like jobless claims - could boost yields further as market players become even more confident about upcoming Fed rate hikes.

Economy

The European Union must protect EU companies doing business with Iran, French President Emmanuel Macron declared, as firms begin to pull out of the country. Total (NYSE:TOT) has halted work on an Iranian natural-gas project and warned it may have to abandon its plan to invest $1B in the field. Maersk Tankers (OTCPK:AMKAF), Torm (OTC:TRMSF) and Wintershall have also stopped their dealings with the Islamic Republic.

German Chancellor Angela Merkel has signaled that the EU is willing to discuss reducing trade tariffs with the U.S. as she arrived at a summit of bloc leaders in Sofia, Bulgaria. "We have a common position. We want a permanent exemption and then we are ready to talk how we can reciprocally reduce the barriers to trade." The U.S. tariffs are set to go into effect on June 1.

Japan - the only major U.S. ally that did not receive exemptions from President Trump's steel and aluminum tariff decision - is meanwhile considering slapping retaliatory tariffs on U.S. exports worth $409M. According to public broadcaster NHK, the government is preparing to notify the World Trade Organization of the plan, a necessary procedure under global trade rules.

The U.S. and its Gulf partners have imposed additional sanctions on Lebanon's Hezbollah leadership, marking the third round of sanctions announced by Washington since pulling out of the Iran nuclear deal last week. The measures were imposed jointly by the U.S. and members of the Terrorist Financing and Targeting Center, which includes Saudi Arabia, Bahrain, Kuwait, Oman, Qatar and the UAE.

New York state would gain $435.7M annually in tax revenue for legalized weed, while New York City would get about $336M, according to NYC Comptroller Scott Stringer. "This is a new revenue stream... This is going to impact the kinds of resources we'll have to invest in education, to invest in healthcare." Currently, legislation to legalize marijuana use throughout New York is pending in Albany.

Stocks

Chinese regulatory authorities have approved the $18B sale of Toshiba's (OTCPK:TOSYY) chip unit to a consortium led by U.S. private equity firm Bain Capital, Japanese public broadcaster NHK reports. The antitrust review had been the biggest and last hurdle to the sale of the prized asset, fueling speculation that Toshiba might abandon the deal or pursue alternative plans such an IPO.

Following several months of delays, YouTube Music (GOOG, GOOGL) will relaunch its subscription service on May 22, which will be available as an ad-supported model, as well as an ad-free model for $9.99 per month. While YouTube Music will eventually replace Google Play Music and the music component of YouTube Red, the latter paid service will continue as YouTube Premium, for $12 per month.

VP of Alexa Jim Freeman is the latest to depart from Amazon (NASDAQ:AMZN), adding to the the string of a dozen executives and senior managers that have left the company over the past 10 months. While higher-ups had asked him to stay, he was finally poached by German e-commerce company Zalando (OTCPK:ZLNDY). Freeman had a lot of support internally, having previously run Prime Video and Amazon Studios.

Powerful earnings from Tencent sent its market value surging by as much as $34B overnight, with shares up 7.1% in Hong Kong, helping the Chinese tech giant briefly reclaim the crown of Asia's most valuable listed company. The results were driven by the strong performance in Tencent's (OTCPK:TCEHY) mobile gaming business, as well as gains from its sprawling investment operations.

News on HQ2... Amazon (AMZN) has visited all 20 finalists for its new headquarters, according to NBC News, but the report didn't say if the retail giant created a shortlist. The areas include: Atlanta, Austin, Boston, Chicago, Columbus, Dallas, Denver, Indianapolis, Los Angeles, Miami, Montgomery County (Maryland), Nashville, Newark, New York City, Northern Virginia, Philadelphia, Pittsburgh, Raleigh, Toronto, and Washington D.C.

A Delaware judge has punted a decision to this morning in the escalating feud between the board of CBS and its controlling shareholder National Amusements, owned by the Redstone family, which wants to merge it with Viacom (NYSE:VIA). The decision will come as the CBS board meets today to weigh a dilutive move that would reduce the voting power of National Amusements.

Twenty-First Century Fox has set its leadership for "New Fox" - the company that will remain if and when Disney (NYSE:DIS) completes its deal to acquire the company's media assets. Current Executive Chairman Lachlan Murdoch will be Chairman and CEO at New Fox, and Rupert Murdoch will serve as co-chairman, while Fox (NASDAQ:FOXA) CFO John Nallen will take a broader role as chief operating officer.

The Democratic Republic of Congo's new Ebola outbreak has entered a "new phase," according to the country's health minister, as the virus was detected in Mbandaka, a city with a population of about 1M people. It comes as the first batch of 4,000 experimental Ebola vaccines - developed by Merck (NYSE:MRK) and sent from Europe by the World Health Organization - arrived in Congo's capital Kinshasa.

The Williams twins... While it already owns about 74% of the company, pipeline operator Williams (NYSE:WMB) is buying all the outstanding shares of its master limited partnership William Partners (NYSE:WPZ) for $10.5B. The offer represents a premium of 6.4% based on Wednesday’s closing price, and will simplify the corporate structure of the gas pipeline and infrastructure group. WMB +3% premarket.

Intel's $15.3B deal for Mobileye is bearing big fruit. The company has signed a contract to supply 8M cars at a European automaker with its advanced self-driving systems. The deal will begin in 2021, when Intel's (NASDAQ:INTC) EyeQ5 chip, which is designed for fully autonomous driving, is launched as an upgrade to the EyeQ4 that will be rolled out in the coming weeks.

Volkswagen's core car brand will skip the Paris Motor Show this year, becoming the latest and most prominent automaker to ditch the biennial industry gathering. Since Dieselgate erupted in 2015, VW (OTCPK:VLKAY) has pulled back from traditional car shows, including Detroit and Frankfurt, partly as a cost-cutting measure but also mirroring a sector trend toward presenting auto tech at CES and the Mobile World Congress.

The Marine Corps has taken delivery of its first CH-53K King Stallion, the most powerful helicopter ever fielded by the U.S. In development since 2006, the aircraft will replace the nearly 40-year-old CH-53E Super Stallion fleet, carrying triple the weight of its predecessor at a colossal 27,000 pounds. It's the first delivery of an expected 200 helicopters from Sikorsky, a unit of Lockheed Martin (NYSE:LMT).

The SEC is getting creative with its crypto crackdown approach. Warning investors about the dangers of initial coin offerings for some time now, the agency has created a website, HoweyCoins.com, that mimics a bogus ICO as a way to alert potential investors on the signs of fraud. It's complete with a fake eight-page whitepaper, false celebrity endorsements and a bogus team working on the ICO.

Wednesday's Key Earnings

Cisco (NASDAQ:CSCO) -3.6% AH amid worries over its transition.
Macy's (NYSE:M) +10.8% lifting profit guidance.

Today's Markets

In Asia, Japan +0.5%. Hong Kong -0.5%. China -0.5%. India -0.7%.
In Europe, at midday, London +0.2%. Paris +0.4%. Frankfurt +0.2%.
Futures at 6:20, Dow -0.1%. S&P -0.2%. Nasdaq -0.4%. Crude +0.9% to $72.11. Gold -0.3% to $1287.80. Bitcoin -0.3% to $8312.
Ten-year Treasury Yield +2 bps to 3.11%

Today's Economic Calendar
8:30 Initial Jobless Claims
8:30 Philly Fed Business Outlook
9:45 Bloomberg Consumer Comfort Index
10:00 E-Commerce Retail Sales
10:00 Leading Indicators
10:30 EIA Natural Gas Inventory
4:30 PM Money Supply
4:30 PM Fed Balance Sheet