2024-12-03 11:34

PARIS, Dec 3 (Reuters) - French oil major TotalEnergies (TTEF.PA) , opens new tab is close to acquiring vertically-integrated renewable developer VSB Group from private equity firm Partners Group (PGHN.S) , opens new tab for about 2 billion euros ($2.10 billion), Bloomberg News reported on Tuesday. TotalEnergies and Partners Group declined to comment. VSB Group did not immediately reply to a request for comment. Germany-based VSB has a renewables project pipeline of more than 10 gigawatts (GW) across 10 countries, mostly in Europe, and provides services for around 1.4 GW of installed plants. TotalEnergies currently has 24 gigawatts of gross installed renewable capacity, with targets that call for adding 11 GW by next year and reaching 100 GW by 2030. TotalEnergies CEO Patrick Pouyanne last week told Reuters the company would be able to meet those green targets, despite pausing future business with Adani Green Energy, which has historically contributed heavily to Total's renewables holdings. The French oil and gas major has been steadily increasing its green portfolio, bucking a trend among European peers to roll back renewable goals amid a drop in profitability and supply chain issues. ($1 = 0.9508 euros) Sign up here. https://www.reuters.com/markets/deals/total-closing-2-bln-euro-deal-renewables-developer-vsb-bloomberg-reports-2024-12-03/

2024-12-03 11:17

Switch to new job market survey unlikely in 2025, ONS says Announcement likely to be viewed as a setback by the BoE Governor Andrew Bailey has criticised data quality LONDON, Dec 3 (Reuters) - Britain's statistics agency cautioned on Tuesday that the shift to its new, improved labour market survey may be pushed back to as late as 2027, dealing a fresh blow to the Bank of England as it tries to assess inflationary pressures in the economy. The Office for National Statistics has struggled to reach respondents for its surveys since the COVID pandemic and is overhauling the way it measures the labour market. The BoE relies on the ONS' labour market data as part of its decision-making process on interest rates. BoE Governor Andrew Bailey said last week that the lack of a clear picture on employment was "a substantial problem". The central bank is closely monitoring Britain's labour market as it considers the timing of its next interest rate cut, after reducing borrowing costs twice this year. There were "a number of potential scenarios" for when the new Transformed Labour Force Survey could be rolled out, the ONS said. "Transitioning in mid-2025 is now unlikely, given current quality concerns," the ONS said in an update on the process. "Aiming to complete this process in 2027 would allow us time to implement the shorter survey with further periods of parallel run" with the existing LFS, it said. "We are continuing to explore options to minimise the time frame to transition." The agency said it was testing a shorter survey to boost response rates and potentially halve response times to 15 minutes, as well as undertaking more fieldwork. It is also exploring mandatory participation in the LFS, as is the practice in some European countries. An update on the timings would be announced in early 2025, the ONS said. INACTIVITY RATE STILL ABOVE PRE-COVID LEVELS The Resolution Foundation, a think tank, said last month that the official labour market data may be failing to count almost one million people who are in work, while overstating the size of the country's problem with people dropping out of the labour market altogether. But the ONS said a problem with people leaving Britain's labour market appeared slightly less acute than previously thought as it adjusted its calculations based on new population estimates. The inactivity rate - which measures people not in work and who are not looking for it - was estimated at 22.1% in the April-to-June period, compared with a previous estimate of 22.2%, the ONS said. However, Britain's inactivity rate remains above the 20.8% where it stood immediately before the pandemic, according to the ONS data, in contrast to other countries where it is now lower. The agency also published new estimates for Britain's employment and unemployment rates. The re-weighted employment rate was estimated at 74.6% in the new data, versus 74.5% previously, while the unemployment rate was unchanged at 4.2%. Britain's productivity problems appeared worse than previously estimated as the ONS revised down estimates of growth for output per hour worked to minus 0.9% from minus 0.3% for the three months to June compared with a year earlier. Sign up here. https://www.reuters.com/world/uk/uk-statistics-office-trims-its-estimate-labour-market-inactivity-2024-12-03/

2024-12-03 11:16

FTSE 100 up 0.7%, FTMC 250 up 0.5% EasyJet jumps on PT raise Dec 3 (Reuters) - The UK's benchmark FTSE 100 extended gains on Tuesday as a rise in oil prices lifted the heavyweight energy shares, while EasyJet jumped to a near eight-month high after multiple brokerages raised their target price on the budget airline. The blue-chip FTSE 100 (.FTSE) , opens new tab rose 0.7%, while the midcap FTSE 250 (.FTMC) , opens new tab was up 0.5% to its highest level since Oct. 30 at 1000 GMT. The benchmark index notched a six-week high in the previous session. The energy sector (.FTNMX601010) , opens new tab provided a major boost as it gained 1.7% after oil prices nudged higher ahead of the outcome of an OPEC+ meeting later this week. Miners Rio Tinto (RIO.L) , opens new tab, Antofagasta (ANTO.L) , opens new tab and Glencore (GLEN.L) , opens new tab advanced between 1% to 2.1%, with copper prices rebounding following a sell-off in the last session. Among individual movers, British budget airline EasyJet (EZJ.L) , opens new tab gained 4% to the top of the blue-chip index, as multiple brokerages including Morgan Stanley raised target price on the stock. Marston's (MARS.L) , opens new tab jumped 7% after the pub group said its Christmas bookings were running ahead of last year, following a 64.5% jump in annual profit, driven by a rise in food and drink sales. SSP Group (SSPG.L) , opens new tab rose 10.6% as the Upper Crust owner reported a 23% jump in annual profit, in line with market expectations, partly buoyed by robust performance in North America and UK markets. Victrex PLC (VCTX.L) , opens new tab was the biggest gainer on the midcap index, soaring 14%, following its full-year earnings report. Meanwhile, British retailers reported lacklustre sales in November, according to industry data on Tuesday, affected by the timing of the Black Friday sales, although it still pointed to weakening consumer confidence. Remarks from Bank of England's Philippe Lintern on the Global FX Code are also due on the day. Investors were also monitoring the political turmoil in France as the government there teetered on the brink of collapse. Sign up here. https://www.reuters.com/markets/europe/uks-ftse-100-jumps-energy-boost-2024-12-03/

2024-12-03 11:14

GM could eventually benefit from eased pollution rules but faces immediate harm from Trump EV, trade policies Loss of $7,500-per-car EV subsidy could hurt sales as GM expands electric line-up Trump tariffs could put a 25% tax on hundreds of thousands of GM vehicles built in Mexico Dec 3 (Reuters) - It might seem like U.S. President-elect Donald Trump’s plan to gut automotive emissions restrictions and fuel-efficiency standards would be a boon to General Motors (GM.N) , opens new tab, America’s leading purveyor of full-sized trucks and SUVs and its biggest tailpipe polluter. Yet GM has emerged as Detroit's biggest potential loser from Trump’s expected automotive-policy shifts. The automaker may eventually realize moderate benefits from eased pollution restrictions. But GM faces immediate and severe threats from the incoming administration’s plans to end a $7,500 consumer electric-vehicle subsidy, first reported by Reuters, and to slap a 25% tariff on imports from Canada and Mexico. GM is among the most exposed companies on both fronts because of its aggressive EV investments and its extensive manufacturing of U.S.-market vehicles in these neighboring nations. GM did not comment on how Trump policies would impact its business but said in a statement that it would be a "constructive partner" on auto-industry issues. The automaker's plight underscores the broader industry challenge of strategic planning for an existential clean-energy transition — in a capital-intensive business where product development takes years — while navigating regulatory upheaval from election to election. Trump has argued that lowering pollution standards and ending EV subsidies would “save” the U.S. industry from a job-killing “EV mandate” by Democratic President Joe Biden. But allowing more emissions won’t necessarily enable GM to sell more of its most profitable and polluting trucks, a mature business it already fully exploits: Full-sized trucks and SUVs accounted for more than 40% of its deliveries through the third quarter of 2024, company data shows. Neither can GM abandon its billions of dollars in investments aiming to fully electrify its fleet by 2035, industry analysts said. Ending EV subsidies would come at a particularly bad time for GM because it finally has a wide array of electric offerings, from its luxury Cadillac Lyriq to its mass-market Chevrolet Equinox, said Morningstar Research Services analyst David Whiston. “It’s too simplistic to say: ‘They’ll be fine to sell trucks and SUVs,’” he said. “You can’t just turn off all the battery plants and forget about EVs.” GM must also consider consumer and regulatory trends worldwide, for instance in China, where EVs and hybrids now account for half of cars sold. GM and all other foreign automakers are rapidly losing sales in the world’s largest auto market to homegrown EV makers that are heavily subsidized by China’s government. GM CEO Mary Barra said in July that its money-losing China business, once a profit engine, had become “unsustainable” without a restructuring. Europe, a market GM recently re-entered with an all-electric lineup, also likely will continue policies promoting rapid EV adoption. "EV penetration is a long-term objective,” GM CFO Paul Jacobson said at an auto conference just after Trump’s election. DOUBLE TROUBLE GM’s Equinox EV, its most affordable electric model, starting at $34,995, faces losing the $7,500 subsidy and also getting hit with Trump’s tax on imports. The vehicle is built in Mexico, along with the slightly bigger and pricier Chevrolet Blazer EV. GM’s core truck business could also get heavily taxed: About half of the more than 750,000 vehicles GM expects to import this year from Mexico and Canada are full-sized, gasoline-powered pickups, according to business-analytics firm GlobalData. GM's stock dropped 9% on Nov. 26, the day after Trump posted his tariff threat on social media. Detroit auto executives and analysts told Reuters they don’t yet know how seriously to take Trump’s tariff threat, which he described as retaliation for an “invasion” of “Illegal Aliens” and drug traffickers. Despite Trump’s repeated claims that foreign nations pay U.S. tariffs, such taxes are paid by U.S. importers, including automakers. U.S. companies must either absorb tariff costs by cutting profits or raising consumer prices, or avoid them by shifting production to other nations. The Trump transition team said in a statement that his tariffs would create jobs, raise wages and protect workers from the “unfair practices of foreign companies and foreign markets.” Trump's team did not comment on his auto-emissions and electric-vehicle policies. GM produces the most vehicles among Detroit automakers in Mexico and Canada, although the tariffs could also hit Stellantis hard, according to a Barclays bank analysis. Both automakers produce more than a third of their North American fleets in the two countries, which are also major suppliers of U.S. vehicle parts. REGULATORY REPRIEVE? GM could get some regulatory relief if Trump eases emissions restrictions the Biden administration enacted last spring. Biden’s rules would phase in stricter limits between 2027 and 2032 to boost the EV transition. Ditching those rules could potentially extend the life of GM’s gasoline-truck lineup and lower future compliance costs; the automaker has historically had to buy regulatory credits from other manufacturers, including Tesla, because its fleet has exceeded emissions limits. But GM’s regulatory risks remain high. Future administrations beyond Trump could crack down on pollution, and California and more than a dozen other states already have stricter emissions standards than the federal government. California plans all light-duty vehicles to be EVs, plug-in hybrids or hydrogen fueled by 2035. This year, GM surpassed Stellantis as the automaker with the highest average emissions per-vehicle-mile, according to preliminary EPA data for the top 14 manufacturers selling cars in the United States. Gas-powered trucks and SUVs drive GM’s current earnings before interest and taxes, expected to hit more than $14 billion this year, up from $12.4 billion last year. And large trucks are among the most difficult models to convert to battery power. “If you just try to rely on the cash cow, it works until it no longer works,” said Jeff Alson, a veteran former EPA engineer who helped craft the Obama administration’s vehicle-emissions regulations. UNCERTAIN ELECTRIC FUTURE GM has historically invested more aggressively in EVs than its Detroit rivals. Yet EVs accounted for just 4% of GM sales through the third quarter, compared to an 8% share for the U.S. market overall, up just slightly from 7% during the same period last year, according to Cox Automotive data. GM promises investors that its big bets will soon pay off with its next-generation EVs. GM currently sells 10 U.S.-market EVs, including commercial vans, compared to Ford’s three and Stellantis’ two. GM CFO Jacobson acknowledged in October that GM has plowed far more money than some competitors into EV development. “We dug a bigger hole very intentionally” to build a foundation in manufacturing and battery technology, he told investors just before Trump’s election. Jacobson said GM expected to narrow its EV losses next year by $2 billion to $4 billion, without disclosing its total annual losses. Jacobson stuck by the prediction when questioned about it after Trump’s election at a conference, saying the wide range accounted for EV demand uncertainty. GM wanted to “make sure that we don’t overpromise,” Jacobson said. “Ultimately, the consumer is going to determine our volume of production.” Sign up here. https://www.reuters.com/business/autos-transportation/why-gm-could-suffer-under-trump-policies-save-detroit-automakers-2024-12-03/

2024-12-03 11:09

A look at the day ahead in U.S. and global markets from Mike Dolan Wall Street stocks are grinding out new records as U.S. growth continues to outperform, interest rate cut optimism has been rekindled at the margins and investors raise eyebrows at overseas turbulence in French politics and Chinese trade. U.S. equity indexes (.SPX) , opens new tab seem to be basking in a post-election, year-end glow that's seen volatility gauges (.VIX) , opens new tab subside to their lowest levels since July - with the VIX 'fear index' now some six points below its historical averages. Although U.S. manufacturing remains in the doldrums, the latest survey from ISM showed the contraction moderating - in marked contrast to equivalent European surveys released earlier. As the factory gloom lifts, overall growth estimates are back on the rise - with the Atlanta Federal Reserve's 'GDPNow' model putting the annualised expansion in the current quarter at almost 3.2% - faster than the 2.8% recorded for Q3. And even though Treasury yields perked up a bit on Tuesday, long-dated borrowing costs have plunged by more than 25 basis points over the past fortnight, perhaps in part as a backwash from rising overseas growth worries due to fears of a looming global trade war. Through the noise, Fed comments overnight seemed to encourage hopes for another rate cut this month, nudging futures pricing up to show almost a 75% chance of another move. "As of today, I am leaning toward continuing the work we have started in returning monetary policy to a more neutral setting," Fed Governor Christopher Waller said. "Cutting again will only mean that we aren't pressing on the brake pedal quite as hard." Fed Chair Jerome Powell is set to add his voice to the debate with public remarks in New York on Wednesday, just as the week's big labor market updates stream in, starting with today's October job openings report. ATTENTION ON FRANCE But market attention in Europe was squarely on France, as it looks likely the standing government there could fall this week as it faces a 'no-confidence' vote as soon as Wednesday due to the ongoing parliamentary impasse over the annual budget. French government bonds are underperforming, with the 10-year yield spread over German equivalents on Monday touching the widest since the height of the euro crisis 12 years ago. But while the debt is underperforming surging German bunds and other euro peers, French government borrowing rates have actually been tumbling nonetheless - with 10-year nominal yields down almost 25bps over the past month and off almost half a percentage from midyear peaks. That defuses the sense of crisis on the financial side at least, even if wider spreads are irksome to the relative funding costs of French banks. French stocks (.FCHI) , opens new tab and the euro caught a break on Tuesday, both bouncing back a touch, and the French/German debt spread compressed a bit too. Even if the French government does fall due to far right and far left votes against it this week, a basic holding budget can still be pushed through this month, while another election can't be held until the middle of next year. Part of the reason for sinking borrowing costs overall is that political stalemate in Paris - together with expected German elections early next year - just adds to regional growth worries, already heightened by trade war worries, auto sector troubles and geopolitical tensions. And all of that just heaps pressure on the European Central Bank to keep cutting rates further, possibly even raising the size of those cuts this month. ECB board member Piero Cipollone said on Tuesday that U.S. President-elect Donald Trump's planned tariffs would both lower euro zone economic growth and inflation. Those tariff worries are all the greater in China, already hit by another round of chip sector investment curbs by the outgoing Joe Biden administration this week. With expectations of another round of monetary easing from the Chinese central bank mounting and Chinese 10-year debt yields below 2% for the first time, the offshore yuan is tumbling against the dollar and hit its weakest level of the year on Tuesday. China's main stock indexes (.CSI300) , opens new tab initially fell as chipmakers wobbled on the latest U.S. clampdown, but then rallied at the close. The focus is also shifting to Chinese retaliation. On Tuesday, China said it will ban exports to the U.S. of items related to gallium, germanium, antimony and superhard materials that have potential military applications. U.S. stock futures were steady to higher ahead of the bell, retaining the bulk of the latest push to new records. Key developments that should provide more direction to U.S. markets later on Tuesday: * US October JOLTS job openings data, Brazil Q3 GDP, Mexico October jobless * Federal Reserve Board Governor Adriana Kugler and Chicago Fed President Austan Goolsbee speak * Allied foreign ministers meet at NATO headquarters in Brussels * US corporate earnings: Salesforce Sign up here. https://www.reuters.com/markets/us/global-markets-view-usa-2024-12-03/

2024-12-03 10:52

LONDON, Dec 3 (Reuters) - Sterling gained against the dollar on Tuesday after dovish comments from Federal Reserve Governor Christopher Waller and was steady against the euro as political turmoil in France kept investors on edge. The pound was last up 0.16% at $1.2678, recovering some of Monday's 0.7% loss. In the last three months, the pound has fallen 3.33% against the dollar. Waller, a U.S. rate-setter, said on Monday that with inflation still forecast to fall to 2%, he is inclined "at present" to support another interest rate cut later this month. Markets are now pricing in a 70% likelihood of a 25 basis point rate cut at the Fed's next meeting on Dec. 18, compared to about 50% just over a week ago. In Europe, investors remained cautious after French opposition parties from both the far-right and the left-wing submitted no-confidence motions against Prime Minister Michel Barnier on Monday. Barnier will likely face the vote on Wednesday after fierce opposition from across the political spectrum to his budget, which contains painful tax rises and spending cuts aimed at repairing the country's precarious finances. The pound traded flat against the euro at 83 pence after gaining 0.12% on Monday. Investors are largely expecting the Fed and the European Central Bank (ECB) to cut interest rates this month but anticipate that the Bank of England (BoE) will leave UK rates unchanged on Dec. 19. Fiona Cincotta, senior market analyst at City Index, said the BoE is not showing signs of moving quickly on rate cuts, benefiting the pound, while the ECB might have to cut rates more rapidly. "There's political stability (in the United Kingdom) that is just not present in major economies in the euro zone," Cincotta added. Earlier on Tuesday, the British Retail Consortium said UK retailers reported lacklustre sales in November, based on industry data. The timing of the Black Friday shopping event this year meant it fell beyond the scope of the November data and will show up instead in the December numbers, which partly accounted for the weakness in consumer spending, according to the BRC. Sign up here. https://www.reuters.com/markets/currencies/sterling-picks-up-versus-dollar-flat-against-euro-2024-12-03/