2025-01-24 11:12
DUBAI, Jan 24 (Reuters) - Vessels in the northern Gulf have received multiple VHF radio challenges, including demands to alter course, the United Kingdom Maritime Trade Operations said on Friday, adding they could be part of an Iranian military exercise. The UKMTO, which monitors marine security in the region, advised seafarers that vessels near Iranian waters may experience such VHF hailing during the Islamic Revolutionary Guard Corps' exercise. Naval units from the Revolutionary Guards were conducting operations in the Gulf's Strait of Hormuz on Friday as part of the exercise, called Great Prophet 19, the semi-official Fars news agency reported. The commander of the IRGC Navy, Admiral Alireza Tangsiri, said the exercises, which began in early January, carried a message of peace and friendship for neighbouring countries, Iranian media reported. Earlier, the UKMTO reported an incident involving a vessel 86 nautical miles northeast of Ras Tanura, Saudi Arabia. The ship, which was approached by a small military craft flashing a green laser and urged to enter Iranian territorial waters, proceeded to its next port of call. The Red Sea and Gulf of Aden Joint Maritime Information Center, part of a 46-nation naval partnership, said on Friday it had investigated and found there was a possible connection between the incident reported by UKMTO and the Great Prophet 19 exercise. It did not provide any further information. Sign up here. https://www.reuters.com/world/middle-east/vessels-report-radio-challenges-northern-gulf-amid-iranian-exercise-ukmto-says-2025-01-24/
2025-01-24 11:11
Fed expected to pause easing cycle on Wednesday S&P 500 hits record high this week Stocks digesting flood of Trump actions, tariffs in focus Earnings due next week include Apple, Microsoft NEW YORK, Jan 24 (Reuters) - The Federal Reserve's first meeting of 2025 in the coming week stands to test the resurgence in U.S. stocks as investors gauge the extent of more equity-friendly interest rate cuts in the months ahead. Stocks swooned after the Fed's last meeting in December, when the central bank downgraded its forecast for rate cuts as it braced for firmer inflation this year. Since then, monthly data that showed underlying inflation moderated set off relief on Wall Street, helping drive a rebound in stocks with the benchmark S&P 500 (.SPX) , opens new tab hitting a record high this week. The Fed is broadly expected to pause its easing cycle when it gives its monetary policy statement on Wednesday, with investors instead focused on "what would need to happen for them to start talking about resuming the rate cuts," said Angelo Kourkafas, senior investment strategist at Edward Jones. Given recent data indicating strong economic activity, Kourkafas said, "there's wide expectations that the Fed has no urgency to continue cutting until we get potentially more encouraging inflation data." The Fed's benchmark rate stands at 4.25% to 4.5% after the central bank lowered it by a full percentage point last year. The Fed's easing cycle began after rate hikes had helped bring down inflation from 40-year highs, although it remains above the Fed's 2% annual target. Fed funds futures are pricing in about 40 basis points more of easing -- or nearly two more cuts -- by December, according to LSEG data. Morgan Stanley economists expect Fed Chair Jerome Powell will keep the possibility of a cut at the Fed's March meeting "on the table." "If we are right in our assessment of the incoming data flow, then we think the Fed can stay on hold in January and retain its easing bias," the Morgan Stanley economists said in a note. Meanwhile, President Donald Trump said on Thursday he wants the Fed to cut rates, even as the central bank is expected to pause for an uncertain duration. Stocks have started the year strongly, with the S&P 500 up about 4% so far in January, following back-to-back years of gains of over 20%. Investors this week digested a flood of activity by Trump after his second term began on Monday, including his announcement of private sector investment in artificial intelligence infrastructure that propelled a broad tech stock rally. Some investors were surprised that Trump has not yet moved to enact new tariffs on foreign imports, a key part of his expected agenda that could set off broad market volatility. The president, however, is threatening an array of tariffs, which continues to keep investors on edge about the potential to increase inflation. With the Fed meeting for the first time since Trump's presidency, the possibility of tariffs could factor into the central bank's outlook, said Larry Werther, chief U.S. economist of Daiwa Capital Markets America. "If there's any hint that the Fed is perhaps taking a more solid view on tariffs... and it's unfavorable how they're viewing it with respect to potential inflationary pressures, I think it could potentially be a negative for equities," Werther said. Stocks will also take their cues in the coming week from a slew of earnings results, especially from megacap tech companies. Reports are due from Apple (AAPL.O) , opens new tab, Microsoft (MSFT.O) , opens new tab, Facebook owner Meta Platforms (META.O) , opens new tab and Tesla (TSLA.O) , opens new tab -- four of the "Magnificent Seven" companies whose shares have led equity indexes higher over the past two years. The Magnificent Seven in general have put up stronger earnings growth than the rest of the S&P 500, but their valuations are also higher. The group trades at an average forward price-to-earnings ratio of 43 times expected 12-month earnings, and a median of 31.5 times, compared to 22 times for the S&P 500, according to LSEG data. "If we start to see the Mag 7 struggle to meet some of these lofty expectations, we wouldn't be surprised to see if the valuations take a meaningful hit," said Michael Reynolds, vice president of investment strategy at Glenmede. Sign up here. https://www.reuters.com/markets/us/wall-st-week-ahead-feds-rate-cut-view-set-test-resurgent-us-stocks-rally-2025-01-24/
2025-01-24 11:05
A look at the day ahead in U.S. and global markets from Mike Dolan The dollar (.DXY) , opens new tab fell to its lowest of the year as the Bank of Japan delivered a long-awaited interest rate rise on Friday, euro business unexpectedly returned to growth and President Donald Trump's latest comments gave China a lift. The first week of the new Trump Presidency has seen hectic parsing of the new administration's intentions - with markets second guessing Trump's every signal on trade or energy policy and deregulation. Wall Street stocks (.SPX) , opens new tab clocked another record closing high on Thursday on a mix of earnings optimism and Trump's latest salvo on lowering oil prices to get interest rates down. Stock index futures held those gains early Friday, with Big Tech megacaps due to report fourth-quarter updates next week. But it was the dollar that took the heat overnight from a sweep of overseas developments that may encourage global investors to rethink their overwhelming U.S. investment bias. For a start, the yen perked up after the Bank of Japan finally delivered a quarter-point hike in its main policy interest rate to 0.5%, its highest since the 2008 global financial crisis. The reaction was calm, as the hike was considered neither a 'dovish hike' nor 'hawkish hike', in market parlance. While BOJ revised up its inflation forecasts, underscoring its confidence that rising wages will keep inflation stable around its 2% target, BOJ governor Kazuo Ueda said there was no "preset idea" about likely further rate rises from here. Japan's Nikkei stock benchmark (.N225) , opens new tab ended flat. But China's yuan was a bigger mover, as Trump told Fox News late on Thursday that his conversation with Chinese President Xi Jinping last week was friendly and he thought he could reach a trade deal with China. While he said tariffs threats gave him the "power" to push China to curb fentanyl trafficking, he said: "I'd rather not have to use it." The offshore yuan surged to its best level since November and Chinese stocks (.CSI300) , opens new tab, (.HSI) , opens new tab jumped 1-2% on Friday. European stocks (.STOXX) , opens new tab also jumped almost 1% to record highs and the euro hit its best levels in more than a month, topping $1.05 for the first time since mid-December, amid signs of life in euro zone business confidence this month. HCOB's preliminary composite euro zone Purchasing Managers' Index, compiled by S&P Global, rose to 50.2 in January from December's 49.6, unexpectedly nudging above the 50 mark separating growth from contraction. Expectations of another interest rate cut from the European Central Bank next week has improved sentiment, with markets expecting more to come after that. Helped also by relief on what appears like a less draconian Trump tariff stance, the new president's insistence that the United States would guarantee supplies of liquefied natural gas to Europe and even hopes of Ukraine peace deal, euro zone stocks (.STOXXE) , opens new tab have gained twice as much as the S&P500 so far this year. A possible lifting of the excessive gloom about Europe has prompted many asset managers to rethink yawning Transatlantic valuation gaps. "There's too much pessimism on Europe," BlackRock CEO Larry Fink said at the World Economic Forum in Davos on Friday. "It's probably time to be investing back into Europe." Corporate earnings updates helped, not least in the luxury sector (.STXLUXP) , opens new tab. Burberry (BRBY.L) , opens new tab jumped 11.5% after the British brand reported a smaller-than-expected drop in quarterly comparable store sales, with Hugo Boss (BOSSn.DE) , opens new tab adding 2%, Moncler (MONC.MI) , opens new tab jumping 5% and Kering (PRTP.PA) , opens new tab climbing 9.1%. Back on Wall Street, corporate confidence is also lifted by brisk 10%-plus earnings growth and it was encouraged on Thursday as Trump demanded OPEC lower oil prices and called for world interest rates to fall. The Federal Reserve is unlikely to oblige when it meets next week, with markets not expecting another quarter-point reduction in Fed rates until midyear. But the Bank of Canada is likely to join the ECB in lowering borrowing costs in a big week ahead for central bank meetings. Bitcoin popped back higher, meantime, as the U.S. Securities and Exchange Commission rescinded on Thursday accounting guidance long opposed by the cryptocurrency industry, an early Trump pivot away from the policies of the prior administration. Trump ordered the creation of a cryptocurrency working group tasked with proposing new digital asset regulations and exploring the creation of a national cryptocurrency stockpile. Key developments that should provide more direction to U.S. markets later on Friday: * US 'flash' January business surveys from S&P Global, December existing home sales, final reading of University of Michigan's January consumer sentiment survey * US corporate earnings: American Express, Nextera, Verizon, HCA * World Economic Forum in Davos - including IMF Managing Director Kristalina Georgieva and European Central Bank President Christine Lagarde; WTO 'mini ministerial' meeting Sign up here. https://www.reuters.com/markets/us/global-markets-view-usa-2025-01-24/
2025-01-24 10:52
Jan 24 (Reuters) - Kenya's shilling was flat against the U.S. dollar on Friday, data from the London Stock Exchange Group showed. At 1024 GMT, the shilling traded at 129.00/129.50 per dollar, the same as at the close of Thursday's session, the data showed. Sign up here. https://www.reuters.com/markets/currencies/kenyan-shilling-flat-against-us-dollar-2025-01-24/
2025-01-24 10:34
KAMPALA, Jan 24 (Reuters) - The Ugandan shilling traded broadly stable on Friday, although was under slight pressure as energy importers sought foreign exchange, traders said. At 0958 GMT commercial banks quoted the shilling at 3,684/3,694, compared to Thursday's close of 3,680/3,690. Sign up here. https://www.reuters.com/markets/currencies/ugandan-shilling-little-changed-against-dollar-under-pressure-2025-01-24/
2025-01-24 07:47
Man killed in Donegal when tree fell on his car Gust of 183 kph breaks 80-year-old record More than 200 flights at Dublin airport cancelled Streets deserted in Dublin as workers stay home DUBLIN, Jan 24 (Reuters) - Record high winds from Storm Eowyn battered Ireland and Northern Ireland on Friday, leaving one man dead and almost one-third of Irish homes and businesses without power and forcing the cancellation of hundreds of flights. A man was fatally injured when a tree fell on his car in County Donegal, in the northwest of Ireland, police said. Schools were forced to close and public transport ground to a halt. Officials had warned the storm was set to be one of the most dangerous they had faced and the Irish weather agency, Met Eireann, said a gust of 183 kph (113 mph) overnight at Mace Head in County Galway provisionally broke an 80-year-old record of 182 kph. Streets in Dublin were deserted during the usual morning rush hour, as stores kept their shutters down and people heeded a warning to stay indoors until a red wind warning - the highest alert level - lifted for most of Ireland from 1100 GMT. It was the first time a red warning had been put in place for the entire country since Storm Ophelia in 2017, which killed three people. Crews were clearing fallen trees from roads across the country, while the roofs were blown off a number of buildings and an ice skating ring near Dublin was destroyed ESB Networks, which provides energy for the whole of Ireland, said "unprecedented" damage to its network had led to power outages affecting 768,000 homes, farms and businesses. It expected more power cuts as the storm tracks northwards. A further 240,000 properties were without power in Northern Ireland. A spokesperson for ESB said it would take at least a week to restore power for some customers. Eowyn is the fourth storm in the past four months to knock out power in parts of Ireland. Climate scientists say the link between climate change and the frequency and intensity of violent storms such as Eowyn is still unclear. Research shows sea levels are set to rise by at least 1 metre around Ireland this century. Met Eireann warned on Friday of the knock-on risk of coastal flooding. All schools in Ireland and Northern Ireland were closed on Friday and public transport will not run in Ireland while the red warning remains in place. Non-urgent hospital procedures were also cancelled. Over 1,000 flights had been cancelled at British and Irish airports at 1000 GMT, around 20% of scheduled flights, according to aviation analytics firm Cirium. A red warning was earlier in place for British-run Northern Ireland, and in Scotland, the UK Met Office said. Sign up here. https://www.reuters.com/business/environment/ireland-northern-ireland-battered-by-record-winds-storm-eowyn-2025-01-24/
