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France renews backing for Syrian rebels, denies troop moves

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France is offering renewed support to Syrian rebels fighting Islamic extremists — but is not preparing to send troops to help the rebels resist a Turkish military offensive.

French President Emmanuel Macron met Thursday with Syrian opposition forces in Paris. Afterward, a Kurdish leader at the meeting claimed that Macron had promised to send troops to Manbij near Syria’s border with Turkey.

The Kurdish-Arab town is under threat of a Turkish military operation that has already complicated the war in Syria. The Kurdish claim deeply angered Turkey — and raised fears that France was ready for a military conflict with Turkey, a fellow NATO member.

An official in Macron’s office denied any such plans, saying Friday that Macron only promised the Syrian rebels to “continue this fight together” against Islamic State extremists in the area.

The French official said the Turkish offensive in northern Syria “must stop,” saying it is threatening the broader U.S.-led military campaign against the Islamic State group.

The official said France is re-evaluating the needs in the fight against IS but hasn’t received any requests for reinforcements in the area.

France has led airstrikes on Syria as part of the coalition and is believed to have special forces in Syria.

Macron’s office wouldn’t comment on the different interpretations of what happened at his meeting with the Syrian Democratic Forces.

A member of the Council of Democratic Kurds in France, Agit Polat, told The Associated Press that Macron pledged at the meeting to send French forces to Manbij.

Turkey has threatened to march on Manbij and wrest it from Kurdish hands after its forces won a resounding victory over Kurdish fighters earlier this month and took control of Afrin, a town 60 miles (100 kilometers) to the west.

Ankara says Syrian Kurdish militiamen it views as “terrorists” and an extension of Kurdish insurgents inside Turkey, is in control of the town

Macron demanded the civilian population be given full access to humanitarian aid in Afrin during the Elysee meeting.

Macron also pledged French support in maintaining security in Turkey, and reiterated France’s opposition to the Kurdish rebel group, PKK.

Macron praised the SDF, saying it is courageously fighting the Islamic State group, and pledged it French support.

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Earnings reports, the Fed will test the market rally in the week ahead

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A Wall Street sign is seen near the New York Stock Exchange (NYSE) in New York City, May 4, 2021.

Brendan McDermid | Reuters

Investors will see whether stocks carry their newfound momentum into the week ahead, as major retailers, including Walmart and Home Depot, report earnings and housing data dominates the calendar.

The Federal Reserve may also play a role. Minutes from its last meeting will be released Wednesday, and after April’s hotter than expected consumer and producer inflation, market pros will watch it closely.

Central bank officials are also scheduled to make comments, including Fed Vice Chairman Richard Clarida who speaks next Monday.

Stocks have been volatile. The rally on Thursday and Friday was unable to reverse the week’s heavy losses. The defensive consumer staples, financials and materials were on track for a positive week among major sectors. The worst performers were consumer discretionary, off about 3.7% for the week, and tech, which was down 2.2%.

Technology shares were among the best performers in Friday’s rally, up about 2.1%. Energy was the best performer, up more than 3%.

“Watch it with a certain amount of trepidation,” said Art Hogan, chief market strategist at National Securities. “It’s not like the things that spooked us this week, like inflation, are going away…I think the fact we bounced at the end of the week is constructive.” He added that he still expects the market to move forward with fits and starts.

Fed Ahead

The Fed minutes should basically be a replay of the last central bank meeting. But that was held before April’s Consumer Price Index was reported to be up a sizzling 4.2% year over year.

That last meeting also took place prior to the April employment report that showed just 266,000 payrolls, a quarter of what was expected.

“I think the Fed is willing to look through these weird data points. They’re thinking that one data point is not a trend,” said Joseph Song, senior U.S. economist at Bank of America.

But the markets have been focused on whether any data helps clarify how soon the Fed may start to talk about winding down its bond buying. That would be a precursor to slowly ending the $120 billion a month asset purchase program, and also a signal that it is one step closer to raising interest rates.

Hogan said when the weak employment report was released, the market view shifted away from the idea that the Fed could discuss tapering its bond buying when it holds its Jackson Hole Economic Symposium in late summer.

But the market moved back to that view when the hot CPI report was released Wednesday.

“We saw hot CPI, hot PPI,” said Hogan, referring to the producer price index. “That tells us the Fed could be behind the curve.”

The Fed has said it expects a transitory spike inflation, but concerns it may not be a temporary spike rippled through the market. But Hogan said investors took some comfort from declines in iron ore and copper, down nearly 2% for the week.

Retail earnings and housing

Big retailers report quarterly earnings throughout the week. Walmart and Home Depot will report Tuesday. Target, TJX and Lowe’s release results Wednesday, and B.J.’s Wholesale and Kohl’s on Thursday.

Another disappointing data point was Friday’s April’s retail sales, which came in flat with March. But they are still at a high level. Hogan said based on the sales report, retailers should have done well.

“You’re likely to hear the usual suspects are outperforming. It used to be Walmart, Target, Home Depot, Lowe’s,” said Hogan. He said now others have joined the list, like TJX and Gap, and should do well.

Besides earnings, there is housing data. The National Association of Home Builders sentiment index will be released Monday, and housing starts are published Tuesday. Existing home sales will be issued on Friday.

Hogan said depending on the data, it may help the homebuilders which fell hard in the past week. He noted that D.R. Horton and Hovnanian were both down for the week.

“The home building index is off 5% for the week, even with it being up 1% [Friday]. This is a red-hot sector that has lots of implications,” he said. “What’s good for home sales is good for auto sales. It’s good for Home Depot and Lowe’s.”

Homebuilders were part of a broad swath of the market that was bouncing Friday.

Scott Redler, chief strategist at T3Live.com, said by the end of the week, some of the growth and tech names were trading better, like Facebook and Alphabet.

“The S&P 500 held the 50-day moving average, which is constructive,” he said.

The S&P 500 came within about a dozen points of its 50-day, which is the average price of the last 50 closes. It is often a level that acts as support, but if it is broken, it can signal a negative trend.

The S&P 500 was down about 1.5% for the week at 4,173.85. The Nasdaq ended the week at 13,429.98, down 2.3% on the week.

“The tech sector, which has been under pressure, held its yearly uptrend earlier in the week. Today it felt a little better than the rest of the week,” Redler said Friday. “It doesn’t mean you can go into everything, but you can tell traders are picking away at better acting stocks at these prices.”

Week ahead calendar

Monday

Earnings: Hostess Brands, Lordstown Motors, Tencent Music

8:30 a.m. Atlanta Fed President Raphael Bostic on CNBC

8:30 a.m. Empire manufacturing

10:00 a.m. NAHB index

10:25 a.m. Fed Vice Chairman Richard Clarida at Atlanta Fed conference

4:00 p.m. TIC data

6:00 p.m. Dallas Fed President Rob Kaplan

Tuesday

Earnings: Walmart, Home Depot, Macy’s, Baidu, Take-Two Interactive, Trip.com, NetEase

8:30 a.m. Housing starts

11:05 a.m. Dallas Fed President Rob Kaplan

Wednesday

Earnings: Target, Lowe’s, JD.Com, Cisco, Shoe Carnival, TJX, Eagle Materials, Analog Devices, L Brands

10:00 a.m. St. Louis Fed President James Bullard on economy and monetary policy

2:00 p.m. FOMC minutes

Thursday

Earnings: BJ’s Wholesale, Kohl’s, Petco, Ralph Lauren, Applied Materials, Ross Stores, Deckers Outdoor, Hormel Foods, Palo Alto Networks

8:30 a.m. Initial jobless claims

8:30a a.m. Philadelphia Fed

10:00 a.m. Leading indicators

10:00 a.m. St. Louis Fed’s Bullard

10:30 a.m. Dallas Fed’s Kaplan

Friday

Earnings: Deere, Foot Locker, Buckle, VF Corp, Booz Allen Hamilton

9:45 a.m. Markit Manufacturing PMI

9:45 a.m. Markit Services PMI

10:00 a.m. Existing home sales

12:15 p.m. Dallas Fed’s Kaplan, Atlanta Fed’s Bostic, and Richmond Fed President Thomas Barkin on a panel

1:30 p.m. San Francisco Fed President Mary Daly

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Boris Johnson says variant from India more transmissible

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British Prime Minister Boris Johnson speaks during a televised press conference at 10 Downing Street on February 22, 2021 in London, England.

Leon Neal | Getty Images News | Getty Images

LONDON — U.K. Prime Minister Boris Johnson warned Friday that the coronavirus variant first discovered in India has the potential to derail the lockdown easing currently underway in the country.

The U.K. will now accelerate second doses of vaccines for the over-50s and the clinically vulnerable due to concerns over the variant from India.

Speaking at a press conference Friday, Johnson said the variant looked to be more transmissible than other variants, but cautioned that it wasn’t clear by how much. England’s Chief Medical Officer Chris Whitty, speaking alongside Johnson, added that there’s “confidence” it’s “more transmissible” than the strains already circulating in the country.

Whitty said: “Earlier this week we said that we thought that it was as transmissible as B.1.1.7 and possibly even more so. There is now confidence … that this variant is more transmissible than B.1.1.7.”

The B.1.1.7 variant, known as the U.K. or Kent strain, has an unusually high number of mutations and is associated with a more efficient and rapid transmission of the coronavirus. British scientists first detected this mutation in September last year and by April it had become the dominant strain in the U.S.

Johnson added that there was currently no evidence that the variant would evade the vaccines that are being deployed across the country.

“But I have to level with you, this new variant could pose a serious disruption to our progress,” Johnson said.

“And I must stress that we will do whatever it takes to keep the public safe.”

Data on the new variant published Thursday by Public Health England showed that the number of cases across the U.K. had risen from 520 last week to 1,313 this week, with most cases concentrated in northwest England and a few clusters in London.

The U.K.’s vaccine rollout has been one of the fastest in the world, with almost 70% of the adult population having received at least one shot. Vaccines are available to anyone over age 38, but the government has said they could be made available to younger people living in multigenerational households.

The next phase of England’s exit from lockdown is scheduled for Monday, when indoor socializing, hospitality and entertainment will resume.

—CNBC’s Elliot Smith contributed to this article.

This is a breaking news story, please check back later for more.

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COP26 president says ‘coal must go’ if planet to meet climate targets

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Justin Merriman | Bloomberg Creative Photos | Getty Images

This year’s COP26 climate change conference must consign coal to the past, according to the U.K. lawmaker who will lead formal negotiations at the summit.

In a wide-ranging speech delivered on Friday, COP26 President-designate Alok Sharma sought to emphasize the importance of ending international coal financing, an ambition he described as “a personal priority.”

“We are urging countries to abandon coal power, seeking the G-7 to lead the way,” he said. “At the same time, we are working with developing countries to support their transition to clean energy.”

“The days of coal providing the cheapest form of power are in the past, and in the past they must remain,” he went on to state.

Sharma said the science was clear that “coal must go” in order to keep the goal of limiting global warming to 1.5 degrees Celsius.

The above target was laid out in the Paris Agreement on climate change, which was agreed at 2015’s COP21 summit in the French capital.

Described by the United Nations as a legally-binding international treaty on climate change, the accord aims to “limit global warming to well below 2, preferably to 1.5 degrees Celsius, compared to pre-industrial levels.”

The COP26 summit is set to be hosted by the U.K. and held in the Scottish city of Glasgow between Nov. 1 and 12, 2021. It was originally due to take place in Nov. 2020, but was rescheduled because of the coronavirus pandemic.

The U.K.’s official website for COP26 states it will “bring parties together to accelerate action towards the goals of the Paris Agreement and the UN Framework Convention on Climate Change.”

In his remarks on Friday, Sharma went on to state: “The reality is, renewables are cheaper than coal across the majority of countries. The coal business is, as the UN Secretary General has said, going up in smoke. It’s old technology.”

“So let’s make COP26 the moment we leave it in the past where it belongs, whilst of course supporting workers and communities to make the transition, by creating good green jobs to fill the gap.”

While some will view Sharma’s ambition as laudable, coal still supplies more than one-third of the planet’s electricity generation, according to the International Energy Agency.

According to analysis from the IEA, worldwide coal consumption dropped by 4% in 2020, but this fall “was concentrated mostly in the early months of the year.”

“By the end of 2020, demand had surged above pre-Covid levels, driven by Asia where economies were fast rebounding and December was particularly cold,” the IEA adds.

In the U.S., coal still plays a significant role in electricity production. Preliminary figures from the U.S. Energy Information Administration show that natural gas and coal’s shares of utility-scale electricity generation in 2020 were 40.3% and 19.3% respectively.

Sharma’s comments come at a time when plans for a new coal mine in Cumbria, a county in the northwest of England, have proved to be extremely controversial in some quarters.

The proposed development has generated a great deal of debate, not least because the U.K. will host COP26 in November. The project’s fate is still to be determined. 

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