2025-10-14 19:45
WASHINGTON, Oct 14 (Reuters) - U.S. President Donald Trump said his administration planned to produce a list on Friday of "Democrat programs" that will be closed as a result of the ongoing federal government shutdown. He did not specify the programs but indicated to reporters at the White House on Tuesday that the closures would be permanent. Sign up here. Meanwhile, the Senate failed in its eighth attempt to pass legislation approved last month by the House of Representatives that would end the shutdown by providing government funding through November 21. The Senate voted 49-45 to advance the bill, short of the 60 yes votes needed in the 100-member Senate controlled by Republicans. The government shutdown entered its third week with Republican and Democratic lawmakers continuing to blame each other for the impasse. "Only Democrats have made demands, and by the way, very expensive demands" in return for voting to reopen the government, Senate Majority Leader John Thune, a Republican, said in a speech to the Senate on Tuesday. Senate Democrats are pushing to use their legislative leverage of withholding necessary votes for a stopgap funding bill to advocate for healthcare fixes. Senator Tim Kaine, a Virginia Democrat who represents many furloughed federal workers and military personnel, told NPR's Morning Edition on Tuesday it will take Trump engaging with Democrats to end the shutdown. "If the president engages, we can solve this in 48 hours," Kaine said. Some federal workers and military personnel are facing the prospect of missing a paycheck for lack of funds. However, the Trump administration has said that it will redirect some money to avoid any interruptions of troops' pay. Thune did not allow a vote this time on a Democratic alternative, which would reopen the government with temporary funding but also include money to permanently extend a federal healthcare tax credit, which Republicans are opposing. https://www.reuters.com/world/us/trump-says-he-will-unveil-list-friday-democrat-programs-be-shut-2025-10-14/
2025-10-14 19:38
NEW YORK, Oct 14 (Reuters) - The U.S. labor market remained mired in its low-hiring, low-firing doldrums through September, though the economy overall "may be on a somewhat firmer trajectory than expected," Federal Reserve Chair Jerome Powell said on Tuesday. He noted that at policymakers will take a "meeting-by-meeting" approach to any further interest rate cuts as they balance job market weakness with the fact that inflation remains well above their 2% target. Sign up here. Powell also said the end of the central bank's long-running effort to shrink the size of its holdings, widely known as quantitative tightening, or QT, may be coming into view. His comments came from the text of a speech prepared for delivery before a gathering held by National Association for Business Economics in Philadelphia. MARKET REACTION: STOCKS: U.S. stocks were mixed, with the Dow and S&P 500 up on the day, while the Nasdaq was down. BONDS: U.S. Treasury yields fell, with the yield on the benchmark 10-year note slipping to 4.02% and the two-year note down at 4.6%. FOREX: The dollar index slid in wake of Powell's comments, down 0.3% at 99.03. COMMENTS: CALLIE COX, CHIEF MARKET STRATEGIST, RITHOLTZ WEALTH MANAGEMENT, CHARLOTTE, NORTH CAROLINA: "Jay Powell dropped a major piece of news when he mentioned that the Fed could stop culling the size of its balance sheet in the coming months. The Fed has been reducing its runoff for months now, but the idea of a stable balance sheet could help lower yields in the middle to long part of the curve. That’s a hidden source of relief – especially to homeowners – that rate cuts alone may not be able to deliver." "Otherwise, Powell didn't say anything too surprising. He repeated the 'no risk-free path' comment, which I'm guessing will be a buzzy monetary policy phrase for the rest of the year. Both sides of the Fed's mandate are still under threat, even though Powell and company have chosen to focus on unemployment. Inflation worries still linger, and they may stick around until a weaker job market starts to put pressure on wages and spending." "It's a good time to think about your saving, borrowing and investing strategies. Today's environment requires a Swiss Army approach of sorts – deploying cash on market drops (but with an eye towards value) and adding fixed income strategically." CHRIS GRISANTI, CHIEF MARKET STRATEGIST AT MAI CAPITAL MANAGEMENT, NEW YORK: "The Powell speech was somewhat more dovish than I expected. He didn't say anything groundbreaking, but he did emphasize his concern about the slowing job market more than he usually does. Listening to the whole speech, his concerns seemed skewed towards recession rather than inflation. This gave me more confidence in rate cuts coming before the end of the year. Having said that, I am confident that the Fed remains data dependent, and stronger jobs numbers, once we start getting them again, or hot inflation readings could alter this projection. But for now, rates are coming down." STEVE SOSNICK, CHIEF STRATEGIST, INTERACTIVE BROKERS, GREENWICH, CONNECTICUT: "The reason for the sell-off overnight was concerns about the trade war re-accelerating between the US and China. But the markets decided that this isn't really a problem, at least in the short term." "The market was going up anyway. We were down 10 points before he started speaking so this is just the cherry on top of the cake on today's rally ... but the bulk of the move was unrelated to his comments." ADAM SARHAN, CHIEF EXECUTIVE, 50 PARK INVESTMENTS, NEW YORK: "The fact is the (stock) market was extended. It pulled back to support technically, which is the 50-day moving average... and bounced off of it." "The Fed said nothing has changed. Even if (trade) tensions escalate... the Fed is still going to cut rates with the stock market at all-time highs. So, fundamentally, we have a tremendous tailwind coming into effect in the near future." PETER CARDILLO, CHIEF MARKET ECONOMIST, SPARTAN CAPITAL SECURITIES, NEW YORK: "I don't think (Powell) is changing his tune whatsoever. He's saying that the economy is on solid footing, but he's also saying we have weakness. What he's doing is he's preparing the markets for a series of rate cuts, but not necessarily in a sequential order." "He's saying is he'll cut (interest rates) by 25 basis points at the end of this month then they'll assess the situation. And if the labor market continues to weaken and actually loses jobs, then he might be setting us up for a jumbo cut of 50 basis points in December." "He's preparing the markets for a rate cut, but he also doesn't want the markets to assume rate cuts are a given. He’s using labor market weakness as a hedge." MICHAEL JAMES, EQUITY SALES TRADER, ROSENBLATT SECURITIES, LOS ANGELES: "I don't think any of these comments from Chairman Powell are going to have any direct impact on the overall market. It continues to be a market of sentiment and positioning. The Trump tariff tweet from Friday, causing all of the decline, seemed to get shrugged off with some of the comments over the weekend. We had a decent rally yesterday and pulling back this morning on some of the China shipping moves but that also was being relatively dismissed. You can see that in the magnitude of the rally that we've had from this morning." "The bulls remain fully in charge and until that's shaken with something more significant than these comments from Chair Powell or anything else, that's likely to be the case into the start of third-quarter tech earnings next week." "There are bigger factors in place related to positioning and up the start of tech earnings season next week that are going to be far bigger determinants of the market's direction than these comments from Chair Powell will be." https://www.reuters.com/business/view-feds-powell-says-economy-firmer-footing-qt-end-view-2025-10-14/
2025-10-14 19:37
WASHINGTON, Oct 14 (Reuters) - A trade group representing the aluminum industry called on Tuesday for a ban on U.S. exports of used beverage cans to China to support American production of cars, fighter jets, tanks and satellites. The Aluminum Association said the United States consumes between 5 million to 6 million metric tons of aluminum scrap annually while exporting more than 2 million tons. The group called for an immediate ban on used beverage container exports outside of North America on national security grounds, saying much of U.S. scrap flows to China where it is processed and shipped back as finished goods. Sign up here. The group said the U.S. aluminum industry faces a supply gap of about 4 million metric tons of raw aluminum each year and becoming self-sufficient would "take many years, billions of dollars and access to an enormous amount of affordable energy." The United States exports nearly half of its scrap aluminum. This is even more concerning as demand for aluminum grows in key areas like cars, planes and packaging, the association said. President Donald Trump in June imposed 50% tariffs on aluminum metal shipped to the United States. About two-thirds of the primary aluminum used annually in the United States is imported from Canada. In August, the Commerce Department said it was hiking steel and aluminum tariffs on more than 400 products including numerous auto parts totaling $240 billion in annual imports. The parts include automotive exhaust systems and electrical steel needed for electric vehicles as well as components for buses. U.S. tariffs are not just limited to steel and aluminum themselves, but extend to a range of 'derivative' products made from the metals. https://www.reuters.com/sustainability/land-use-biodiversity/trade-group-wants-ban-export-scrap-aluminum-cans-china-2025-10-14/
2025-10-14 19:18
Oct 14 (Reuters) - A Russian official said on Tuesday that work would begin this week to restore external power links to the Russian-held Zaporizhzhia nuclear power station, which has been running on emergency diesel generators for three weeks. Russian forces seized the Zaporizhzhia plant in the first weeks of Moscow's February 2022 invasion of Ukraine. Each side has accused the other of conducting military action that caused the last external line to go down on July 23. Sign up here. "Active preparations are underway at this time," Mikhail Ulyanov, Russia's permanent representative to international bodies in Vienna, told the Russian state news agency RIA. "We expect the repair work on both power transmission lines to start at the end of this week." In order for the work to be carried out, Ulyanov said, "it is vital to agree on a local ceasefire in areas where the repair work is to be carried out". The Vienna-based U.N. nuclear watchdog, the International Atomic Energy Agency, has repeatedly called on both sides to refrain from actions compromising nuclear safety. The plant, Europe's largest with six reactors, produces no electricity at the moment, but needs power to keep fuel inside it cool and prevent any possibility of a meltdown. Rafael Grossi, the IAEA's Director General, has said the diesel generators are providing the power needed and has been working with both sides to get the external links restored. Ukraine's foreign minister accused Russia on Sunday of deliberately severing the external power line to the station in order to link it to Moscow's power grid. A top Russian diplomat this month denied that Russia had any intention of restarting the plant. https://www.reuters.com/business/energy/work-restore-link-zaporizhzhia-nuclear-plant-begins-this-week-russian-official-2025-10-14/
2025-10-14 18:36
Cboe Volatility Index rises to near five-month high before retreating Investors add protection amid US-China trade concerns VIX futures curve suggests short-lived volatility NEW YORK, Oct 14 (Reuters) - Wall Street's most watched gauge of investor anxiety rose to a near five-month high before paring gains on Tuesday as U.S. stocks whipsawed on renewed concerns over a U.S.-China trade conflict. The Cboe Volatility Index (.VIX) , opens new tab - an options-based indicator that reflects demand for protection against drops in the stock market - was last up 0.7 points to 19.68. The index had reached 22.94, its highest since May 23, earlier in the day. Sign up here. A reading of 20 or higher on the VIX is associated with robust demand for options protection. The recent rise in the index - often called the "Wall Street fear gauge" - pointed to investors waking up to the risks that lurk for stocks after an extended period of market calm that enveloped markets even as equities logged new record highs. Tuesday's market moves follow a sharper selloff on Friday when the S&P 500 dropped 2.7%, its largest drop in six months. On Tuesday, the benchmark index fell as much as 1.5% before recovering to trade up 0.2%, after Federal Reserve Chair Jerome Powell said the central bank may soon end its balance sheet runoff, easing investor concerns over tight financial conditions. "It had been really, really quiet and so all those people who were asleep had to wake up," said Jim Carroll, senior wealth advisor and portfolio manager at Ballast Rock Private Wealth in Charleston, South Carolina. "Part of what we saw on Friday was a scramble for protection ... once the scramble starts then it becomes, you know, chasing protection instead of chasing returns and you get this big VIX pop," Carroll said. Some investors have been opportunistically adding protection to their portfolios. At least one trader took advantage of Monday's retreat in volatility to buy short-term hedges via October 24 put spreads in both the S&P 500 index-tracking SPDR S&P 500 ETF Trust and the Nasdaq-100 index-tracking QQQ ETF, according to a note by Susquehanna International Group derivatives strategist Christopher Jacobson. Put options convey the right to sell stock at a fixed price in the future. While investors remained nervous about the near-term outlook for stocks, there was little sign of outright panic in the market. The VIX futures curve, a snapshot of prices of futures contracts on the volatility index across different expirations, painted a less fearful picture. "It's very flat," said Joe Tigay, portfolio manager for Rational Equity Armor Fund. "It kind of is saying that this volatility might be short-lived," said Tigay, who has been taking advantage of the jump in market swings to sell volatility even as he stands ready to pick up more protection if stocks were to recover and markets turn calm again. https://www.reuters.com/world/china/wall-streets-fear-gauge-climbs-us-china-trade-fears-rise-2025-10-14/
2025-10-14 18:32
Court rules Credit Suisse bond write-off lacked legal basis UBS shares fall over 3.5% after court decision 3,000 complainants filed appeals against FINMA's decree ZURICH, Oct 14 (Reuters) - Writing off 16.5 billion Swiss francs ($20.53 billion) in Credit Suisse bonds was unlawful, a Swiss court ruled on Tuesday, boosting bondholders' hopes of recouping losses and raising fresh questions about how authorities handled the bank's rescue. Swiss market regulator FINMA's decision in March 2023 to wipe out Credit Suisse's Additional Tier 1 (AT1) bonds during the state-engineered takeover by its rival UBS (UBSG.S) , opens new tab triggered an investor backlash and legal challenges. Sign up here. Shares in UBS, which faces tougher banking regulations that could oblige it to hold billions of dollars in additional capital, fell by more than 3.5% following the ruling, which can be appealed at Switzerland's top court. Analysts said the Federal Administrative Court's decision was likely to be appealed and even if legal challenges failed, investors were not guaranteed to recover the entire sum because the bonds had lost value before Credit Suisse's collapse. "The repayment, if an appeal is unsuccessful, could be much less than the full 16 billion, as the market value of the bonds was much less than their nominal value at the time of the rescue," said Hans Gersbach, a banking and economics professor at ETH University in Zurich. Peter V Kunz, a business law professor at the University of Bern forecast the bonds would eventually need to be re-issued once a legal process he saw lasting up to six years played out. But the fact that actions taken by Swiss authorities had created a potential headache for UBS could win the bank sympathy in its efforts to lobby for lower capital requirements, he said. If UBS did have to re-instate the AT1 bonds it could seek to have the government share the burden, Kunz added. In a partial decision, the administrative court said the 2023 AT1 bond write-off lacked a legal basis. "It considered that the bondholders' property rights were seriously interfered with, which would have required a clear and formal legal basis. But no such basis existed," the court said. AT1 bonds, introduced after the 2008 financial crisis, are hybrid debt instruments which banks issue to bolster their capital buffers and absorb losses in times of stress. The Swiss finance ministry and FINMA both said they would analyse the court's decision. UBS declined to comment. 2023 DECISION LEFT MARKETS STUNNED The 2023 write-off stunned markets by prioritizing shareholder compensation over bondholder claims, upending the normal capital structure hierarchy. When Credit Suisse was taken over, shareholders received UBS stock valued at around $3.25 billion. AT1 holders were left with nothing, prompting lawsuits in Switzerland, the U.S., and investor-state arbitration under bilateral treaties. Around 3,000 complainants lodged appeals with the court over FINMA's decree in about 360 cases, the court said. In essence, complainants requested that the decree be revoked, and that the write-off be reversed, it added. The court made a partial decision in one appeal case and revoked FINMA's decree. It has not yet decided on the reversal request. The other cases are now suspended until a decision regarding the revocation of the decree has become final. Jonas Hertner, a Zurich-based lawyer who previously represented Credit Suisse AT1 clients at law firm Quinn Emanuel, expected FINMA and UBS to appeal the decision, which he said essentially held that bondholders were expropriated. "Under Swiss law, expropriation requires full compensation. This decision is a step to restore investor confidence in the Swiss legal system," he said. ($1 = 0.8038 Swiss francs) https://www.reuters.com/business/finance/swiss-authorities-analyse-court-decision-credit-suisse-bond-write-off-2025-10-14/
