2025-10-27 20:17

Indexes up: Dow 0.71%, S&P 500 1.23%, Nasdaq 1.86% Investors await high-profile US results, US-China trade talks US-listed Argentina stocks gain after Milei's election Rare earth miner shares fall Oct 27 (Reuters) - Wall Street's main indexes posted record closing highs for the second day in a row on Monday as investors were hopeful about the prospects for a U.S.-China trade deal and looked forward to a week packed with high-profile technology earnings and a widely expected U.S. interest rate cut. U.S. President Donald Trump and his Chinese counterpart Xi Jinping are due to meet on Thursday to decide on a framework that could pause tougher U.S. tariffs and China's rare-earth export curbs, easing market jitters around a trade war and sending Wall Street's "fear gauge" VIX (.VIX) , opens new tab down to a roughly one‑month low. Sign up here. During weekend TV appearances, U.S. Treasury Secretary Scott Bessent talked about agreements around China buying U.S. soybeans and its rare-earth exports after two days of trade talks in Malaysia. Along with the upcoming meeting, Bessent's comments boosted hopes for easing U.S.-China tensions, said Scott Wren, senior global market strategist at Wells Fargo Investment Institute in St. Louis, Missouri. Earnings from five of the "Magnificent Seven" megacap companies - Microsoft (MSFT.O) , opens new tab, Apple (AAPL.O) , opens new tab, Alphabet (GOOGL.O) , opens new tab, Amazon (AMZN.O) , opens new tab and Meta (META.O) , opens new tab - later this week will test the market rally's endurance, which has largely depended on optimism around growth and capital expenditures related to artificial intelligence. "With five of the Mag Seven reporting this week, what the market expects to hear is confirmation that all this AI CapEx is coming through, that the revenues and profits from AI are coming through," said Wren. The Dow Jones Industrial Average (.DJI) , opens new tab rose 337.47 points, or 0.71%, to 47,544.59. The S&P 500 (.SPX) , opens new tab advanced 83.47 points, or 1.23%, to 6,875.16 for its first close above the 6,800 level. The Nasdaq Composite (.IXIC) , opens new tab gained 432.59 points, or 1.86%, at 23,637.46. Among the S&P 500's 11 major sectors, three rallied sharply. Communication services (.SPLRCL) , opens new tab added 2.3% with Alphabet's 3.6% rally leading the way. Technology (.SPLRCT) , opens new tab ended up 2% at a fresh record close, along with the Philadelphia Semiconductor index (.SOX) , opens new tab, which added 2.7%. The biggest advance in tech came from Qualcomm (QCOM.O) , opens new tab, which surged 11% after it unveiled two AI chips for data centers, with commercial availability starting next year. AI chip leader Nvidia (NVDA.O) , opens new tab also rose 2.8% and provided the S&P 500's biggest boost. Consumer discretionary (.SPLRCD) , opens new tab finished up 1.5%, led by Tesla (TSLA.O) , opens new tab which rallied 4.3% on optimism around the U.S.-China talks. But Christopher Brown, Synovus' vice president of investments in private wealth management, said Tesla's rally may be short-lived since the stock is still expensive "even with the best negotiated U.S.-China trade deal." The lagging sectors were consumer staples <.SPLRCS>, off 0.27% and materials (.SPLRCM) , opens new tab, which finished down 0.25%. Shares of U.S.-listed rare earth miners slumped as the prospects for a U.S.-China agreement eased fears of supply disruptions that had boosted the sector this year. Shares of Critical Metals CRML.O , opens new tab ended down 13.7%, while NioCorp Developments NB.O , opens new tab dropped 11.5% and Ramaco Resources METC.O , opens new tab fell 2.6%. U.S.-listed shares of Chinese companies including Alibaba Group Holding , JD.com , PDD Holdings (PDD.O) , opens new tab rallied between 2.7% and 3% while Baidu climbed 4.8%. FED RATE CUT FULLY PRICED IN Cooler inflation data last week all but sealed bets for a 25-basis-point rate cut by the Federal Reserve on Wednesday, and investors will closely monitor Chair Jerome Powell's comments for clues on a December cut, as the U.S. government shutdown holds up key data releases. Among individual stocks, Keurig Dr Pepper (KDP.O) , opens new tab climbed 7.6% after lifting its annual sales forecast and raising about $7 billion to finance its purchase of Dutch coffee giant JDE Peet's. Lululemon (LULU.O) , opens new tab shares rose 1.8% after the sportswear maker announced a partnership with the National Football League. Janus Henderson (JHG.N) , opens new tab shares rallied 11.3% after it confirmed an acquisition proposal from Trian and General Catalyst. U.S.-listed shares of Argentine companies jumped after President Javier Milei's election victory. YPF gained 23.8% while Grupo Supervielle surged 48%, and Banco Macro rose 37.6%. Grupo Financiero Galicia rose 38.7% while Banco BBVA Argentina advanced around 40.8%. Advancing issues outnumbered decliners by a 1.74-to-1 ratio on the NYSE, where there were 659 new highs and 69 new lows. On the Nasdaq, 2,593 stocks rose and 2,145 fell as advancing issues outnumbered decliners by a 1.21-to-1 ratio. The S&P 500 posted 37 new 52-week highs and three new lows while the Nasdaq Composite recorded 132 new highs and 57 new lows. On U.S. exchanges, 19.76 billion shares changed hands, compared with the 20.85 billion moving average for the last 20 sessions. https://www.reuters.com/world/china/wall-st-futures-hit-record-highs-us-china-optimism-tech-results-focus-2025-10-27/

2025-10-27 20:05

Ouattara takes 89.7% of the vote He has presided over period of relatively stability, steady growth Strongest opponents deemed ineligible, voter turnout around 50% Ouattara says he will use new term to pass torch to next generation ABIDJAN, Oct 27 (Reuters) - Ivory Coast President Alassane Ouattara secured a fourth term with a commanding reelection win, according to provisional results announced on Monday, an outcome that was largely expected after his strongest opponents were deemed ineligible. The 83-year-old former international banker won 89.77% of the vote, his third consecutive decisive victory after the much closer election that brought him to power in 2011. Sign up here. His predecessor, Laurent Gbagbo, refused to acknowledge defeat in that race, sparking a four-month war that killed around 3,000 people. Ouattara has since overseen a period of relative stability and steady economic growth in the world's biggest cocoa producer. Former Commerce Minister Jean-Louis Billon, who acknowledged his defeat to Ouattara on Sunday, received 3.09% of the vote, while former first lady Simone Gbagbo received 2.42%, according to the results read on state television by Ibrahime Coulibaly-Kuibiert, president of the electoral commission. Simone Gbagbo called Ouattara on Monday to congratulate him on his victory, a source told Reuters. The turnout of around 50% was comparable to the presidential elections in 2020 and 2015 but far below the 80% who voted in the first round in 2010. Laurent Gbagbo and Tidjane Thiam, former CEO of Credit Suisse, were not legally permitted to run this year, and the remaining opposition candidates lacked the backing of a major political party, making Ouattara the clear favourite. In a statement on Monday, Thiam said the election was "not a real election" and that voting had unfolded in a climate of fear with weak participation. "There was no point in voting. Everything was put in place for Ouattara to win these elections. Candidates Thiam and Laurent Gbagbo were eliminated. There was nothing at stake," said Arsene Kanga, a machinist at a cooking oil production company in Abidjan. Since the war that followed the 2010 election, many Ivorians have soured on political engagement more broadly, said Rinaldo Dipagne, deputy director of the Africa program for International Crisis Group. "People saw that they didn't have a future with politics, or they couldn't imagine that politics would bring positive change to the country," he said. The Constitutional Council is expected to validate the electoral commission's results in the coming days. EYE ON NEXT GENERATION OF LEADERS Ouattara, a former deputy managing director of the International Monetary Fund, has said that in a fourth term he would continue growing the economy and attracting private investment. He also vowed to use a fourth term to facilitate a passing of the torch to a new generation of political leaders. There is no clear successor at the moment and the ruling party is riven with division. If Ouattara fails to appoint one, Dipagne said, the country could face the same kind of crisis that followed the death of founding President Felix Houphouet-Boigny, marked by political vitriol and armed conflict. The election unfolded without major disruption on Saturday, after days of scattered protests in locations including Yamoussoukro, the political capital, where authorities imposed a curfew on Friday night. The government deployed 44,000 members of the security forces and enforced what Amnesty International said was a disproportionate ban on protests. Hundreds were arrested, and the Interior Ministry said dozens had received prison terms of up to three years for offences including disturbing public order. Government spokesperson Patrick Achi, a former prime minister, told Reuters last week that the government protected freedom of speech but was also determined to maintain order. https://www.reuters.com/world/africa/ivory-coast-president-ouattara-wins-re-election-provisional-results-say-2025-10-27/

2025-10-27 20:02

Melissa could be Jamaica's strongest-ever storm Jamaicans, Cubans, brace for direct hit Across Caribbean, hundreds of thousands evacuate Four deaths reported in Haiti, Dominican Republic KINGSTON/HAVANA, Oct 27 (Reuters) - Hurricane Melissa was packing sustained winds of up to 175 mph (282 kph) on Monday afternoon, as the slow-moving Category 5 storm was on course to barrel into Jamaica, in what could be the largest on record for the Caribbean island. As of 2 p.m. (1800 GMT), Melissa was a "catastrophic" storm, the strongest possible on the Saffir-Simpson scale, according to the U.S. National Hurricane Center. The NHC expects Melissa to move over Jamaica late Monday or in the early hours of Tuesday, cross eastern Cuba the following night and move over the Bahamas and Turks and Caicos by Wednesday. Sign up here. The storm's slow movement over unusually tepid Caribbean water had contributed to its ballooning size and strength, NHC forecasters said, threatening Jamaica with days of never-before-seen catastrophic winds and as much as 3 feet of rain. Melissa's wind-span is currently larger than the length of Jamaica, an island roughly the size of Connecticut and whose main airports sit very close to sea level. Hours after ordering mandatory evacuations for parts of southern Jamaica, including the historic town of Port Royal, Prime Minister Andrew Holness called on foreign support and warned of damage to farmlands, homes and infrastructure such as bridges, roads, ports and airports. Despite warnings, some residents told Reuters they were reluctant to leave their homes for fear of looting, and authorities said buses were waiting to be filled up and transport some 28,000 affected by mandatory evacuation orders. "There is no infrastructure in the region that can withstand a Category 5," he said. Holness said his government was as prepared as can be, with an emergency response budget of $33 million and insurance and credit provisions for damage a little larger than those sustained from last year's devastating Hurricane Beryl. Beryl was the earliest and fastest Atlantic hurricane on record to reach Category 5, but scientists warn that storms are becoming stronger faster as a result of climate change warming ocean waters, piling up fuel for seasonal storms. "Tens of thousands of families are facing hours of extreme wind gusts above 100 mph and days of relentless, torrential rainfall," said AccuWeather Chief Meteorologist Jonathan Porter, adding infrastructure damages could hamper the arrival of aid. "Slow-moving major hurricanes often go down in history as some of the deadliest and most destructive storms on record," he added. "This is a dire situation unfolding in slow motion." Jamaica has seen many large hurricanes in the past, including Category 4 Hurricane Gilbert in 1988, but a direct hit from a Category 5 would be unprecedented, said Evan Thompson, of Jamaica's Meteorological Service. Melissa is moving much slower than Gilbert, Jamaica's last major direct hit, Porter added, warning people should prepare to hunker down for days and some communities could be cut off for weeks. 'WE CAN'T MOVE' Damian Anderson, a teacher from Hagley Gap, a town nestled in Jamaica's soaring Blue Mountains, said impassable roads had already cut off his community. "We can't move," Anderson, 47, said. "We're scared. We've never seen a multi-day event like this before." Nearby Haiti and the Dominican Republic have already faced days of torrential downpours leading to at least four deaths, authorities in those island nations said. In Haiti, impoverished by years of gang violence, more than 3,650 residents in southern parts of the country moved into temporary shelters, authorities said, as they suspended flights to and from the southern peninsula and banned sailing. Bahamian Prime Minister Philip Davis also ordered evacuations for people in southern and eastern parts of the archipelago, while much of eastern Cuba battened down ahead of Melissa's expected landfall. Cuban authorities said they had evacuated upwards of 500,000 people living in coastal and mountainous areas vulnerable to heavy winds and flooding, and canceled schools and transport across eastern Cuba. More than 250,000 people were brought to shelters around Santiago de Cuba, the island's second-largest city, which lies squarely in the crosshairs of the hurricane's predicted path. https://www.reuters.com/business/environment/hurricane-melissa-begins-lashing-jamaica-catastrophic-category-5-storm-2025-10-27/

2025-10-27 19:52

China-backed RCEP, world's largest trade bloc, holds rare summit Canada's Carney expects to meet Xi this week, open to meeting Trump Lula says trade deal 'guaranteed' after Trump meeting Europe, Japan concerned over China rare earth controls European Council's Costa says China delegation to visit Brussels KUALA LUMPUR, Oct 27 (Reuters) - China pressed on Monday for open trade and stronger economic ties at a regional summit in Malaysia dominated by the shadow of steep U.S. tariffs, as Canada's premier expressed readiness to meet U.S. President Donald Trump to defuse trade tensions. A day after Trump's six-hour blitz of meetings and trade announcements at the Association of Southeast Asian Nations summit in Kuala Lumpur, Chinese Premier Li Qiang called on regional leaders to uphold free trade and oppose protectionism, a phrase China has used to call out Trump's tariffs. Sign up here. "We must fully safeguard the hard-earned peace and stability in East Asia," Li said at a meeting of ASEAN, Japan, China and South Korea. He urged countries to "uphold free trade and the multilateral trading system, oppose all forms of protectionism, and continuously advance regional economic integration". In a flurry of deal-making on his first stop of a five-day tour of Asia, Trump on Sunday oversaw the signing of an expanded ceasefire he brokered between Cambodia and Thailand and trade framework agreements with four countries, none of which reduced import tariffs, though they left room for exemptions. 'READY TO SIT DOWN WITH UNITED STATES' Canada's Prime Minister Mark Carney on Monday said his government was working to secure trade deals in the Indo-Pacific and expected to meet Chinese President Xi Jinping on the sidelines of the APEC meeting in South Korea this week. Carney said he was also open to meeting Trump, who has been incensed over a tariff-related Ontario political ad that has complicated their delicate trade negotiations. "We stand ready to sit down with the United States, myself, with the president, my colleagues, with their colleagues, when the U.S. is ready to sit down," Carney told a press conference, adding he had not seen specifics on the additional 10% that Trump said he would impose on Canadian goods following the ad. But while en route to Japan on Monday, Trump said he did not want to meet Carney, adding, "I’m not going to be meeting with him for a while." Brazilian President Luiz Inacio Lula da Silva on Monday struck a positive tone on his country's tariff tensions with the United States and said his meeting with Trump a day earlier "guaranteed" a more favourable trade deal than the current 50% tariff on Brazilian goods. "I told him it was extremely important to take into account Brazil's experience as the largest country in South America," Lula, as he is popularly known, told a press conference. RCEP HOLDS RARE SUMMIT, SEEKS FASTER EXPANSION While China's premier and leaders of Brazil, Canada, the European Council and the 11-strong ASEAN bloc were at events seeking to solidify economic partnerships and hammer out trade pacts, the United States was represented on Monday by two lower-profile officials in Kuala Lumpur. The China-backed Regional Comprehensive Economic Partnership, comprised of ASEAN states, Australia, Japan, New Zealand and South Korea, held its first summit since 2020 and called for wider trade efforts and the faster addition of new members. The world's largest trading bloc, RCEP covers about 30% of global gross domestic product and is touted by some analysts as a potential buffer against U.S. tariffs. European Council President Antonio Costa said the European Union would look to finalise trade agreements with Malaysia, Thailand and the Philippines soon. Costa met China's Li and said he conveyed strong concern about Beijing's expansion of export controls on critical raw materials and said a high-level delegation from China would be in Brussels in the coming weeks. Beijing controls more than 90% of the world's supply of rare earth materials, essential for high-tech manufacturing, including electric vehicles, semiconductors and missiles and the issue has also been a major sticking point in its trade war with Washington. "We are very concerned about the trade relationship with China, especially the recent measures that China adopted," Costa told reporters, adding, "we hope to address these in the proper way." Japan's foreign ministry also expressed concerns over China's curbs and questioned its rhetoric on wider trade. "They have imposed or tried to impose export restrictions on rare earths that have had a great impact on the supply chain," spokesperson Toshihiro Kitamura said. "They try to make use of these U.S. tariff issues in order to pretend as if they are the guardian or champion of the free trade system." https://www.reuters.com/world/china/world-leaders-look-build-economic-trade-ties-after-trump-departs-asean-summit-2025-10-27/

2025-10-27 18:42

Block trade bets on tighter SOFR-fed funds spread Trade is a break from SOFR-fed funds trend this year Fed expected to announce end of quantitative tightening NEW YORK, Oct 27 (Reuters) - A sizable block trade in the U.S. rates market late last week appeared to be positioning ahead of the Federal Reserve's expected announcement to finally end its long-running balance sheet reduction program, known as quantitative tightening (QT). CME Group data showed a huge block trade last Thursday of 40,000 contracts that expire in November, a wager that the Secured Overnight Financing Rate (SOFR) - an overnight repo rate - will average less than nine basis points above the expected federal funds rate, the U.S. central bank's benchmark rate, in November. Sign up here. The trade marks a departure from this year's trend and reflects growing expectations that the Fed will announce the conclusion of QT at the end of its policy meeting on Wednesday. SOFR , currently at 4.24%, is the overnight borrowing rate for short-term cash mostly secured by Treasuries as collateral. The fed funds rate , currently at 4.11%, is the cost of unsecured overnight loans banks charge each other to meet reserve requirements. According to traders, the 40,000 contracts suggested that the position would gain or lose roughly $2 million for each basis-point (bp) move in rates. This measure of interest rate risk is known as "DV01." It's a massive position, analysts said, given that the trade's exposure is almost purely a one-month rate spread. Analysts said this trade's rate sensitivity is roughly equivalent to holding $2-$3 billion in 10-year Treasuries. Essentially, the trade implied SOFR will average 3.95% or lower and the Fed's policy rate will be 3.86% or higher in November if the central bank announces the winding down of its QT program and as it follows through with its expected quarter-percentage-point rate cut at its two-day meeting this week. That's in contrast to what the forwards market is suggesting. One-month forwards last Friday showed that traders expect SOFR to trade 10 bps higher than the fed funds rate by the end of November, a record spread, suggesting still tight repo funding conditions. "It's a trade that plays into the view that the Fed will stop QT (this week) and announce new policies to calm funding markets, allowing SOFR to come down from current levels relative to fed funds," said Steven Zeng, U.S. rates strategist at Deutsche Bank. Fed Chair Jerome Powell said on October 14 that the central bank is ready to end QT, citing tighter liquidity conditions, including firmer repo rates. Periods of QT often coincide with higher repo because when Treasuries and agency securities mature, the Fed does not reinvest the proceeds. The Treasury then redeems the debt and pays the central bank by subtracting the required amount from the cash balance it holds on deposit at the Fed. To replenish that cash balance, the Treasury must issue new debt. Investors purchase these new securities using funds from their bank accounts, which in turn reduces the level of bank reserves. This decline in available cash or reserves for overnight lending by banks and money market funds puts upward pressure on repo rates. LOWER REPO RATES AS QT ENDS When QT ends, the reverse happens. The decline in reserves halts, or they may even start to rise as the Fed reinvests maturing securities, leading to more liquidity in the system and lower repo rates. Repo rates have also risen due to the aggressive bill issuance by the U.S. Treasury to build its cash balance after the debt ceiling was lifted over the summer. The increased bill issuance has raised the need for repo financing to absorb all those Treasuries in the market. Jonathan Cohn, head of U.S. rates desk strategy at Nomura, echoed Deutsche's Zeng in attributing the motivation behind the SOFR-fed funds trade to the Fed's balance sheet dynamics. He also noted some expectation that the central bank will most likely "backstop liquidity, say, by injecting reserves back into the system or offering lower rates on their liquidity release operations." Since the middle of October, SOFR has consistently hovered near the upper bound of the Fed's 4.00%–4.25% policy rate range, even briefly exceeding it on two occasions. It has traded above the fed funds rate since August 22 and, prior to that, had outpaced the central bank's benchmark for much of the year. Jan Nevruzi, U.S. rates strategist at TD Securities, believes the CME trade likely wasn't solely driven by QT. Instead, he sees it as a reflection of stretched valuations evident throughout the year, suggesting the investor was probably "fading levels." Ideally, SOFR should trade below the fed funds rate, as it is backed by Treasuries and carries minimal credit risk. In contrast, the fed funds rate reflects unsecured interbank lending, which involves counterparty risk. As a result, lenders in the fed funds market typically demand a slightly higher rate than SOFR to compensate for that risk. Last Friday, however, SOFR was 13 basis points above the fed funds rate - an unusual inversion that underscores shifting forces in short-term funding markets. https://www.reuters.com/business/big-rates-market-trade-envisions-end-fed-balance-sheet-unwind-2025-10-27/

2025-10-27 17:49

MEXICO CITY, Oct 27 (Reuters) - Mexican state energy company Pemex pumped less crude while scaling up its processing in the third quarter, it said on Monday, as it reported a smaller net loss than in the same quarter a year ago. Pemex and its partners pumped an average of 1.66 million barrels per day of crude oil and condensates during the third quarter of this year, down 6.7% from the same period of 2024, a filing with the Mexican stock exchange showed. Sign up here. With many fields declining rapidly - especially former star producers in the Gulf of Mexico - and many new discoveries not living up to expectations, the behemoth has struggled to meet the government's ambitious production goal of 1.8 million bpd. Pemex meanwhile processed an average of 1.01 million bpd in the quarter, 4.8% more than in the same quarter last year. PLANS TO WORK WITH PRIVATE COMPANIES CEO Victor Rodriguez told investors in a call that the company's current plan seeks to increase production with the help of private companies, adding that some 40 companies had expressed interest. Pemex reported that it had selected ten such projects and was evaluating another 11 for these so-called mixed contracts. Much of what the company can realistically do - squeezing more barrels from mature fields and exploring new possibilities - hinges on financial resources. COMPANY NARROWS QUARTERLY NET LOSS Pemex reported a net loss of 61.25 billion pesos ($3.34 billion) for the quarter, from a loss of 161.34 billion pesos a year ago, while revenues in the quarter fell about 11% from a year ago to reach 378.9 billion pesos. It also booked a foreign exchange gain of 33.4 billion pesos during the quarter, driven by the depreciation of the dollar against the peso. In the filing, Pemex said its financial debt totaled $100.3 billion at the end of the quarter, despite efforts from the government to bring it down. Its debt with suppliers and contractors stood at $28.13 billion. During the government of President Claudia Sheinbaum, Pemex aims for net zero new debt, officials reiterated on Monday, adding that the company would shave off another 10% from its financial debt by year-end. ($1 = 18.3147 Mexican pesos at end-September) https://www.reuters.com/business/energy/mexicos-pemex-reports-q3-net-loss-6125-bln-pesos-2025-10-27/