2024-12-04 21:01

Powell says Fed can afford to be a little more cautious Salesforce jumps after beating Q3 revenue estimates November ADP private payrolls at 146,000 versus 150,000 estimate Indexes: Dow up 0.7%, S&P 500 up 0.6%, Nasdaq up 1.3% NEW YORK, Dec 4 (Reuters) - All three major U.S. stock indexes scored record closing highs on Wednesday as technology shares rallied after upbeat results from Salesforce and as comments by Federal Reserve Chair Jerome Powell gave a late boost to the market. The economy is stronger than it appeared in September when the central bank began cutting interest rates, allowing policymakers to potentially be a little more cautious in reducing rates further, Powell said at a New York Times event. Powell's comments overall along with a Fed economic activity report added to the upbeat tone in the market, said Peter Cardillo, chief market economist at Spartan Capital Securities in New York. The Fed said in a summary of surveys and interviews from across the country known as the "Beige Book" that U.S. economic activity has expanded slightly in most regions since early October. Powell "was very upbeat about economy, and he said we're making progress on inflation... that's good news for stocks in general," Cardillo said. Investors expect a third consecutive interest-rate cut at the central bank's Dec. 17-18 meeting. Salesforce (CRM.N) , opens new tab jumped 11% and hit an all-time high after the enterprise cloud company beat analyst estimates for third-quarter revenue and raised the lower end of its annual revenue forecast. Other cloud companies also advanced. The S&P 500 technology index (.SPLRCT) , opens new tab hit a record closing high, along with the communication services (.SPLRCL) , opens new tab and consumer discretionary (.SPLRCD) , opens new tab indexes. Also in the tech space, Marvell Technology (MRVL.O) , opens new tab rallied 23.2% and also hit a record high after the chipmaker forecast fourth-quarter revenue above analyst estimates. An index of semiconductors (.SOX) , opens new tab rose 1.7%, while Nvidia (NVDA.O) , opens new tab was up 3.5%. The Dow Jones Industrial Average (.DJI) , opens new tab rose 308.91 points, or 0.69%, to 45,014.44, the S&P 500 (.SPX) , opens new tab gained 36.59 points, or 0.60%, to 6,086.47 and the Nasdaq Composite (.IXIC) , opens new tab gained 254.21 points, or 1.30%, to 19,735.12. Investors eagerly await monthly U.S. jobs data due on Friday and jobless claims data on Thursday. Earlier Wednesday, U.S. private payrolls data showed a modest increase in November. Separately, a survey from the Institute for Supply Management showed U.S. services sector activity slowed in November after big gains in recent months. The final reading of the S&P services survey was revised lower to 56.1. "Recent economic data has pretty much confirmed the Fed will cut rates in December," said Sam Stovall, chief investment strategist at CFRA Research in New York. Friday's jobs report is "like the granddaddy of employment reports this week," he said. Advancing issues outnumbered decliners by a 1.2-to-1 ratio on the NYSE. There were 367 new highs and 79 new lows on the NYSE. On the Nasdaq, 2,372 stocks rose and 1,930 fell as advancing issues outnumbered decliners by a 1.23-to-1 ratio. Volume on U.S. exchanges was 13.06 billion shares, compared with the 14.89 billion average for the full session over the last 20 trading days. Sign up here. https://www.reuters.com/markets/us/futures-tick-up-with-focus-fed-commentary-economic-data-2024-12-04/

2024-12-04 21:00

Amazon soy moratorium credited for reducing deforestation Traders do not buy from farms deforested since 2008 Change would allow buying soy from parts of such farms SAO PAULO, Dec 4 (Reuters) - Multinational grains traders operating in Brazil are seeking to weaken an agreement that forbids buying soybeans from farms on deforested land in the Amazon rainforest, environmental advocates involved in the discussions said on Wednesday. Soy traders including ADM (ADM.N) , opens new tab, Cargill, Cofco and Bunge (BG.N) , opens new tab signed up for the "Amazon soy moratorium" in the mid-2000s, pledging to stop buying soy from farms in the Brazilian rainforest that were deforested from 2008 onward. Scientists and conservationists have praised the voluntary moratorium for slowing deforestation in the Amazon, the world's largest rainforest and a bulwark against climate change because its trees absorb vast amounts of climate-warming greenhouse gas. The moratorium is enforced by a working group including representatives of trading companies, environmental advocacy groups and the government. In recent meetings of that group, grains traders have proposed changing the moratorium rules, Carolina Pasquali, executive director of Greenpeace Brasil, said in an interview. The current agreement bars soy purchases from a whole farm if it includes areas deforested since 2008. But traders now propose a distinction between individual soy fields, letting growers export from one part of a farm while planting soy on newly deforested areas nearby, Pasquali said. "It makes the moratorium lose its meaning," she said. "Farmers failing to comply (with the end to deforestation) would still be able sell their soy." Abiove, which represents those trading firms and all major soy purchasers in Brazil, said it was holding discussions on the moratorium, but did not confirm details of any proposal. Abiove members ADM, Cargill, Cofco, Bunge and Louis Dreyfus referred questions to the association. The Guardian newspaper reported earlier that Abiove members planned to vote next week on whether to push for the proposed moratorium changes. Even if Abiove members were to back such a move, environmentalist groups and government signatories to the agreement would need to agree to the change, Pasquali said. Other nonprofits also told Reuters they oppose the change. Under Brazil's forestry code, landowners in the Amazon can legally clear up to 20% of their property. However, a surge in deforestation in the early 2000s sparked calls for action by the private sector, which feared a wider boycott of soy exports. Brazil is the world's largest producer and exporter of soy. Environmentalists argue weakening the moratorium could open up a huge amount of the Amazon region to soy planting. "It is very much an enormous amount of land that was deforested after 2008 in the Amazon," said Jean-François Timmers, an anti-deforestation campaigner with the World Wide Fund for Nature. "We're talking about millions of hectares." In its statement to Reuters, Abiove noted that Brazilian state lawmakers are pushing legislation "that significantly harm the signatories of the Soy Moratorium." The state of Mato Grosso passed a law stripping tax breaks from firms that adhere to the moratorium. Abiove said it defends the soy moratorium while "striving to balance the demands of both farmers and consumers, including updates to the current model to ensure its effectiveness." Sign up here. https://www.reuters.com/markets/commodities/soy-traders-eye-changes-ban-buying-deforested-amazon-guardian-reports-2024-12-04/

2024-12-04 20:58

HOUSTON/WASHINGTON, Dec 4 (Reuters) - Venture Global LNG on Wednesday slammed a U.S. call for an additional environmental review of a proposed Louisiana LNG project as unnecessary, adding that it will be ready to begin construction once the project gets a final go-ahead. The Federal Regulatory Energy Commission (FERC) last week pulled Venture Global LNG's authorization to construct its CP2 export facility, requiring an additional environmental review of air quality impact. The additional review follows a decision on Aug 6 from the U.S. Court of Appeals for the District of Columbia Circuit that quashed FERC's approval of NextDecade's plant at the Port of Brownsville, Texas, and ordered FERC to reconsider the project ramifications with a new environmental statement and public comment period. CP2 has been at the center of a fight with environmentalists seeking to limit future LNG projects on the U.S. Gulf Coast. The 20 million ton per annum facility won FERC construction approval in June. Venture Global did not say if the decision would delay construction nor if it had already begun site work. Engineering and construction giant Worley (WOR.AX) , opens new tab won a contract last year to build the first phase of CP2. It did not immediately respond to a request for comment. "CP2 LNG unquestionably meets or exceeds all required environmental air standards as determined by FERC in its July 2024 order and will be formally replying to the commission in the coming days," a Venture Global spokesperson said. FERC also put on hold its approval for the construction of Commonwealth LNG's planned 9.5 Mtpa LNG export facility in Cameron, Louisiana. Commonwealth said it remained confident in its project and will be providing all requested input for the supplemental environmental impact statement. Sign up here. https://www.reuters.com/sustainability/climate-energy/venture-global-says-new-lng-environmental-review-unnecessary-2024-12-04/

2024-12-04 20:51

Nearly 100% confident of closing U.S. Steel deal by year-end All possible measures on table if U.S. approval denied President-elect Trump opposes $15 bln purchase TOKYO, Dec 5 (Reuters) - Japan's Nippon Steel (5401.T) , opens new tab is committed to its $15 billion acquisition of U.S. Steel (X.N) , opens new tab and is confident of completing it by year-end, a senior executive said, despite strong U.S. opposition including from President-elect Donald Trump. "We will not give up on the deal... There is no global strategy without the U.S.," Nippon Steel Vice Chairman Takahiro Mori told Reuters this week, after returning from his eighth visit to the United States since the deal was announced a year ago. With U.S. Steel, Nippon Steel aims to raise its global steel production capacity to 85 million metric tons per year from 65 million tons now and the asset is core to its goal of lifting production capacity to more than 100 million tons in the long-term. The transaction has faced stiff resistance from politicians and the United Steelworkers (USW), a major labour group. Trump reiterated his opposition to the deal this week. Asked whether U.S. Steel's CEO David Burritt would remain in place, Mori said Nippon Steel would select the right person as CEO from various candidates, including Burritt, but no decisions had been made. Mori, who has been leading the talks, held discussions with politicians and local stakeholders in Pittsburgh, where U.S. Steel has its headquarters, during his latest U.S. trip, but did not meet members of the incoming Trump administration. He declined to comment on whether he had met USW President David McCall during the visit. "We sensed growing support from the local community," Mori said, noting that discussions had shifted to more substantive issues, such as the project's intrinsic value, since the conclusion of the U.S. presidential election. "We are close to 100% confident of closing the deal by the end of the year," he said. Nippon Steel, the world's No.4 steelmaker, has obtained all necessary regulatory approvals outside the U.S., and is awaiting reviews from the Committee on Foreign Investment in the United States (CFIUS) and clearance from the U.S. Department of Justice (DOJ) under antitrust laws. The Japanese steelmaker has promised not to transfer any U.S. Steel production capacity or jobs outside the United States. It has also said it would not interfere in any of U.S. Steel's decisions on trade matters, including decisions to pursue trade measures under U.S. law against unfair trade practices. Trump returns to the White House on Jan. 20, though President Joe Biden has also said U.S. Steel should remain an American-owned company. FINANCING OPTIONS The CFIUS is due to deliver its decision this month. The committee could approve the deal - potentially with provisions to address national security concerns - or recommend that the president blocks it. It can also extend the review period. If approval from U.S. authorities is not granted, the Japanese company is open to pursuing all possible measures, including legal action, to secure the deal, Mori said. To finance the acquisition, Nippon Steel has already raised some funds via hybrid financing and sold some assets, part of an effort to strengthen its financial position. "We have a number of options for permanent financing, including capital increase. We will select the most appropriate financial tools," Mori said. In case the company decides to pursue a secondary share issue, it will not make a significant dilution for the current shareholders, he added. The deal is being closely watched in Japan, a close U.S. ally and its biggest foreign investor. Last month, Japanese Prime Minister Shigeru Ishiba sent a letter to Biden, urging him to approve the acquisition. Mori said the company did not request the letter but acknowledged its significance. "It's important to note that the Japanese government is strongly supporting this deal and closely monitoring the proper procedures. I am very grateful for that." Sign up here. https://www.reuters.com/markets/deals/nippon-steel-committed-us-steel-takeover-aims-close-dec-says-executive-2024-12-04/

2024-12-04 20:21

Dec 4 (Reuters) - Facebook-parent Meta (META.O) , opens new tab said on Wednesday it plans to invest $10 billion to set up an AI data center in Louisiana, in what would be the tech company's largest data center in the world. The hyperscaler data center, which is planned in Richland Parish, is designed to process huge amounts of data required to support digital infrastructure, including artificial intelligence workloads. The development comes a day after Meta said it was seeking proposals from nuclear power developers to help meet its AI and environment goals, adding that it wanted to add 1 to 4 gigawatts of new U.S. nuclear generation capacity starting in the early 2030s. AI computing has led to a massive surge in the energy needs of Big tech companies such as Amazon and Microsoft, sparking a renewed interest in nuclear power. But it will be tough to swiftly meet soaring power demand with just nuclear energy due to an ageing fleet of reactors, an overburdened U.S. Nuclear Regulatory Commission, potential uranium fuel supply obstacles and local opposition. The amount of electricity used by the Meta data center in Louisiana, will be matched by renewable energy for which the tech firm will be working with utility Entergy (ETR.N) , opens new tab. Entergy, which provides electricity to parts of Arkansas, Louisiana, Mississippi and Texas, has two nuclear power plants in Louisiana. The utility previously received legislative approval for investment in transmission and generation to serve Amazon's (AMZN.O) , opens new tab upcoming cloud services facility in Mississippi. Meta expects construction of the Louisiana data center to continue through 2030 with site work beginning in December. Sign up here. https://www.reuters.com/technology/meta-invest-10-billion-louisiana-data-center-2024-12-04/

2024-12-04 20:15

Fed's Beige Book shows slight economic expansion, subdued employment growth Inflation risks linked to potential new tariffs under Trump administration Markets expect Fed rate cut despite sticky inflation Dec 4 (Reuters) - U.S. economic activity has expanded slightly in most regions since early October, with employment growth "subdued" and inflation rising at a modest pace and businesses expressing optimism about the future, the Federal Reserve said on Wednesday in a summary of surveys and interviews from across the country known collectively as the "Beige Book." "Though growth in economic activity was generally small, expectations for growth rose moderately across most geographies and sectors," the U.S. central bank said in its regular temperature check on the economy, drawing on observations from the business and community contacts of each of its 12 regional banks through Nov. 22. "Business contacts expressed optimism that demand will rise in coming months." While growth in most Fed regions was minimal, it was "modest or moderate" in three districts and was "flat or slightly declining" in two others. Descriptions of the employment scene largely echoed what the Kansas City Fed, which prepared the latest report, found across its district: "Hiring activity was subdued as few contacts reported adding headcount recently and nearly all businesses reported worker turnover was abnormally low." Most districts also reported that employee wage growth was moderate and would continue being so, with many reflecting the St. Louis Fed's findings that "contacts expect wages to continue increasing at a similar pace in upcoming months." Inflation was generally reported as moderate, although contacts in several districts referenced upside risk to prices moving forward due to expectations for new tariffs to be imposed by the incoming administration of President-elect Donald Trump. "(A) significant number of firms expressed the concern that tariffs would drive prices higher. The trimmed mean for inflation expectations was 3.3% for all firms in the fourth quarter of 2024 - up from 3.0% in the third quarter," the Philadelphia Fed reported. The findings will help shape Fed policymakers' thinking about how fast and how much further they may need to lower the policy rate, which is currently in the 4.50%-4.75% range after reductions in September and November. The Fed's last rate-setting meeting of the year is in two weeks, and financial markets are betting it will deliver a quarter-percentage-point cut in borrowing costs despite inflation that has proven to be stickier than hoped for. One key measure of underlying price pressures, the 12-month change in the personal consumption expenditures price index stripped of food and energy costs, has been stuck in a range of 2.6% to 2.8% since May, well above the Fed's 2% target. Even so, many Fed policymakers say they remain convinced that inflation is headed back down, particularly with short-term borrowing costs well above the so-called neutral level where they would cease to be a significant drag on the economy. As of September, most policymakers estimated the neutral rate to be no higher than 3.5%. With the labor market still strong but gradually cooling, Fed officials are wary of leaving the policy rate too far above that level for too long. Economists expect a monthly jobs report due out on Friday will show payroll growth rebounded in November after a dismal showing in October when hurricanes in the U.S. Southeast and a since-settled strike at Boeing (BA.N) , opens new tab weighed on hiring. The unemployment rate, however, is forecast to tick up to 4.2% from 4.1%. Sign up here. https://www.reuters.com/markets/us/us-economy-grew-slightly-recent-weeks-fed-survey-says-2024-12-04/