2025-07-24 10:08
LONDON, July 24 (Reuters) - Britain's manufacturing sector seems to have stabilised after a downturn but the outlook remains fragile with factories holding back on investment and cutting jobs again, according to a survey published by the Confederation of British Industry. As well as weaker demand, manufacturers were facing tough price pressures, the survey published on Thursday showed. Sign up here. "Conditions in UK manufacturing remain challenging, with many firms reporting subdued and unpredictable demand," Ben Jones, lead economist at the CBI, said. "High input costs, labour shortages and global supply chain disruptions are continuing to put pressure on margins and capacity," Jones said. The survey showed a drop in optimism among manufacturers with little sign of a recovery in investment plans. Companies were facing uncertainty about future demand, inadequate returns and persistent labour shortages, the CBI said. A measure of employment in the next three months remained negative albeit less so than in April. The monthly balance for manufacturing new orders improved to -30 in July from June's -33, taking them back to May's reading. The monthly reading also showed a pick-up in average prices that manufacturers expect to charge over the next three months to +21 from +19 in June. https://www.reuters.com/world/uk/uk-factory-slowdown-eases-companies-remain-wary-cbi-survey-shows-2025-07-24/
2025-07-24 10:08
Opendoor Technologies, Kohl's among stocks with huge moves Crypto, crypto-linked shares also showing signs of speculation Some options measures not at highs seen at past periods of trading frenzy NEW YORK, July 24 (Reuters) - Massive moves in stocks such as Kohl’s and Opendoor Technologies are raising questions over whether a new wave of meme stock trading is underway and what that signals about risk appetite more broadly. Benchmark equity indexes have touched record highs, cryptocurrencies are rallying, and options trading volumes have jumped, highlighting renewed signs of speculative fervor across asset classes. Sign up here. Much of the risk-taking behavior is being driven by retail market participants, investors said, with larger institutional players taking a more circumspect view. "It seems like the story, at least in the equity market, is everything is kind of risk on," Garrett DeSimone, head of quantitative research at OptionMetrics, said. "It has gotten a bit frothy in that sense." So-called meme stocks - stocks that surge in price due to social media hype rather than company fundamentals - are at the forefront of this frothy market behavior. Krispy Kreme(DNUT.O) , opens new tab and GoPro (GPRO.O) , opens new tab were among the companies riding the latest meme stock rally on Wednesday as retail traders latched on to the highly shorted names, a day after piling into the shares of department store company Kohl's. The Goldman Sachs Most Shorted Rolling Index (.GSCBMSAL) , opens new tab, an equal-weighted basket of the 50 highest short-interest names in the Russell 3000 Index, is up 13% this month, compared to a nearly 2% gain for the Russell 3000 (.RUA) , opens new tab in that time, and is up over 60% since the low for the year in April. "Retail has helped fuel the squeeze," Marco Iachini, senior vice president of research at Vanda, said. Retail interest was particularly on display in the options market with several retail favorite options names, including Krispy Kreme and Kohl’s, drawing massive trading volume. "They also have a huge amount of mentions across retail boards and Reddit. So they've definitely attracted some attention, you know, not based on fundamentals, which I guess defines a meme stock," OptionMetrics' DeSimone said. Trading in short-dated contracts has also surged, signaling higher appetite for risk-taking, options data showed. Still, various options market gauges, including put-to-call ratios and stock correlation measures, point to frothiness but are not at highs seen at the peak of past periods of speculative frenzy. "There is not the signal yet that things are so overbought that this needs to stop ... to me it still feels early stage," said Brent Kochuba, founder of options analytic service SpotGamma. Speculative fever is on display also in cryptocurrencies and crypto-related stocks and exchange-traded funds. Bitcoin, the world's largest cryptocurrency, recently hit a record high of $123,153, while several crypto-focused stocks, including crypto exchange Coinbase Global (COIN.O) , opens new tab and bitcoin stockpiler Strategy, formerly known as MicroStrategy (MSTR.O) , opens new tab, have soared. "Confidence among retail traders is notably higher, fueled in part by recent gains in crypto markets," Mark Hackett, chief market strategist at Nationwide, said in a note. Irene Tunkel, chief U.S. equity strategist at BCA Research, said although retail investors appeared to be over-exuberant, the market as a whole did not. "You look at institutional investor sentiment, it's not really overextended," Tunkel said. "So I think it's just one group, which is retail investors, that got overly excited and the froth is there." Despite the S&P 500 making new highs, equity positioning is far below February levels as investors remain underweight stocks, according to Deutsche Bank estimates. The S&P 500 (.SPX) , opens new tab as of Tuesday traded at 22.5 times its expected 12-month earnings - its highest level this year - and has been above a forward price-to-earnings ratio of 22 for nearly the past month, according to LSEG Datastream. That is a valuation level the index has reached only about 7% of the time over the past 40 years, and is well above its long-term average of 15.8. Investors say valuations are not always useful for determining the market's near-term direction. But the fact that equity valuations are elevated could make stocks more vulnerable to any disappointing shocks in the coming weeks. "For me, it's more when positioning gets really crowded. So right now, we're seeing these bouts of meme stock trading, but I'm not seeing it really affect the overall market," Vanda's Iachini said. https://www.reuters.com/business/meme-stock-surge-underlines-market-froth-mostly-centred-retail-investors-2025-07-24/
2025-07-24 09:45
July 24 (Reuters) - Sterling was set to snap a three-day winning streak against the dollar on Thursday, pressured by concerns over the UK economy and potential tax hikes. Progress in U.S. trade talks with key partners eased investor worries about a global trade war, sparking a rally in risk assets and lifting the pound earlier this week. Sign up here. However, UK PMI data showed that business activity grew only weakly in July and employers cut jobs at the fastest pace in five months, according to a survey. Such figures are likely to add to speculation about a Bank of England interest rate cut next month. Markets are currently pricing an 80% chance of a rate cut in August and two easing moves by year-end. The pound dropped 0.28% to $1.3544 , after hitting a fresh two-week high early in the session at $1.3588. The dollar edged up versus the euro and the yen after progress in trade negotiations. Sterling weakened against the single currency, which was down 0.16% at 86.81 pence. . The euro hit 86.98 pence last week, its highest level since April 11. The rate differential between the UK and the euro area has been affecting the cross. Markets are pricing in a European Central Bank terminal rate of 1.75%, down from the current 2%, while expecting the Bank of England to cut rates by 85 basis points by the end of next year. “Fears over strained public finances, the growing likelihood of more tax bumps and its implications for the UK economy are weighing on the pound against the euro,” said Matthew Ryan, head of market strategy at global financial services firm Ebury, after mentioning June data on government borrowing released on Tuesday. Britain’s government borrowed £20.68 billion ($27.86 billion) in June. A Reuters poll forecast had pegged public sector net borrowing at a median of £16.5 billion. https://www.reuters.com/world/uk/sterling-poised-end-3-day-rally-vs-dollar-economic-tax-concerns-2025-07-24/
2025-07-24 09:21
KUALA LUMPUR, July 24 (Reuters) - Malaysia is aiming for the lowest possible tariff on goods exported to the United States, its trade minister said on Thursday, denying reports that it is targeting a rate of 20%. Malaysia is facing a 25% tariff on its goods unless it can reach a deal with Washington by August 1. Sign up here. Fellow Southeast Asian countries Vietnam, the Philippines and Indonesia have each reached their own agreements, with the Trump administration placing a 20% tariff on Vietnamese exports, and 19% on Philippine and Indonesian goods entering the United States. Malaysia's Investment, Trade and Industry Minister Tengku Zafrul Aziz said several sticking points remained in the U.S. talks, particularly on non-trade barriers, but discussions were progressing well and on track to meet the August deadline. "On balance, I think we can get to a number which we feel is fair for both parties," he told a press conference. Bloomberg reported on Tuesday, citing people familiar with the matter, that Malaysia was seeking a tariff of about 20%, which Tengku Zafrul denied. "As low as possible... the target of 20% is not the target, the target is lower than that," he said. He said there were certain concessions Malaysia was unable to make as they may be detrimental to local industries, but the country was considering every demand that would help it complete the negotiations. He did not elaborate on what the concessions would be. Tengku Zafrul has previously said Malaysia was unwilling to cross certain "red lines" in the talks, referring to U.S. demands that he said encroached on domestic interests and national sovereignty. https://www.reuters.com/world/asia-pacific/malaysia-targeting-lowest-possible-tariff-rate-us-talks-trade-minister-says-2025-07-24/
2025-07-24 07:45
BASRA, July 24 (Reuters) - PowerChina has won a contract worth around a $4 billion to build a large-scale seawater desalination plant in Iraq's southern city of Basra, in partnership with an Iraqi company, officials said on Thursday. Sign up here. https://www.reuters.com/sustainability/land-use-biodiversity/powerchina-wins-contract-worth-around-4-billion-iraq-build-water-desalination-2025-07-24/
2025-07-24 07:41
MUMBAI, July 24 (Reuters) - The Indian rupee's recent fall looks overdone to analysts at Barclays while their counterparts at BofA Global Research reckon that portfolio flows and a weak outlook for the dollar may help the rupee rise over the remainder of the year. Both hedge funds and real money investors added long positions on the rupee last month, per BofA's proprietary flow indicators. The firm expects the rupee to strengthen to 84 per U.S. dollar by the final quarter of calendar year 2025. Sign up here. Barclays, meanwhile, argues the rupee's decline over recent months is "reaching limits over the short term," and recommends fading any weakness around 86.50-87.00 levels. Although the firm sees a near-term limit to the rupee's decline, it has maintained its view towards INR depreciation in the months ahead. The rupee is on course to log its third consecutive monthly decline in July and has fallen about 2% from a 6-month peak of 84.58 hit in early-May. On the day, the currency was up 0.1% at 86.33 as of 12:15 P.M. IST. While a rise in Asian peers helped the rupee strengthen, dollar bids from at least two large foreign banks, likely on behalf of custodial clients, limited the gains, a trader at a mid-sized private bank said. Analysts at both Barclays and BofA Global Research also pointed out that the rupee's valuation in terms of both the nominal and real effective exchange rates has declined. "Given its recent FX competitiveness improvement there is less need for a further near term drop in the currency," Barclays analysts wrote in the Thursday note. Data released by the Reserve Bank of India after market-hours on Wednesday showed the rupee's 40-currency real effective exchange rate (REER) declined to 100.36, the lowest since May 2023. A REER above 100 indicates overvaluation of a currency while a sub-100 reading indicates undervaluation. https://www.reuters.com/world/india/barclays-says-rupee-fall-overdone-bofa-global-research-stays-bullish-2025-07-24/
