2025-03-06 23:16

MADRID, March 6 (Reuters) - Torrential rains on Thursday caused floods that swept away cars as local authorities evacuated schools and closed roads in eastern Spain, four months after deadly flash floods in Valencia caused killed more than 220 people. The state weather agency Aemet issued orange alerts for some parts of the Murcia, Valencia and Catalonia regions on the country's Mediterranean coast as officials told people to stay indoors. Spaniards are still nervous after heavy rains last year caught authorities on the hop and caused the country's deadliest natural disaster in decades, with many blaming local and national officials for warning people of the danger too late. Images broadcast on a local television station showed a car being swept down the river Lorca in Murcia. A woman had to be rescued from the car by local firemen, La 7 television said. Another man had to be rescued from his vegetable patch with a tractor, La Sexta said. Fernando Lopez Miras, president of the Murcia region in southeastern Spain, said there had been no casualties on Thursday although one person died when they were swept away in a flooded ravine earlier in the week. "There was nothing to indicate that it was going to rain as it is raining," Lopez Miras said on La Sexta. "Every day the ravines are accumulating more water and there are more flooded streets. The water won't stop and the Aemet's alerts hadn't forecast this would be so prolonged." Aemet said that in some areas 120mm had fallen in 12 hours and some weather stations had experienced more rain in March than would normally be expected in all of the spring season. It said a new weather front coming from the west would mean the rains would continue across the country until the weekend. Sign up here. https://www.reuters.com/business/environment/torrential-rain-falls-spain-four-months-after-deadly-valencia-floods-2025-03-06/

2025-03-06 22:28

Fed's Waller says March rate cut is unlikely Fed's Waller says cuts later this year are still on table Waller says larger tariffs now being weighed run bigger inflation risk NEW YORK, March 6 (Reuters) - Federal Reserve Governor Christopher Waller said on Thursday he leans strongly against a rate cut at the Fed's upcoming policy meeting this month, although he reckons cuts later in the year remain on track if inflation pressures continue to abate. In discounting an easing at March 18-19 Federal Open Market Committee, Waller indicated he simply will not have the inflation data in hand to know whether cutting what’s now a 4.25% to 4.5% federal funds rate range is justified, especially amid the heavy uncertainty created by President Donald Trump’s trade agenda. “I want to see what happens with the February inflation data. Want to see a little bit more with what happens with tariff policies,” Waller said at a Wall Street Journal event. When it comes to price pressures, “if you think it's moving backwards target, you can start lowering rates, I wouldn't say, at the next meeting,” but at some point after that, the Fed official said. Longer-term, Waller said the monetary policy outlook offered by officials at their December meeting still looks plausible. Noting projections of two cuts this year and next, he said “I don't think there's anything wrong with that kind of number,” even if the actual outcome is slightly different. As the year moves forward, “I'm still kind of believing that the good news rate cuts are in place,” which are easings driven by easing inflation pressures, as opposed to cuts aimed at countering economic weakness. But Waller did acknowledge recent data that points to rising weakness, and he said he’s waiting to see if it translates into broader-based government data. Financial markets currently see negligible odds of a March cut, remain divided over the May meeting, and are pricing in a rate cut at the June FOMC gathering. Waller’s comments come as anxiety over the economic outlook is mounting, as the Trump Administration presses ahead erratically with major tariffs on America’s largest trading partners. Economists widely believe Trump’s trade levies, which function as tax increases on Americans to the extent foreign producers do not eat the higher costs, will drive inflation pressures higher over time, and could depress growth. Some recent data show the public is bracing for higher price pressures as their optimism over the economic outlook dims. Meanwhile, the upside risk to price pressures comes as a once steady retreat in inflation toward the Fed’s 2% target appears to have stalled. On Tuesday, New York Fed President John Williams said “based on what we know today, given all the uncertainties around that, I do factor in some effects from tariffs now on inflation, on prices, because I think we will see some of those effects later this year.” Speaking Thursday, Philadelphia Fed President Patrick Harker noted while inflation has been retreating, "I'm worried that right now that is at risk.” TARIFF TROUBLES Waller’s outlook is notable for having recently signaled a somewhat sanguine outlook on tariffs, saying on Feb. 17 , opens new tab that “my baseline view is that any imposition of tariffs will only modestly increase prices and in a non-persistent manner," which in turn argues for no monetary policy response. By and large, most Fed officials have commented gingerly about the impact of tariffs on monetary policy amid uncertainty over the exact details of the tariff agenda, including whether the taxes will be maintained. Waller’s comments on Thursday flagged the uncertainty of understanding how tariffs will impact the economy and noted that changes in the state of the economy as well as Trump's shift to a harder line make it difficult to compare the two periods for policy clues. Waller suggested however that limiting the pass-through of whatever tariffs endure might be harder this time. “It's very hard to eat a 25% tariff out of the profit margins,” he said. The central banker also said that when it comes to gauging inflation expectations he’s more focused on market measures over survey data, and on that front, the message of market pricing suggests that traders and investors see no real longer-run inflation impact from current Trump policies' goals. Sign up here. https://www.reuters.com/markets/us/feds-waller-doesnt-see-need-cut-interest-rates-later-this-month-2025-03-06/

2025-03-06 22:11

MOSCOW, March 6 (Reuters) - Russian cryptocurrency exchange Garantex on Thursday said stablecoin Tether had blocked digital wallets on its platform holding more than 2.5 billion roubles ($28 million), forcing it to suspend operations days after coming under EU sanctions. The European Union included Garantex in its 16th sanctions package against Russia over the conflict in Ukraine on February 24, accusing the crypto exchange of being closely associated with EU-sanctioned Russian banks and responsible for circumventing EU sanctions. "We have bad news," Garantex said on Telegram. "Tether has entered the war against the Russian crypto market." When contacted for comment, a spokesperson for Tether told Reuters to direct questions to the U.S. Secret Service, without giving further details. Garantex said it was temporarily suspending the provision of all services, including cryptocurrency withdrawals. "We are fighting and will not give up," Garantex said. "Please note that all USDT held in Russian wallets is now under threat." Deprived of access to the U.S. dollar and cut off from the SWIFT global payments network, some Russians have turned to cryptocurrencies to move money overseas and the central bank has allowed businesses to use cryptocurrencies in global trade. The United States called Garantex a "ransomware-enabling virtual currency exchange" when sanctioning the company in April 2022, accusing it of allowing its systems to be abused by illicit actors. Russian lawmaker Anton Gorelkin accused Western countries of pursuing political goals and said it would not be the last time pressure is exerted on Russia's cryptocurrency infrastructure. "To the investors who underestimated this risk, my condolences," Gorelkin wrote on Telegram on Thursday. "But it is worth recognising that it is impossible to completely block this market for Russia," he said. "Cryptocurrencies will remain one of the most effective tools for circumventing sanctions, although USDT can be safely deleted from this list." ($1 = 89.2500 roubles) Sign up here. https://www.reuters.com/technology/sanctioned-russian-crypto-exchange-suspends-services-tether-blocks-wallets-2025-03-06/

2025-03-06 21:39

Costco says it could mix up supply chain if tariffs prove painful Company misses Wall Street expectations for second-quarter earnings Retailers throughout US bracing for potential trade wars as tariffs ramp up March 6 (Reuters) - Costco Wholesale (COST.O) , opens new tab would consider making changes to its international supply chain if tariffs from U.S. President Donald Trump lead to big price hikes, Chief Executive Officer Ron Vachris said on a conference call on Thursday. The membership-only retailer, which on Thursday missed Wall Street expectations for second-quarter profit, organizes its stores in a so-called treasure hunt structure that allows it to adjust its merchandise mix more easily than other retailers — and possibly source products from countries that are not subject to tariffs, Vachris said. "With our flexibility, there are not many items we can't find something else to replace, or something else to bring in," Vachris said on Costco's second-quarter earnings call. Vachris added, though, that Costco would work with existing suppliers to keep prices low, and aim to avoid charging consumers more at a time when they are getting choosier about how to spend their money. Costco earned $4.02 per diluted share, missing analysts' estimate of $4.11 per share, according to data compiled by LSEG. The company's quarterly revenue rose 9% to $63.72 billion, compared with analysts' average expectation of $63.13 billion. Costco's shares fell nearly 1% in extended trading. Retailers are struggling to navigate an uncertain environment amid fears of trade wars. Target (TGT.N) , opens new tab and Walmart (WMT.N) , opens new tab both recently issued cautious forecasts, bracing for tariff-driven price hikes and retaliatory measures by affected countries. Vachris said that about one-third of Costco's U.S. sales are products imported from other countries, less than half of which are from China, Mexico and Canada. Soaring egg prices, a result of rising bird flu cases in the U.S., also hit Costco's margins, alongside coffee and cocoa price inflation. Higher costs of eggs are boosting prices in Costco's bakery section, where eggs are a key ingredient in cakes and breads, overshadowing its lower costs for sugar, butter and flour, Chief Financial Officer Gary Millerchip said on the call. Merchandise costs for the quarter ended February 16 rose 9%, compared with a 5% rise a year earlier. Costco is also facing political headwinds over a decision to keep its diversity, equity and inclusion programs, which some big consumer brands and retailers have dropped since the Trump administration threatened to investigate companies that maintain them. In January, 19 Republican U.S. state attorneys general demanded that Costco repeal the DEI programs within 30 days or else explain why it hadn't. It was unclear on Thursday whether Costco responded to the demand. Sign up here. https://www.reuters.com/business/retail-consumer/costco-beats-quarterly-sales-estimates-bulk-buying-surge-2025-03-06/

2025-03-06 21:12

ORLANDO, Florida, March 6 (Reuters) - Germany's plans to go on its biggest public spending spree in 35 years will likely lead to higher borrowing costs across the euro zone – and that's a good thing. While the European Central Bank may have proceeded with its widely flagged 25 basis point cut on Thursday, lowering the policy rate to 2.5%, the real story in Europe this week is the sudden and spectacular jump in euro bond yields and massive shift in expectations for the ECB's terminal rate. Up until now, Europe's economy was widely viewed as stagnant and unproductive, reflected in the low yields on German bonds versus U.S. Treasuries, dovish expectations for the ECB's policy path, and estimates of an ultra-low or even negative long-term neutral interest rate. But this all changed in an instant this week. On Wednesday, news of Berlin's fiscal plans sent Germany's 10-year Bund yield rocketing the most since the euro was launched in 1999, and, by some estimates, since 1990. Money markets are moving too. Implied pricing now suggests the ECB will not cut interest rates much more from here – a notable shift from market expectations only 48 hours ago. While talk of 'European exceptionalism' may still be a stretch, the gap between the euro zone and the U.S. is narrowing on many fronts, including growth expectations, equity prices, and, now, interest rates. This is a good reminder that while bond yields can rise for bad reasons – worries about widening deficits, burdensome debt loads, or plain old inflation – they can rise for good reasons, too. For Germany this should be stronger growth, greater investment, increased productivity, and deeper fiscal coordination across the continent. It's a set of goals analysts have been urging the bloc to pursue for years. If the euro zone is successful in achieving them, it will need to get used to higher borrowing costs – but that's not a bad exchange. POSITIVE R-STAR? Policymakers are less nimble than market traders, so the ECB can be forgiven for cutting rates on Thursday, even as bond yields across the bloc were spiking. The central bank noted that policy is becoming "meaningfully less restrictive," and President Christine Lagarde said policymakers must be "attentive and vigilant" to the new fiscal landscape. This all suggests that the ECB's 'terminal rate' - the lowest point of the easing cycle still in play - will now be higher than previously thought. The question is how much higher. Economists at Nomura have already removed two quarter-point rate cuts from their ECB outlook and are now forecasting a terminal rate of 2.25%. They had previously speculated that the ECB could go as low as 1.50%. JP Morgan economists reckon a terminal rate below 2.00% is now unlikely, and that's where euro money markets appear to be settling as well. This all suggests the ECB is probably close to the end of its easing cycle, which chimes with a speech by ECB board member Isabel Schnabel, who argued even before this week's news that a "pause or halt" to rate cuts may be approaching. Importantly, it's not just the outlook for nominal ECB rates that is changing. Estimates of "R-star" – the inflation-adjusted neutral rate of interest that neither slows nor accelerates economic activity – will likely rise also. And there's plenty of scope for that. Several leading models have long indicated that the euro zone's R-Star is ultra-low or even negative, meaning the region's economy requires a real interest rate below zero over the long run. In light of this week's news, it's safe to say those models – and many investors' priors – will need to be updated. (The opinions expressed here are those of the author, a columnist for Reuters.) Sign up here. https://www.reuters.com/markets/europe/berlins-historic-shift-redraws-euro-rate-horizon-mcgeever-2025-03-06/

2025-03-06 21:00

Tesla drops after bearish brokerage view, report says Kroger rises on upbeat annual sales forecast Weekly jobless claims stand at 221,000 Indexes off: Dow -0.99%, S&P 500 -1.78%, Nasdaq -2.61% NEW YORK, March 6 (Reuters) - Wall Street stocks finished lower on Thursday, with the Nasdaq confirming it has been in a correction since December, weighed down by market jitters over the current uncertainty surrounding U.S. trade policy. President Donald Trump announced on Thursday that goods from Canada and Mexico covered by the U.S.-Mexico-Canada trade agreement (USMCA) will be exempted for a month from the 25% tariffs imposed earlier this week. The development comes a day after Trump exempted automotive goods from the tariffs. Trump had earlier only mentioned an exemption for Mexico, but later signed an amendment to his order that now covers Canada as well. "The fog of confusion is getting thicker by the moment unfortunately," said Mark Malek, chief investment officer at SiebertNXT in New York. "We are getting a lot of just different conflicting information: tariffs are on, tariffs are off, some tariffs are off and so forth." Ten out of 11 sectors on the benchmark S&P 500 index finished lower, with the biggest losses in consumer discretionary (.SPLRCD) , opens new tab, real estate (.SPLRCR) , opens new tab and technology (.SPLRCT) , opens new tab equities. Energy (.SPNY) , opens new tab was the only gainer. The Nasdaq dropped 10.4% from its December 16 closing level, confirming a correction. The S&P 500 briefly fell below its 200-day moving average during the session, a technical support level which could signal further declines if it significantly breaks under. The CBOE Volatility Index (.VIX) , opens new tab, also known as Wall Street's fear gauge, ended up 2.94 points at 24.87, marking its highest close since December 18. The Dow Jones Industrial Average (.DJI) , opens new tab fell 427.51 points, or 0.99%, to 42,579.08, the S&P 500 (.SPX) , opens new tab lost 104.11 points, or 1.78%, to 5,738.52 and the Nasdaq Composite (.IXIC) , opens new tab lost 483.48 points, or 2.61%, to 18,069.26. "The uncertainty created by rapidly shifting policy pronouncements can damage investment in particular and hurt the economy," said Bill Sterling, global strategist at GW&K Investment Management. "The other thing that investors are concerned about is the size of the tariffs. This is way beyond what was experienced in 2018 and could raise inflation." Automaker General Motors (GM.N) , opens new tab lost 2.6% while its counterpart Ford (F.N) , opens new tab also finished 0.4% lower. Tesla (TSLA.O) , opens new tab fell 5.6% as brokerage Baird named the electric carmaker a "bearish fresh pick". Marvell (MRVL.O) , opens new tab slumped nearly 20% after the chipmaker's results failed to impress investors. Other semiconductor makers were lower, including Broadcom (AVGO.O) , opens new tab and Nvidia (NVDA.O) , opens new tab, pulling the broader chip index (.SOX) , opens new tab down 4.5%. Kroger (KR.N) , opens new tab rose 2% after forecasting annual same-store sales largely above estimates. "With the constant barrage of geopolitical news - the tariffs on and then off again - confidence is getting a little bit leaky and it's not surprising sentiment is not great," said Jack Janasiewicz, portfolio manager at Natixis Investment Managers Solutions in Boston. "We are also starting to see economic data slow at the margin. You put all these things together and it's not surprising you're starting to see chips come off the table." Data shows that the number of Americans filing new applications for unemployment benefits fell more than expected last week. Investors will be eyeing Friday's more comprehensive payrolls data. Traders now see the Federal Reserve lowering borrowing costs by 25 basis points for the first time this year in June, according to data compiled by LSEG. Philadelphia Fed President Patrick Harker said that trouble may be brewing for an economy that is currently in good shape but showing signs of stress in the consumer sector and risks to the inflation outlook. Declining issues outnumbered advancers by a 2.87-to-1 ratio on the New York Stock Exchange. There were 76 new highs and 151 new lows on the NYSE. The S&P 500 posted one new 52-week high and 10 new lows while the Nasdaq Composite recorded 29 new highs and 149 new lows. Total volume across U.S. exchanges was 16.13 billion shares, compared with the 20-day moving average of 16.08 billion shares. Sign up here. https://www.reuters.com/markets/us/futures-slide-marvells-forecast-fails-impress-tariffs-focus-2025-03-06/