2024-05-06 12:48

May 6 (Reuters) - Tyson Foods (TSN.N) New Tab, opens new tab shares suffered their worst one-day decline in a year on Monday after the U.S. meatpacker warned that consumers are under pressure from persistent inflation and high commodity costs could weigh on upcoming results. The Arkansas-based meatpacker reported second-quarter sales that fell short of analysts' estimates, though profits surpassed expectations. Third-quarter results could be weaker than the fourth quarter due to performance in Tyson's pork and prepared foods divisions, CEO Donnie King said on a conference call. Shares ended down 5.7% after tumbling earlier by more than 9%. "The outlook was viewed as a disappointment," said Arun Sundaram, analyst with CFRA Research, adding the third quarter is "typically the strongest from a seasonal perspective." High commodity costs could weigh on third-quarter results in prepared foods, said Melanie Boulden, the unit's president. She added that inflation is pressuring consumers, particularly lower-income households, at retail stores and food-service outlets. "Uncertainties remain around consumer strength and behavior," Chief Financial Officer John R. Tyson said. He later sought to calm investor concerns over the third quarter as shares sank, saying executives "don't want anyone to over-read into that." Following the call, the company said it does not issue quarterly guidance. Tyson has shuttered six U.S. chicken plants since the start of 2023, eliminated corporate employees and announced plans to close a pork plant, in an attempt to boost results and rein in costs. Improvement in the chicken business on Monday prompted Tyson to lift its estimate for total adjusted operating income in fiscal year 2024 to between $1.4 billion and $1.8 billion from between $1 billion and $1.5 billion. The increased forecast and quarterly earnings were not overly surprising, Citi Research analyst Thomas Palmer said. Adjusted second-quarter earnings were 62 cents per share, above analysts' expectations for 39 cents, based on LSEG data. Tyson has worked to turn around its chicken business for years but struggled with excess supply in 2023. Adjusted second-quarter operating margins were 3.9%, compared to negative 3.7% a year earlier, as feed costs fell. Tyson raised the chicken unit's income outlook after the second quarter for the first time in seven years, JP Morgan said. Second quarter sales slid 8.3% while volumes dropped 6.1% due to reduced U.S. production, according to Tyson. Producers are grappling with elevated chicken deaths and disease, King said. "We're not where we need to be yet in our chicken business," he said. Sign up here. https://www.reuters.com/business/retail-consumer/tyson-foods-beats-profit-estimates-cost-control-efforts-sales-slip-2024-05-06/

2024-05-06 12:43

MSCI's ACWI index climbs to highest since June 2022 Renewed rate cut optimism lifts global stock markets Trade quiet in London, Tokyo due to UK, Japan holidays Weaker yen keeps markets alert to possible BOJ intervention NEW YORK/LONDON, May 6 (Reuters) - A gauge of global stock markets rallied on Monday on optimism that major central banks will cut interest rates this year, while the yen weakened against the dollar after a surge last week from Japan's suspected currency intervention. Stocks on both sides of the Atlantic advanced, and in Asia too, as a softer-than-expected U.S. labor market report on Friday led traders to revive bets that the Federal Reserve would ease monetary policy as early as September. The dollar index , a measure of the U.S. currency against six major trading peers, was lower for a fourth straight session after Friday's data showed the lowest jobs gain since October calmed any angst that the Fed might even hike again. Fed Chairman Jerome Powell "told the market that a hike was unlikely. Those were his words, 'unlikely,' and therefore they took that to mean that he wants to cut," said Brad Conger, chief investment officer at Hirtle Callaghan & Co in Conshohocken, Pennsylvania. However, the inflation outlook is still uncertain as the market hopes rates are restrictive enough to slow the economy and reduce the pace of price increases, Conger said. New York Fed President John Williams on Monday said that at some undefined point the U.S. central bank will lower its rate target, but for now monetary policy is in a "very good place," while Richmond Fed President Thomas Barkin said the battle against inflation will likely require a hit to demand. On Wall Street, the Dow Jones Industrial Average (.DJI) New Tab, opens new tab rose 0.46%, the S&P 500 (.SPX) New Tab, opens new tab gained 1.03% and the Nasdaq Composite (.IXIC) New Tab, opens new tab advanced 1.19%. In Europe, the pan-regional STOXX 600 (.STOXX) New Tab, opens new tab closed up 0.53% on signs the European Central Bank is more confident about cutting rates as euro zone inflation continues to decelerate, three ECB policymakers said. Philip Lane, Gediminas Simkus and Boris Vujcic said separately that the inflation and growth data cemented their belief that euro zone inflation, which was 2.4% in April, will slow to the central bank's 2% target by the middle of next year. MSCI's gauge of stocks across the globe (.MIWD00000PUS) New Tab, opens new tab rose 0.50% to close at 1,066.73, it's highest since June 2022. Markets in Britain and Japan were closed for public holidays. The dollar index fell 0.07% to 105.10, leaving the euro up 0.07% at $1.0766. Goldman Sachs raised its 2024 EPS growth forecast for STOXX 600 (.STOXX) New Tab, opens new tab companies to 6% from 3% earlier, the bank said in a note on Friday. According to Goldman, a 10% annual rise in Brent prices adds about 2.5 percentage points to annual EPS growth, and a 10% weaker euro/dollar exchange rate adds about the same. Treasury yields ticked lower as investors assessed last week's subdued job creation, which reinforced view that the U.S. economy was not overheating enough to derail a rate cut. The yield on benchmark U.S. 10-year notes fell 1.3 basis points to 4.487%, from 4.5% late on Friday. Traders are now pricing in 43 basis points of Fed rate cuts by year end, with the first cut possibly in September, according to LSEG's rate probability app. In recent weeks, traders had priced in just one cut due to signs of sticky inflation. Oil prices rose after Saudi Arabia hiked June crude prices for most regions and as the prospect of a quick agreement for a Gaza ceasefire deal appeared slim, reviving fears that combat between Hamas and Israeli forces will resume soon. U.S. crude settled up 37 cents at $78.48 a barrel and Brent rose 37 cents to settle at $83.33 per barrel. MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) New Tab, opens new tab peaked at its highest level since February 2023 and closed 0.66% higher, while China's blue-chip index (.CSI300) New Tab, opens new tab ended up 1.5%. Hong Kong's Hang Seng Index (.HSI) New Tab, opens new tab rose 4.7% last week and on Friday clocked its longest daily winning streak since 2018, closing 0.55% higher on Monday. INTERVENTION WATCH Elsewhere, traders remained on alert for further volatility in the yen, after last week's bouts of suspected intervention from Japanese authorities to stop a sharp slide in the currency. Tokyo is believed to have spent more than 9 trillion yen ($59 billion) to support its currency last week, as suggested by data from Bank of Japan, taking the yen from a 34-year low of 160.245 per dollar to a roughly one-month high of 151.86 over the span of a week. The yen gave back some of those gains on Monday and was last 0.63% lower at 153.95 per dollar. Gold prices climbed as the dollar weakened. U.S. gold futures for June delivery settled 0.9% higher at $2,331.20 per ounce. Bitcoin gained 0.65% at $63,343.00 and ethereum declined 1.2% at $3,077.3. Sign up here. https://www.reuters.com/markets/global-markets-wrapup-1-2024-05-06/

2024-05-06 12:38

SAO PAULO, May 6 (Reuters) - Brazilian petrochemical producer Braskem (BRKM5.SA) New Tab, opens new tab said on Monday that Abu Dhabi oil company ADNOC [RIC:RIC:ADNOC.UL] has decided to terminate talks to buy a stake held by conglomerate Novonor in the firm, according to a securities filing. ADNOC had presented in November a non-binding offer for the stake that implied the price of 37.29 reais per share, totaling an equity value of 10.5 billion reais ($2.1 billion). Novonor, formerly known as Odebrecht, holds a 38.3% controlling stake in the petrochemical firm, which also has state-run oil giant Petrobras (PETR4.SA) New Tab, opens new tab as a major shareholder. ($1 = 5.0830 reais) Sign up here. https://www.reuters.com/markets/deals/adnoc-terminates-talks-buy-stake-brazils-braskem-2024-05-06/

2024-05-06 12:28

ZURICH, May 6 (Reuters) - The Swiss National Bank is examining the best way that financial assets can be digitally tokenised as a way of making payments more secure and efficient, Chairman Thomas Jordan said on Monday. Jordan said central banks needed to decide how best to engage in the developments which advocates say will speed up and make payments cheaper. Tokenisation means the digital representation of claims on financial assets on a programmable platform which typically relies on distributed ledger technology. "Central banks....can take a wait-and-see stance and only act if tokenisation is adopted at scale," Jordan told an event held in Basel. "Alternatively, they can push ahead independently of market adoption. Or they can proceed stepwise to identify the optimal solutions for settling tokenised asset transactions together with market participants through experiments." The SNB favours the third option, Jordan said as it examines the risks and benefits. One project, called Helvetia III, allows tokenised central bank money to be used to settle transactions and has already been used in four bond issuances by Swiss local government. "Through our Helvetia III pilot, we are contributing to the private sector's exploration of how tokenisation can improve the current financial system," Jordan said. "The world's first issuance of wholesale CBDC (central bank digital currency) on a regulated third-party platform underscores our commitment to facilitating technical progress while acting prudently and responsibly." Sign up here. https://www.reuters.com/business/finance/swiss-national-bank-exploring-ways-tokenise-financial-assets-2024-05-06/

2024-05-06 12:17

CANOAS, Brazil, May 6 (Reuters) - Brazilian President Luiz Inacio Lula da Silva asked Congress on Monday to recognize a state of public calamity for the heavy rains that have killed at least 85 people in the country's southernmost state of Rio Grande do Sul. More than 130 people are still missing after flooding that has affected more than two-thirds of the nearly 500 cities in the state, leaving about 150,000 people displaced, the state civil defense authority said. Floods have destroyed roads and bridges in several cities triggering landslides and leaving a path of destruction. Lula's measure asks Congress to declare a public calamity in the state, which would authorize extra government spending with no need to comply with a spending cap stipulated by fiscal rules approved last year. Expenses and tax waivers related to the state's recovery will also not be counted in the government's fiscal result under the measure. "We don't have an estimate yet of what will be necessary," said Planning Minister Simone Tebet. "Only when the water recedes will we see the immense extent of the damage in the state...," she added. Flavio Rosa, 72, from the small city of Canoas says it is the first time he has seen destruction of this scale in Rio Grande do Sul caused by the rains, which are a common annual occurrence in this part of Brazil. "I've seen other floods, but nothing like this," Rosa said. Weather conditions improved on Monday, but showers are expected to return at lower volumes this week and could pick up again between May 10 and 15, according to local weather forecaster MetSul Meteorologia. "The hydrological and meteorological scenarios are not at all favorable in the short and medium term," it said. "Despite improvements in parts of the state, some areas will remain under severe conditions for a very long time." Rio Grande do Sul Governor Eduardo Leite has emphasized that the death toll could still substantially increase as rescue workers gain access to more regions. Businesses have been severely hit, with meatpacker lobby ABPA saying 10 pork or poultry plants were fully or partially halted. Oil regulator ANP temporarily lowered mandates for the blend of biofuels into gasoline and diesel in the state as local ethanol and biodiesel supply was affected. Petrobras' (PETR4.SA) New Tab, opens new tab Canoas refinery was still supplying fossil fuel, it said. State capital Porto Alegre's Salgado Filho International Airport, one of Brazil's busiest, had its operations suspended indefinitely, operator Fraport said. Railway operator Rumo (RAIL3.SA) New Tab, opens new tab said train circulation in the state was partially interrupted due to the extreme weather and damage to assets is "still being duly measured." Sign up here. https://www.reuters.com/world/americas/death-toll-brazil-downpours-climbs-83-2024-05-06/

2024-05-06 11:46

Xi visits Europe for first time in five years France, EU Commission, have toughened their stance on trade Europe is not united on China, though Xi in Paris Monday, in the Pyrenees Tuesday PARIS, May 6 (Reuters) - French President Emmanuel Macron and EU Commission chief Ursula von der Leyen urged Chinese President Xi Jinping on Monday to ensure more balanced trade with Europe, but the Chinese leader showed little sign of being ready to offer major concessions. In meetings in Paris, Macron also pressed the Chinese leader to use his influence on Russia to end the war in Ukraine. Xi arrived in Europe for the first time in five years, at a time of growing business tensions that include the European Union investigating Chinese industries such as electric vehicle exports, while Beijing probes mostly French-made brandy imports. The European Union "cannot absorb massive over-production of Chinese industrial goods flooding its market," von der Leyen said after the three held talks under the gilded ceilings of the Elysee Palace. "Europe will not waver from making tough decisions needed to protect its market," she said, in reference to the trade probes and the sanctions that could follow. The relationship between Europe and China is hurt by unequal market access and by Chinese state subsidies, she said. Speaking later alongside Xi after the two met several times during the day, reviewed troops together and repeatedly shook hands for the cameras, Macron told reporters: "The EU today has the world's most open market ... but we want to be able to protect it." The EU's more assertive stance on trade with China dovetails with Washington's approach. U.S. Treasury Secretary Janet Yellen has warned Beijing that Washington will not accept new industries being "decimated" by Chinese imports. During their talks, held behind closed doors, Xi agreed that economic and trade frictions should be addressed through dialogue, Chinese state media said. But he also told Macron and von der Leyen that the problem of China's over-capacity "does not exist either from the perspective of comparative advantage or in light of global demand", Chinese media said. He later said China and France would work on rebalancing trade from the top, but gave few details. Macron's official gifts for Xi included cognac by LVMH-owned Hennessey (LVMH.PA) New Tab, opens new tab and Remy Cointreau (RCOP.PA) New Tab, opens new tab, which are among the French companies affected by China's retaliatory anti-dumping brandy investigation. Macron thanked Xi for what he described as his "open attitude" in the cognac probe. While the French president gave little details and Xi did not mention it, a French diplomatic source said this meant no taxes or custom duties until the probe was over, but did not preclude measures once it is wrapped up. "I thank the President for his open attitude regarding provisional measures on cognac and for his wish not to implement them," Macron said. 'COLD WAR' French diplomatic sources said Xi seemed receptive to concerns about trade imbalances, adding that the objective of the visit was to get messages across. Whether any action would follow remained to be seen, the sources said. In brief comments televised before one of his meetings with Macron, Xi urged his counterpart to join him in showing "independence" and "prevent a 'new Cold War'" between blocs. "We need to be forward-looking and work together for an equal and orderly multi-polar world," Xi said, calling on Macron to joining him in opposing "decoupling" China's supply chains and other economies. The EU's 27 members - in particular France and Germany - are not unified in their attitude towards China. While Paris advocates a tougher line on the EV probe, Berlin wants to proceed with more caution, sources say. Some French government officials privately expressed concern that Berlin will try to undermine the electric vehicle probe, which has zeroed in on Chinese carmakers BYD (002594.SZ) New Tab, opens new tab, Geely (0175.HK) New Tab, opens new tab and SAIC (600104.SS) New Tab, opens new tab. China is a key market for Germany's export-led economy and its carmakers such as BMW (BMWG.DE) New Tab, opens new tab and Mercedez-Benz (MBGn.DE) New Tab, opens new tab. France is also pushing China to open its market to French agricultural exports and resolve issues around the French cosmetic industry's concerns about intellectual property rights. "Among ourselves, French and Chinese companies and authorities, we talk to each other continuously," Jean-Paul Agon, the chairman of French cosmetics giant L'Oreal, told a Franco-Chinese business forum. "What matters is our common, shared desire to find solutions and move forward together." China, meanwhile, may announce an order for around 50 Airbus aircraft during Xi's visit. After a dinner at the Elysee Palace, Macron will take Xi to the Pyrenees on Tuesday, a mountainous region dear to the French president as the birthplace of his maternal grandmother. Sign up here. https://www.reuters.com/world/chinas-xi-paris-meet-macron-with-trade-ukraine-talks-planned-2024-05-06/