2024-11-25 18:58

TKSE to cut 11,000 of its 27,000 workforce Production cuts planned to adapt to future market Union vows 'fierce resistance' DUESSELDORF, Nov 25 (Reuters) - Thyssenkrupp's (TKAG.DE) , opens new tab steel business plans to cut some 40% of its workforce over the coming years, it announced on Monday in the latest painful overhaul of a German industrial giant, with workers promising fierce resistance. Germany's largest steelmaker, a division of Thyssenkrupp AG, is under pressure from cheaper Asian competitors, high power prices and a weakening global economy, leading to operating losses in four of the past five years. Under the restructuring, Thyssenkrupp Steel Europe (TKSE), which has a workforce of 27,000, said it would cut 11,000 jobs in total - 5,000 of which would be axed by 2030 and another 6,000 shed through spin-offs or divestitures. The goal is to reduce personnel costs by some 10% on average in the coming years. "Urgent measures are required to improve Thyssenkrupp Steel's own productivity and operating efficiency, and to achieve a competitive cost level," the company said in a statement. Under the plan, TKSE's plant in Kreuztal-Eichen, which employs 500 people, is to close. The company also hopes to shed its stake in another plant in Duisburg - although if that sale is not achievable TKSE has said it would hold talks with other shareholders about closure scenarios. Thyssenkrupp Steel said it wants to adapt to "future market expectations" by reducing production capacity from 11.5 million metric tons a year to between 8.7 and 9 million tons. INDUSTRIAL WOES "Anyone who wants to cut over 11,000 jobs and close a site must expect fierce resistance from IG Metall," said Knut Giesler, head of the IG Metall union in North Rhine Westphalia, Germany's industrial heartland and the home state of Thyssenkrupp. The company's steel-making roots date back to the early 1800s. Economy Minister Robert Habeck said German-made steel should be protected, while standing by Germany's commitment to secure the sector's future with more climate-friendly production. "We stand by this clear commitment (to a climate-friendly transition). It is important that steel is also produced in future," Habeck said in response to the planned cuts. Germany's industrial star has been fading in recent months as production slows, foreign demand ebbs and costs rise. Other big German companies are considering shutting down factories. Last week, workers and management at carmaker Volkswagen (VOWG_p.DE) , opens new tab held a third round of crunch talks over pay cuts and possible factory shutdowns in Germany. Earlier this month, Thyssenkrupp wrote down the value of its steel division by another 1 billion euros ($1.1 billion), blaming the sector's worsening outlook. TKSE is now valued at 2.4 billion euros in the group's books, less than half what it was worth two years. Sign up here. https://www.reuters.com/markets/commodities/loss-making-thyssenkupp-steel-slash-5000-jobs-by-2030-2024-11-25/

2024-11-25 18:35

Companies balk at latest $4.1 million bill for legal charges Judge rebukes Weil Gotshal, Evercore for handling of auction No final bid recommendation after four extensions to negotiate HOUSTON, Nov 25 (Reuters) - Court advisers have billed nearly $30 million for a stalled auction of shares in a parent of Venezuela-owned oil refiner Citgo Petroleum, raising the ire of creditors that have waited years to get compensation. Citgo, the crown jewel of Venezuela's overseas assets, sits at the center of a Delaware court auction in which 18 companies seek to collect up to $21.3 billion for debt defaults and expropriations in the South American country. Bids in the auction's second round were submitted this year, and the advisers, including an officer appointed by the court to oversee the process, were to deliver a recommended winner in July. The advisers went on to negotiate exclusively with an affiliate of investor Elliott Investment Management, which has resulted in a bid opposed by many creditors as deficient. Four creditors in a court filing challenged the advisers' $4.1 million bill for September, saying fees "have increased by a staggering amount" and were likely to go higher. The latest bill is five-and-a-half times the fees for September 2023 and includes costs for more than 70 law firm employees, with individual charges up to $2,350 an hour. Rusoro Mining (RML.V) , opens new tab, which has a pending $1.48 billion claim in the case, also criticized the advisers' reworking of one proposal, calling the result neither "a material improvement or a helpful development." U.S. Judge Leonard Stark last week rebuked law firm Weil, Gotshal & Manges, investment banker Evercore and court official Robert Pincus for not following his rules in their dealings with Elliott affiliate Amber. Representatives for Weil, Evercore, and Pincus did not reply to requests for comment. Stark proposed to redirect the auction, leave behind one of the red lines set by Amber, provide bid details to the 18 companies and provide them a say in how proceeds are to be distributed. Amber has threatened to walk away if the auction proceeds as Stark has indicated he wants it to go. An Amber spokesperson did not have an immediate comment. The revised process is expected to lead to at least two bids once Citgo reopens access to its financial and operational data. The winner could receive three U.S. oil refineries, energy pipelines, distribution terminals, and fuel supply to 4,200 retail outlets. Groups involved in the auction have repeatedly told Pincus that he "should stop wasting time and money pursuing Elliott's non-viable and inadequate bid," an attorney for Venezuela wrote to the court. Sign up here. https://www.reuters.com/business/energy/soaring-legal-fees-snarled-citgo-auction-rankle-companies-2024-11-25/

2024-11-25 16:10

Nov 25 (Reuters) - Deutsche Bank on Monday set 7,000 points as the target for the S&P 500 index (.SPX) , opens new tab by the end of 2025, saying it expects robust earnings growth to continue into the next year among other factors. Earlier in the day, Barclays raised its 2025 forecast for the index (.SPX) , opens new tab to 6,600 from 6,500, on the back of a resilient U.S. economy, gradual decrease in inflation and robust potential earnings growth of mega-cap technology companies. Deutsche Bank's forecast represents an upside of 17.27% from the index's close of 5,969.34 on Friday, with Barclays' forecast 10.56% higher. "For U.S. equities, we think macro positives outweigh the negatives heading into next year," analysts at Barclays wrote in a note. The U.S. Federal Reserve is expected to continue its monetary policy easing cycle, while the uncertainty post the U.S. presidential election has been resolved and jobless rate remains low, Barclays said, which could together boost the benchmark index. Last week, both Goldman Sachs and Morgan Stanley forecast the index could touch 6,500 by 2025-end, banking on continued growth in the U.S., stronger corporate earnings and the Fed's rate-cut path. Deutsche Bank analysts said from a demand-supply perspective the U.S. equity market remains solid, with drivers of the last two years – large inflows and strong buybacks – continuing into 2025. The brokerage also sees earnings-per-share (EPS) growth for the index at $282 in 2025. Big Tech companies will continue to drive S&P 500 earnings, said Barclays, which raised the benchmark index's EPS estimate to $271 from $268. "We expect most sectors to be impacted by disinflationary margin pressure and slowing ex-US growth in 2025, while Big Tech continues offsetting to the upside," Barclays noted. Sign up here. https://www.reuters.com/business/finance/barclays-raises-2025-sp-500-index-forecast-6600-6500-2024-11-25/

2024-11-25 13:35

Nov 25 (Reuters) - Canadian factory sales most likely rose 1.3% in October from September, largely driven by higher sales in petroleum and coal product as well as transportation equipment subsectors, Statistics Canada said in a flash estimate on Monday. The estimate was calculated based on a weighted response rate of 67.8%. The average weighted response rate for the survey over the previous 12 months has been 94.0%. NOTE: All figures are seasonally adjusted. Keywords: CANADA ECONOMY/MANUFACTURING Sign up here. https://www.reuters.com/markets/canada-oct-factory-sales-most-likely-up-13-statscan-flash-estimate-2024-11-25/

2024-11-25 13:24

Nov 25 - Donald Trump’s win in the recent U.S. presidential election has, unsurprisingly, been a boon for U.S. equities. But his victory may ultimately prove to be the catalyst that the rest of the world needs to end the U.S. market’s long record of outperformance. This may sound illogical. At least that’s what Morgan Stanley, Goldman Sachs, JP Morgan and many other major brokers would likely say. They’re all calling for continued outperformance by U.S. equities in 2025. At first glance, their forecasts make sense. U.S. equities have outpaced their peers for the better part of 15 years after hitting a low during the Global Financial Crisis in 2009. That trend has only accelerated since Trump’s arrival on the political scene. The U.S. equity weighting in MSCI’s All Country World Index (ACWI) has gone from around 50% when Trump first took office to more than 65% today – a record high. Investors are clearly heeding this message. U.S. retail buying post-election has been the strongest in almost three years, while foreign purchases of U.S.-listed ETFs have hit a new high. These investors are likely counting on a repeat of Trump 1.0, with tax cuts and deregulation driving strong economic growth and a booming stock market. But here’s where the story gets a little tricky. When Trump was inaugurated in 2017, U.S. stocks were trading below their long-term average at roughly 16x forward earnings. Today, they’re priced for perfection at almost 23x. Back then, inflation wasn’t a major concern and interest rates were under 2.0%. Today, inflation remains above the Federal Reserve’s 2.0% target, despite falling significantly over the last two years. And the yield on the 10-year U.S. Treasury is currently around 4.45%, roughly 200 basis points higher than the level in 2017. Perhaps most importantly, the U.S. fiscal deficit is roughly double what it was when Trump first entered the Oval Office. It currently hovers around 6% and is poised to go higher. How much higher depends on many variables, including whether Trump actually follows through on his campaign promises. But, if taken at face value, a platform of massive tax cuts, huge tariffs and mass deportations certainly doesn’t sound deficit-friendly, and the proposed spending cuts are unlikely to be a panacea. And given the huge deficit, elevated interest rates, and general skittishness around inflation, markets may not respond so kindly this time around if the president starts to implement some of his more unorthodox policies. REST OF THE STORY So what does this mean for the other two major global markets: China and Europe? Trump’s policies – particularly the threat of wide-sweeping tariffs – could certainly impair trade and growth globally. But they could also be the catalyst for long-needed positive policy action in both China and Europe. China has a bit of a head start. It’s already busy injecting both fiscal and monetary stimulus into its economy, and, importantly, it’s seeking to boost domestic consumption while competing on advanced technologies such as artificial intelligence and electric vehicles. It has also been broadening its trading partners in recent years. In fact, it currently exports more to Southeast Asia than to the U.S. All of these trends are likely to accelerate following Trump’s re-election. LIFTING THE BRAKE In Europe, leaders have long known that the bloc needs to improve its competitiveness. (Just look at the lengthy report recently published by former European Central Bank president Mario Draghi.) But action tends to take a little longer in a 27-country collective. Much will depend on Germany, the largest economy in the euro zone and the most vulnerable in a trade war. It’s soon set to have elections. No matter who wins, Berlin will have plenty of fiscal room to stimulate its economy. The question is whether it removes the ‘fiscal brake’ that’s stopping it from using this space. The spectre of Trump 2.0 may tip the scale. Meanwhile, Europe is already expected to see its economic growth accelerate next year, while the opposite is true for the U.S., according to various broker forecasts. The ECB’s rate-cutting cycle is also less likely to be held hostage to politics than the Fed’s. But investors are sticking with the U.S. for now. Chinese equity valuations are close to record lows both on an absolute basis and relative to the U.S. And Europe has sold off as the consensus Trump trades have led to a record valuation gap with the U.S. Experienced investors know that valuation gaps don’t close on their own. What they need is a catalyst. We may have it. Jay Pelosky , opens new tab is the Founder and Global Strategist at TPW Advisory, a NYC-based investment advisory firm. (The opinions expressed here are those of the author, a columnist for Reuters.) Sign up here. https://www.reuters.com/markets/us/look-outside-us-next-trump-trade-jay-pelosky-2024-11-25/

2024-11-25 13:02

MOSCOW/LONDON, Nov 25 (Reuters) - OPEC+ will hold its Dec. 1 oil policy meeting online, two OPEC+ sources said on Monday, with the producer group set to discusss a further delay to plans to raise output. OPEC+, which comprises the Organization of the Petroleum Exporting Countries (OPEC) and allies such as Russia, might again push back output increases because of weak global oil demand, OPEC+ sources told Reuters last week. Both of the sources on Monday declined to be identified by name. OPEC, which has not specified the format of the meeting, did not respond immediately to a request for comment. When the full OPEC+ group held its last policy meeting in June, most ministers attended online. However, those from the small group of eight countries that are making the group's most recent round of voluntary oil ouput cuts held a last-minute in-person meeting in Riyadh, the Saudi capital. One OPEC+ source said there was a possibility of a similar meeting taking place this time in one of the Gulf countries, though no plan for such a gathering had been circulated. Sign up here. https://www.reuters.com/markets/commodities/opec-hold-dec-1-oil-policy-meeting-online-sources-say-2024-11-25/