2025-05-16 11:21

TSX ends up 0.3% at 25,971.93 Eclipses Thursday's record high MEG Energy biggest gainer after takeover bid Investors remain cautious May 16 (Reuters) - Canada's main stock index hit a record high on Friday, closing firmer for a sixth consecutive week, as worries about a global trade war eased after the U.S.-China tariff truce over the weekend. The Toronto Stock Exchange's S&P/TSX composite index (.GSPTSE) , opens new tab closed up 74.45 points, or 0.29%, at 25,971.93. The index touched 25,992.89 on Friday, topping Thursday's record high. Sign up here. For the week, the index gained 2.5%. The index's gains tracked those of Wall Street's main indexes, which rose for the fifth , opens new tab straight day. This week, the 90-day pause in the US-China tariff dispute, along with the recent US-UK trade agreement, sparked optimism for future US trade deals and helped ease recession concerns. "There's a lot of optimism right now. The markets are being driven by momentum," said Michael Dehal, senior portfolio manager at Dehal Investment Partners of Raymond James. "But when you look at the sentiment of how people feel, it's not really matching the momentum. I think people are still a bit cautious, still kind of questioning this rally." Data showed the U.S. consumer sentiment slumped further in May, while one-year inflation expectations surged. On Friday, U.S. President Donald Trump said U.S. officials will send letters to countries in the coming weeks, outlining the costs associated with doing business in the United States, though he did not provide additional details. On TSX, MEG Energy's (MEG.TO) , opens new tab surged 18.7%, making it the day's biggest gainer, after rival Strathcona(SCR.TO) , opens new tab announced plans to launch a C$5.93 billion ($4.24 billion) hostile takeover bid of the Canadian oil and gas producer. The energy index (.SPTTEN) , opens new tab gained 0.54%. Healthcare stocks (.GSPTTHC) , opens new tab gained 3%, powered by a 9.7% gain in cannabis company Tilray Brands . ($1 = 1.3971 Canadian dollars) https://www.reuters.com/markets/europe/tsx-futures-rise-continued-trade-optimism-2025-05-16/

2025-05-16 11:19

LONDON, May 16 (Reuters) - What matters in U.S. and global markets today By Mike Dolan , opens new tab, Editor-At-Large, Financial Industry and Financial Markets Sign up here. Wall Street stocks look set to sustain this week's gains, fueled by trade de-escalation hopes and soft April inflation readings. But investors will no doubt be conscious of the still-febrile state of the economy and policymaking. I'll dive into all the details below and be back with more columns and reading suggestions next week. Today's Market Minute * Russian and Ukrainian negotiators met in Istanbul on Friday for their first peace talks in more than three years as both sides come under pressure from U.S. President Donald Trump to end Europe's deadliest conflict since World War Two. * Trump on Thursday announced deals totaling more than $200 billion between the United States and the United Arab Emirates, including a $14.5 billion commitment between Boeing, GE Aerospace and Etihad Airways. * India is considering plans to dramatically increase the water it draws from a major river that feeds Pakistani farms downstream, as part of retaliatory action for a deadly April attack on tourists that New Delhi blames on Islamabad. * The steady, gradual decline in U.S. inflation has recently come with an unwelcome side effect: rising 'real' borrowing costs. With the Federal Reserve's official policy rate on hold and the benchmark 10-year Treasury yield edging higher, inflation-adjusted interest rates are rising, effectively tightening monetary policy and financial conditions. Read Reuters columnist Jamie McGeever’s latest analysis. * China has focused on expanding its export markets across the ‘Global South’, particularly in Southeast Asia. But this is creating a new ‘China shock’ as the region's manufacturers struggle to compete. Check out the column from Manishi Raychaudhuri, the founder of Emmer Capital Partners Ltd. Trade and inflation relief The S&P 500 (.SPX) , opens new tab is back in positive territory for the year for the first time since February, and futures point to modest further gains on Friday. The VIX "fear index" of equity volatility has fallen to its lowest point since March, as has the Treasury market equivalent (.MOVE) , opens new tab. U.S. tech and aircraft firms got a boost this week following the announcement of new orders from Middle East countries that Trump has visited this past week. Meanwhile, a surprise drop in April U.S. producer prices helped Treasuries rally on Thursday. Ten-year Treasury yields tumbled back to as low as 4.40% on Friday, down 15 basis points from Thursday's intraday peak. The dollar (.DOXY) , opens new tab was on the back foot as a result. The release of March data on foreign holdings of U.S. Treasuries later on Friday will be watched closely for any evidence of overseas wariness about U.S. debt, although the numbers will pre-date the April chaos. Overall, the state of play for the markets and the economy remains pretty fluid, with U.S. bilateral trade negotiations still in the midst of a 90-day pause and many price and activity readings still unreliable given the seismic trade distortions afoot. While the S&P 500 is back to where it was at the start of the year, it's still underperforming Germany's DAX (.GDAXI) , opens new tab by more than 25% in dollar terms. It's also lagging behind euro zone benchmarks (.STOXXE) , opens new tab by some 20% and Hong Kong's Hang Sen (.HIS) , opens new tab by 16%. Additionally, the Nasdaq (.IXIC) , opens new tab and Russell 2000 (.RUT) , opens new tab remain in the red for 2025. And the dollar index is still down almost 6% for the year. The soft producer price report was a relief, particularly because this data feeds into the Federal Reserve's favored inflation gauge. But Walmart's earnings suggest we may be in the eye of a storm. The world's largest retailer declined to provide a profit forecast for the second quarter and said it will have to start raising prices later this month due to the high cost of tariffs. U.S. April import and export prices are published later on Friday, alongside the University of Michigan's update on consumer sentiment for May. As to Fed thinking, the central bank is holding the second day of a conference on its five-year review of its strategic monetary policy stance. Fed Chair Jerome Powell indicated on Thursday that big supply-side changes to the economy since 2020 may force the Fed to become less tolerant of above-target inflation. Overseas, European stocks climbed anew. The region-wide STOXX 600 index (.STOXX) , opens new tab was set for its fifth consecutive weekly advance and the DAX hovered near a record high. Helping European sentiment, Russia and Ukrainian negotiators are meeting in Istanbul in what has been billed as their first direct peace talks in three years. However, Russian President Vladimir Putin will not meet Ukrainian President Volodymyr Zelenskiy there, dashing earlier hopes for face-to-face talks. Trump also said there would be no movement in negotiations without a meeting between himself and Putin. In Asia, Chinese and Hong Kong stocks (.CSI300) , opens new tab, (.HSI) , opens new tab dropped on Friday as market sentiment came under pressure from renewed U.S.-China tech tensions and a disappointing earnings report from Alibaba. The U.S. Commerce Department is considering placing more Chinese companies, including ChangXin Memory, on its restricted export list, a person familiar with the matter told Reuters. Chart of the day Powell opened a two-day conference on the Fed's strategic approach to monetary policy by saying the economic environment has changed significantly since 2020. He flagged the increasing likelihood of a "period of more frequent, and potentially more persistent, supply shocks" ahead. The comments suggest a change to the Fed's position adopted five years ago that favored focusing on average inflation targeting to avoid overreacting to temporary overshoots that could penalize job creation unnecessarily. Powell noted that structural drivers of inflation may have changed, meaning the Fed may now have to be less tolerant of above-target inflation and quicker to rein it in. Today's events to watch * U.S. April housing starts/permits, import/export prices (8:30 AM EDT), University of Michigan May consumer survey (10:00 AM EDT), March TIC data on foreign holdings of Treasuries (4:00 PM EDT) * Federal Reserve Board holds second and final day of Thomas Laubach Research Conference on its five-year monetary policy framework review * Richmond Fed President Thomas Barkin and San Francisco Fed President Mary Daly speak; European Central Bank chief economist Philip Lane speaks * Russia and Ukrainian negotiators meet in Istanbul in what is billed as their first direct peace talks in three years * US President Donald Trump completes his Middle East tour in the United Arab Emirates Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles , opens new tab, is committed to integrity, independence, and freedom from bias. https://www.reuters.com/markets/us/global-markets-view-usa-2025-05-16/

2025-05-16 11:05

Leo's immigrant background influences his call for compassion Pope's speech covers peace, justice and religious freedom Leo condemns arms trade and urges multilateral diplomacy VATICAN CITY, May 16 (Reuters) - U.S.-born Pope Leo XIV, in his first address to world diplomats, said on Friday that the dignity of migrants had to be respected, possibly putting himself on a collision course with the administration of U.S. President Donald Trump. The pope, who was born in Chicago but lived for many years in Peru as a missionary, said his own background made him feel compelled to call for compassion and solidarity with those seeking a better life in other countries. Sign up here. "My own story is that of a citizen, the descendant of immigrants, who in turn chose to emigrate," he told ambassadors at the Vatican. "All of us, in the course of our lives, can find ourselves healthy or sick, employed or unemployed, living in our native land or in a foreign country, yet our dignity always remains unchanged. It is the dignity of a creature willed and loved by God," he added. Leo's ancestors are believed to have come from either the Dominican Republic or Haiti, two countries that share an island in the Caribbean, and his family has roots in the Creole culture of New Orleans in the southern U.S. state of Louisiana. "No one is exempted from striving to ensure respect for the dignity of every person, especially the most frail and vulnerable, from the unborn to the elderly, from the sick to the unemployed, citizens and immigrants alike," said Leo, who was elected last week to succeed Pope Francis as head of the 1.4-billion member Roman Catholic Church. Trump has vowed to deport millions of immigrants who are in the U.S. illegally. Pope Francis, who died last month, had a very conflictual relationship with Trump over immigration, with Francis once calling Trump "not Christian" because of his anti-migrant policies and plans to build a wall along the southern border. Before becoming pope, Cardinal Robert Prevost indirectly criticised U.S. Vice President JD Vance, who had asserted - incorrectly according to Prevost - that Catholic theology called on people to take care of their own before turning to others. Vance is due to lead a U.S. delegation at Leo's inaugural Mass on Sunday. FAMILY VALUES The Vatican has diplomatic relations with about 185 countries and Leo wove his speech around the themes of peace, justice and religious freedom, calling for an end to the arms trade and stressing the need for multilateral diplomacy. He indicated that he would continue in the tradition of his predecessors to travel the world, saying he wanted to get to know the countries where the ambassadors are from. Pope Leo also used his speech to restate the Church's traditional teaching that heterosexual marriage is a foundation of society. "It is the responsibility of government leaders to work to build harmonious and peaceful civil societies. This can be achieved above all by investing in the family, founded upon the stable union between a man and a woman," he said. While Pope Francis also said the Church could not accept same-sex marriage, conservatives accused the late Argentine pontiff of sowing confusion among the faithful by being more welcoming than his predecessors to LGBTQ people and approving blessing of individuals in stable same-sex relationships. Leo reaffirmed the Church's position against abortion, called for protection of religious freedom and said he would continue to pursue inter-religious dialogue. The pope condemned what he called a "destructive urge for conquest", without naming any specific countries. Later, he mentioned the Middle East and Ukraine, saying they were two of the places where people were suffering "most grievously". The Church, Leo said, would not hesitate to use "blunt language" when necessary to speak the truth to the powerful of the world. https://www.reuters.com/world/europe/pope-leo-tells-diplomats-dignity-migrants-must-be-respected-2025-05-16/

2025-05-16 10:16

MUMBAI, May 16 (Reuters) - The Indian rupee closed nearly flat on Friday but notched its second consecutive weekly fall as a relief rally following an India-Pakistan truce proved fleeting in the face of sustained dollar demand from local companies and foreign banks. On the day, outflows related to an equity block deal weighed on the rupee, while broad weakness in the dollar and mild exporter hedging helped keep a lid on the currency's losses, traders said. Sign up here. The rupee closed at 85.5050 against the U.S. dollar, nearly unchanegd from its close of 85.55 in the previous session. It declined 0.1% on the week after falling nearly 1% the previous week. The currency hovered in a 84.6250-85.7225 range over a holiday-shortened trading week which saw the currency markets react to a ceasefire between India and Pakistan, a U.S.-China trade pact, developments in trade negotiations between India and the U.S. alongside choppy price action in the U.S. dollar. India's benchmark Nifty 50 index (.NSEI) , opens new tab hit its highest level since October this week and logged a weekly rise of over 4%. The country's the 10-year benchmark bond was in the green week-on-week as well. In the near-term, the rupee is likely to be range-bound between 84.80 and 85.80, said Amit Pabari, managing director at FX advisory firm CR Forex. Traders expect the currency to be influenced by developments on a potential India-U.S. trade deal alongside the broad trajectories of the U.S. dollar and the Chinese yuan. Asian currencies were mostly higher on the day with the Korean won leading gains. The dollar index was a tad lower at 100.7, weighed down by heightened odds of rate cuts by the Federal Reserve later this year. The dollar is "likely to find structural depreciation the path of least resistance," Richard Yetsenga, group chief economist at ANZ wrote in a Friday note. https://www.reuters.com/world/india/rupee-flat-day-dips-week-corporate-interbank-dollar-bids-weigh-2025-05-16/

2025-05-16 10:12

BUENOS AIRES, May 16 (Reuters) - On the streets of downtown Buenos Aires, where years of tough currency controls fermented a thriving black market for dollars, an army of illegal money traders are finding times hard under the economic reforms of Argentine President Javier Milei. Milei tore down most currency controls last month, easing access for Argentines to official currency markets after six years of restrictions. Sign up here. That is not good news for the street traders, known locally as "arbolitos" (literally, little trees), but has been welcomed by locals and companies who can now exchange pesos for dollars at greater amounts and with more ease than before. Part of a wider set of economic reforms Milei has enacted since taking office in late 2023, the easing of currency controls is a bold attempt to shake the economy out of years of crisis that had made the South American country a pariah of global markets. Investors had called for the end of capital controls to boost trade and erase distortions caused by huge gaps between the official exchange rate and the black market. In recent weeks, the dueling FX rates converged for the first time since 2019, when the government had imposed capital controls to defend a crashing peso currency. Everyday Argentines no longer need to resort to the black market to get their money's worth, while companies are able to access dollars to pay for imports without having to abide by a previous waiting-period. "It brings back confidence to the financial system," said Ariel Coremberg, an economist at the University of Buenos Aires and an adviser to Milei, adding that the measure will increase taxable flows as fewer people seek black market dollars. "Us arbolitos here are going through a crisis," said Francisco, 50, a black market trader in front of a flower stand on a busy street in downtown Buenos Aires last week, who asked to only be identified by his first name. Nearby, another money trader who gave his name as Leo said: "Our legs are being cut from under us." GOVERNMENT SEEKS TO LURE INVESTORS The winding down of currency controls was part of a larger macroeconomic shift that was key to the country sealing a new $20 billion deal with the International Monetary Fund last month and starting to lure investors it needs to boost the economy. Companies will be able to send new profits abroad without facing the restrictions they did previously. Foreign investors "all reacted well" to the lifting of the currency controls, said Fausto Spotorno, an economist at the OJF consultancy in Buenos Aires. "The question is where this money will be invested." To be sure, Argentina has become more expensive relative to its neighbors under Milei, cutting off a source of dollars as would-be tourists have baulked at the higher prices. Inbound tourism dropped by a quarter in the first three months of 2025 compared to the same period last year, official data show. And there will still be demand for the black market from the country's large informal workforce, said Federico Filippini, chief economist at financial consultancy Adcap in Buenos Aires. Both informal workers and business owners with undeclared income use the black market for exchange to avoid attention from the tax authorities. Many Argentines have also traditionally converted part of their peso income into dollars as a bulwark against volatility. But, said Guadalupe Calvano, a high school teacher in Buenos Aires, the reality was that many now did not have enough spare cash to convert it into dollars - on the black market or otherwise. "People lost their capacity to save," said Calvano. She said she used to put aside 10% of her salary to buy dollars but has stopped doing so because her salary has not increased to match a recent uptick in the cost of goods and the price of her utility bills. Inflation has cooled under Milei, but the income of state workers like teachers has dwindled in real terms. "I can't think about buying dollars while I'm not sure if I will make it until the end of the month or not," said Calvano. https://www.reuters.com/markets/currencies/argentinas-black-market-dollars-falters-currency-controls-are-eased-2025-05-16/

2025-05-16 10:08

Earnings on tap: Target, Lowe's, Home Depot Walmart warns of price hikes due to tariffs US retail sales growth slowed in April NEW YORK, May 16 (Reuters) - A batch of U.S. retail earnings reports in the coming week is set to shed more light on the economic fallout from the shifting tariff backdrop and test the stock market's sharp rebound. Results from retailers including Target (TGT.N) , opens new tab, Home Depot (HD.N) , opens new tab and Lowe's (LOW.N) , opens new tab arrive as investors have become less worried that U.S. President Donald Trump's tariffs will send the economy into a recession, particularly following the recent U.S.-China trade truce between the world's two largest economies. Sign up here. But a warning from Walmart (WMT.N) , opens new tab on Thursday that the world's largest retailer will have to start raising prices due to the high tariffs is putting other retailers in the spotlight, as investors watch how they are reacting to a trade backdrop that remains in flux. "Retailers are going to be incredibly important, especially after what happened with Walmart's announcement," said Matthew Maley, chief market strategist at Miller Tabak. Maley said it was notable that Walmart's warning followed news of the U.S.-China truce, in which both sides are reducing their extra tariffs that had exceeded 100% for 90 days. That Walmart is "still warning about the tariffs that will be put in place, even though they won't be some of the most severe ones that everybody was worried about, obviously that raises some concerns," Maley said. The potential for tariffs to raise prices that could slow consumer spending or drive up inflation has worried investors, particularly since Trump's April 2 "Liberation Day" announcement of sweeping levies on imports. The retailers' quarterly reports also will offer the latest glimpse into the health of consumer spending, which accounts for more than two-thirds of U.S. economic activity. Data on Thursday showed U.S. retail sales growth slowed sharply in April as the boost from front-loading purchases ahead of tariffs faded, while consumer sentiment and other surveys have been weak. "Sentiment is pretty sour," said Jack Ablin, founding partner and chief investment officer at Cresset Capital. "But what we have to do is find out if households are really following through and pulling back on spending." Results in the coming week also include apparel maker Ralph Lauren (RL.N) , opens new tab and off-price retailer TJX Cos (TJX.N) , opens new tab, with the various reports offering insight into a number of consumer segments, investors said. One topic of interest is whether shoppers will "trade down" to less expensive items "because people are nervous about rising prices," said JJ Kinahan, CEO of IG North America and president of online broker Tastytrade. Stocks have staged a massive recovery since Trump's April 2 announcement set off extreme volatility and sent stocks plunging. The benchmark S&P 500 (.SPX) , opens new tab index is up over 18% from its April closing low and has erased its losses for the year. The stock market "just continues to bounce back," Kinahan said. https://www.reuters.com/business/wall-st-week-ahead-retailers-set-give-tariff-view-us-stock-market-roars-back-2025-05-16/