2025-07-31 17:51

Microsoft shares jump after results Shares rebound 50% from April lows AI advancements boost stock post-ChatGPT launch July 31 (Reuters) - Microsoft (MSFT.O) , opens new tab hit $4 trillion in stock market value on Thursday, becoming the second publicly traded company after Nvidia (NVDA.O) , opens new tab to surpass that milestone following a blockbuster earnings report that showed its massive bets on AI are paying off. Strong results from Microsoft and Meta Platforms (META.O) , opens new tab late on Thursday also fueled gains in Amazon (AMZN.O) , opens new tab and sent chipmaker Nvidia (NVDA.O) , opens new tab to a record high, with the four heavyweight AI players gaining over half a trillion dollars in market value. Sign up here. Wall Street's heavyweight players leading in AI - Nvidia, Microsoft, Amazon, Alphabet (GOOGL.O) , opens new tab and Meta Platforms - now account for a quarter of the S&P 500, according to LSEG data. Microsoft forecast a record $30 billion in capital spending for the first quarter of the current fiscal year to meet soaring AI demand. It reported booming sales in its Azure cloud computing business and said its Copilot AI tools had surpassed 100 million monthly active users. Microsoft's shares were last up 4.5% after climbing as much as 8%. "It is in the process of becoming more of a cloud infrastructure business and a leader in enterprise AI, doing so very profitably and cash generatively despite the heavy AI capital expenditures," said Gerrit Smit, lead portfolio manager, Stonehage Fleming Global Best Ideas Equity Fund. Meta Platforms also doubled down on its AI ambitions, forecasting quarterly revenue that blew past Wall Street estimates as artificial intelligence supercharged its core advertising business. Redmond, Washington-headquartered Microsoft first reached a $1 trillion stock market value in 2019. Its move to $3 trillion was more measured than Nvidia (NVDA.O) , opens new tab and Apple's (AAPL.O) , opens new tab, with AI-bellwether Nvidia tripling its value in just about a year and clinching the $4 trillion milestone on July 9. Apple was last valued at $3.12 trillion. Lately, breakthroughs in trade talks between the United States and its trading partners ahead of President Donald Trump's August 1 tariff deadline have buoyed stocks, propelling the S&P 500 and the Nasdaq to record highs. Microsoft's multibillion-dollar bet on OpenAI is proving to be a game changer, powering its Office Suite and Azure offerings with cutting-edge AI and fueling the stock to more than double its value since ChatGPT's late-2022 debut. Its capital expenditure forecast, its largest ever for a single quarter, has put it on track to potentially outspend its rivals over the next year. Meta upped the lower end of its annual capital spending by $2 billion - just days after Alphabet made a similar move - signaling that Silicon Valley's race to dominate AI technology is accelerating. Cloud computing heavyweight Amazon.com (AMZN.O) , opens new tab rose 2% ahead of its quarterly report after the bell. AI chip supplier Nvidia climbed 0.8%, lifting its market capitalization to a record $4.4 trillion. https://www.reuters.com/business/retail-consumer/microsoft-reaches-4-trillion-valuation-after-solid-results-2025-07-31/

2025-07-31 16:25

Executives confident of meeting earnings targets Model of buying and selling companies has been challenged Co-CEO says business better than commentary suggests NEW YORK, July 31 (Reuters) - KKR (KKR.N) , opens new tab executives said strong momentum in their business gave them confidence on Thursday of beating earnings targets for 2026, after the investment group reported higher second quarter profit bolstered by an increase in fee-related earnings. The New York-based firm and its peers have seen the traditional private equity model of buying and selling companies face headwinds as high interest rates hampered divestments, and this year President Donald Trump's trade war froze some deals. Sign up here. But investors have expressed more optimism in recent weeks and market activity has picked up, including a handful of initial public offerings. KKR and its peers are also branching out into different asset classes including credit and asset-backed finance. "Our team remains very excited around the business momentum we are seeing across the firm," KKR Chief Financial Officer Rob Lewin said. "As you look at 2026, as a management team, we look at that portfolio, we look at our $350 million of operating earnings guidance for next year, and we feel really good in our ability to beat that." Last week, the world's biggest alternative asset manager Blackstone (BX.N) , opens new tab said it expects a revival in deals and IPOs. KKR on Thursday reported 9% growth in adjusted net income to $1.1 billion, or $1.18 per adjusted share, ahead of an LSEG SmartEstimate of $1.13 per share. It said the earnings were supported by growing management fees and its capital markets business. Its shares retreated to trade 1.4% lower in morning trading, while the S&P 500 benchmark index (.SPX) , opens new tab was up 0.5%. Some of the share price reaction could be due to the fact the stock is relatively expensive, analysts said. "KKR's shares are slightly to modestly overvalued relative to our current and revised fair value estimate," said Greggory Warren, an analyst at Morningstar. VOLATILITY Market volatility was high in the quarter, stemming from Trump's pledges to impose tariffs on trading partners around the world. Fee-related income, however, can provide money managers with stable earnings when markets are turbulent. Large firms like KKR also benefit from having diversified portfolios. Co-Chief Executive Scott Nuttall said volatility creates investment opportunities. He added that 80% of earnings came from recurring revenue streams. "The commentary makes it sounds like business is very difficult, the results and our experience speak otherwise," Nuttall said. KKR's assets under management now total $686 billion, a 14% annual increase. It raised $28 billion in new capital, less than the $30.5 billion it had hauled in during the first quarter. KKR made a raft of announcements in the days before the earnings. It acquired HealthCare Royalty Partners, which buys rights to the royalties flowing from pharmaceutical companies' drug sales, and announced an investment of almost $4 billion in a data center development in Texas with Energy Capital Partners. KKR also teamed up with Capital Group to seek SEC approval for a fund that blends public and private equity, looking to capitalize on rising demand from wealthy retail investors. Separately, KKR said it had raised $6.5 billion to invest in asset-backed finance. It said this fund will focus on opportunities to buy debt similar to the deal it and PIMCO struck with motorcycle maker Harley Davidson (HOG.N) , opens new tab. https://www.reuters.com/business/kkr-says-current-momentum-leaves-it-confident-beating-2026-targets-2025-07-31/

2025-07-31 15:00

Central bank wants lower inflation target Finance minister yet to give formal approval Bank forges ahead anyway with latest announcement PRETORIA, July 31 (Reuters) - South Africa's central bank said on Thursday it would now aim for 3% inflation, not 4.5%, despite the finance minister not yet signing off on a formal target change, as it lowered its main lending rate again. South African Reserve Bank Governor Lesetja Kganyago has been pushing for a lower target for years, saying the current 3%-6% target band is too wide and erodes the competitiveness of Africa's biggest economy. Sign up here. Finance Minister Enoch Godongwana has been more reluctant to change the target, and the decision ultimately rests with him. He said earlier this month that discussions between the National Treasury and SARB on the target should not be rushed. Asked whether the SARB had discussed its new preference for 3% inflation with Godongwana before Thursday's announcement, Kganyago said the Monetary Policy Committee does not discuss its policy decisions with anyone ahead of time. "We had to make a judgment as a committee to say ... we can lock in these gains and make sure that South Africans benefit from them," he told a press conference. "Changing policy is never easy. There is no such thing as a costless policy. What you can't do is to refuse to make a decision, because there are costs to a policy. There are costs in sticking to the existing target as well." In a written response to Reuters' questions about the SARB's decision, Finance Minister Godongwana said the Treasury would not discuss its interactions with the central bank through the media. "If there is going to be any comment on this matter, it will be through our normal meetings and then during the Medium Term Budget Policy Statement (MTBPS), as I have previously stated," he said. South African government bonds, including the 2035 maturity , strengthened on the SARB's commitment to lowering inflation. "De facto South Africa now has a 3.0% preferred level of inflation, and monetary policy will now work towards its achievement. This is a significant macroeconomic positive," said Razia Khan, chief economist for Africa and Middle East at Standard Chartered. Thursday's rate cut, by 25 basis points to 7.00% (ZAREPO=ECI) , opens new tab, was in line with the median forecast of a Reuters poll of economists. The MPC was unanimous in its decision. Headline inflation (ZACPIY=ECI) , opens new tab rose to 3.0% year on year in June from 2.8% in May after being below the target range for three months running. https://www.reuters.com/world/africa/south-african-central-bank-lowers-inflation-goal-without-ministers-sign-off-2025-07-31/

2025-07-31 14:30

Businesses shipped more goods to US ahead of tariffs Companies are holding about 4 months of inventory Big stockpiles have helped delay price hikes Price hikes may be felt beyond U.S. LONDON, July 31 (Reuters) - Tariff-related price hikes may start to bite at the end of the third quarter as companies may by then have sold off U.S. stockpiles built up ahead of the new duties, according to the International Chamber of Commerce. Businesses making everything from cars to drugs and cheese and wine have expedited deliveries to the United States this year to get ahead of U.S. President Donald Trump's tariffs. Sign up here. They have about four months of inventory, about one month more than average, Andrew Wilson, International Chamber of Commerce deputy secretary general, estimated on Thursday, helping some delay hiking prices. "You could expect it to bite at the end of Q3," he told Reuters once they have sold off that inventory. Wilson previously forecast tariff-related price hikes would show up in U.S. inflation in the fourth quarter or early next year. Data on Thursday showed U.S. inflation increased in June as tariffs started raising the cost of some goods, supporting economists' expectations that price pressures would pick up in the second half. Some of the world's biggest companies have warned for months that they would be squeezed by duties. They have now started to outline how they plan to pass on the costs and change their businesses to try to cushion the blow of rising costs, uncertainty over U.S. trade policy, and waning consumer confidence. Companies are testing how much they can pass tariffs onto U.S. customers. But global retailers including sandal maker Birkenstock (BIRK.N) , opens new tab and jeweller Pandora (PNDORA.CO) , opens new tab have also looked at raising prices across multiple markets to avoid hurting U.S. sales. "There's a logic taking hold that (price hikes) won't be just borne by the U.S. consumer," he said. https://www.reuters.com/world/china/price-hikes-may-soon-bite-firms-sell-off-pre-tariff-inventory-says-global-2025-07-31/

2025-07-31 13:41

Economy shrinks 0.1% in May, likely expanded 0.1% in June May GDP falls due to output drop in retail trade, mining Q2 GDP likely to be 0.1% on an annualized basis, StatsCan says But Bank of Canada sees GDP contracting annualized 1.5% in Q2 OTTAWA, July 31 (Reuters) - Canada's Gross Domestic Product shrank 0.1% in May on a monthly basis as expected but is likely to regain the lost ground in June as some sectors rebound, data showed on Thursday. An advanced estimate showed GDP is likely to have expanded by 0.1% in June, and on an annualized basis it could also post growth of 0.1% for the second quarter, Statistics Canada said. Sign up here. That is in contrast to the more widely held expectation for a second-quarter contraction, and could change when the final June numbers are released next month. In May, the biggest hit to growth came from the retail trade sector which contracted 1.2%, StatsCan said, adding that activity across seven subsectors out of 12 shrank. Retail trade is part of the larger services-producing industries that contribute up to 75% of total GDP. Overall, output from the services-producing group was flat in May as the drop in retail trade was offset by real estate and transportation. Amongst goods-producing industries, which account for 25% of GDP, the mining, quarrying, and oil and gas extraction sector was the main laggard with activity shrinking 1% in the month. Manufacturing expanded 0.7% on a monthly basis, after a 1.8% decline in April, largely as a result of higher inventory accumulation, the statistics agency said. Canada's first quarter GDP expanded 2.2% on an annualized basis as exporters advanced their sales to the United States to beat a barrage of incoming tariffs. But as tariffs took effect from March, exports and industrial output took a hit. The Bank of Canada, after announcing that it would keep rates on hold at 2.75% on Wednesday, said that it expected the economy to contract by 1.5% in the second quarter due to a 25% drop in exports. StatsCan's forecast of even slim Q2 growth could take away the incentive for a rate cut in September, though data on inflation and job growth before the BoC's next meeting will be crucial. Economists expressed doubt on a prospective growth in the second quarter as the data is calculated based on expenditure and income of people, unlike monthly GDP which is based on industry output. "We will need to wait and see next month's quarterly GDP release to know whether the economy is really outperforming the Bank's expectations," Andrew Grantham, senior economist at CIBC Capital Markets wrote in a note. Royce Mendes, head of macro strategy for Desjardins Group noted that there was lingering uncertainty about trade policy and domestic headwinds, which will continue to weigh on activity, forcing the central bank to restart cutting rates by September. Money markets are betting around an 89% chance of the BoC holding rates on September 17, up three percentage points from before the GDP data was released . The Canadian dollar dropped 0.11% to 1.3842 to the U.S. dollar, or 72.24 U.S. cents. The U.S. and Canada are currently locked in negotiations to hash out a trade deal by Friday in a bid to reduce tariffs, but negotiators have admitted that it may not happen by the deadline. https://www.reuters.com/world/americas/canadas-gdp-shrinks-may-could-avoid-contraction-second-quarter-2025-07-31/

2025-07-31 13:15

LONDON, July 31 (Reuters) - A British government agency is providing a 1 billion pound export development guarantee to the UK arm of U.S. carmaker Ford (F.N) , opens new tab, supporting the company's long-term growth targets around the world. "This £1 billion loan guarantee is a major boost for Britain’s auto sector. It will help develop world-leading products, open new export markets, and secure jobs," finance minister Rachel Reeves said in the statement released by UK Export Finance (UKEF). Sign up here. https://www.reuters.com/business/autos-transportation/uk-export-finance-guarantees-1-billion-pound-loan-ford-uk-2025-07-31/