2024-05-01 11:58
NEW YORK, May 1 (Reuters) - A gauge of global stocks fell on Wednesday while the dollar weakened against a basket of peers after the Federal Reserve left interest rates unchanged and indicated it is still leaning toward eventual rate cuts. But the U.S. central bank put a red flag on recent disappointing inflation readings and suggested a possible stall in the movement toward more balance in the economy. The Fed also announced plans to slow the speed of its balance sheet drawdown, after having spent much of the earlier part of the year warning of such a shift. "As expected, the Federal Open Market Committee decided to keep its key interest rate, the federal funds rate, unchanged," said Matthais Scheiber, global head of portfolio management for the systematic edge team at Allspring Global Investments in London. "We believe the Fed won't cut rates until it sees weakening in prices and labor market data - probably not before fall." On Wall Street, the S&P 500 closed slightly lower in choppy trading in the wake of the Fed's policy announcement, after each of the three major indexes closed out April with their first monthly declines since October. The Dow Jones Industrial Average (.DJI) New Tab, opens new tab rose 87.37 points, or 0.23%, to 37,903.29, the S&P 500 (.SPX) New Tab, opens new tab lost 17.30 points, or 0.34%, to 5,018.39 and the Nasdaq Composite (.IXIC) New Tab, opens new tab lost 52.34 points, or 0.33%, to 15,605.48. Earlier, data from the ADP Employment report showed U.S. private payrolls increased more than expected in April while data for the prior month was revised higher. But a separate report from the Bureau of Labor Statistics in its Job Openings and Labor Turnover Survey, or JOLTS, showed U.S. job openings fell to a three-year low in March, while the number of people quitting their jobs declined - indications of easing labor market conditions that could potentially aid the Fed in its fight against inflation. Other data from the Institute for Supply Management pointed to continued sluggishness in U.S. manufacturing, which contracted in April amid a decline in orders after briefly expanding in the prior month. The data comes ahead of the U.S. government's key employment report on Friday. Markets have continued to dial back expectations for the timing and amount of rate cuts from the central bank this year, as inflation has proven to be sticky and the labor market remains on solid footing. After the policy statement, traders added to bets that the Fed will cut rates this year, likely in November. MSCI's gauge of stocks across the globe (.MIWD00000PUS) New Tab, opens new tab fell 2.22 points, or 0.29%, to 754.39 after briefly turning higher after the Fed's statement. Investors were also grappling with a deluge of U.S. corporate earnings, with Amazon.com (AMZN.O) New Tab, opens new tab up about 3% after its quarterly results, helping to lift the Dow. The dollar index fell 0.19% at 106.12, following the Fed statement, after earlier reaching 106.49, the highest since April 16, with the euro up 0.23% at $1.0689. Against the Japanese yen , the dollar weakened 0.18% at 157.52 while Sterling edged up 0.01% at $1.2491. The yield on benchmark U.S. 10-year notes fell 5.4 basis points to 4.63%, from 4.684% late on Tuesday, and the 2-year note yield, which typically moves in step with interest rate expectations, fell 8.6 basis points to 4.9602%, from 5.046%. European bond markets were closed for the May 1 holiday as were most stock markets in Europe and those in China, Hong Kong and much of Asia. Of the stock markets that were trading, Britain's FTSE (.FTSE) New Tab, opens new tab ended 0.28% lower, and Japan's Nikkei closed down 0.34% (.N225) New Tab, opens new tab. Oil prices fell for a third day on increasing hopes for a ceasefire agreement in the Middle East and extending declines after the U.S. EIA storage report. U.S. crude settled down 3.58% to $79.00 a barrel, and Brent fell to $83.44 per barrel, settling down 3.35% on the day. Sign up here. https://www.reuters.com/markets/global-markets-wrapup-1-2024-05-01/
2024-05-01 11:39
May 1 (Reuters) - Canadian miner Barrick Gold (ABX.TO) New Tab, opens new tab on Wednesday beat first-quarter profit estimates on higher bullion prices and said it has entered into an exploration partnership with Geophysx Jamaica. Prices of the precious metal rose about 8.2% to $2,231 per ounce in the January-March quarter, on buying from central banks and hopes the U.S. Federal Reserve could cut interest rates as early as June. The world's second-largest gold miner said its average realized gold prices rose to $2,075 per ounce from $1,902 per ounce a year earlier. All-in sustaining costs per ounce of gold, an industry metric that reflects total expenses, was $1,474 in the quarter, up from $1,370 per ounce a year earlier. Rival Newmont (NEM.N) New Tab, opens new tab also topped profit estimates last week, as the world's largest gold miner benefited from robust production, prices and lower operating costs. U.S.-listed shares of Barrick were up 2.5% in premarket trading. The Toronto, Canada-based company, in a separate release, said as part of its agreement with Geophysx, Barrick will have the right to work with the private mineral exploration company to earn up to an 80% joint-venture interest in designated properties located in Jamaica. The partnership would initially provide Barrick with access to about 4,000 square kilometers of consolidated land positions throughout the country, with a favorable geological setting comparable to the Dominican Republic, where it operates the Pueblo Viejo mine. Barrick's gold production fell to 940,000 ounces in the quarter, versus estimates of 947,330 ounces. But it expects production to increase steadily through the year, with operations ramping up at its Goldrush mine in Nevada and at Pueblo Viejo, along with restarting of the Porgera mine in Papua New Guinea. The company's quarterly revenue of $2.75 billion was higher than the $2.64 billion a year ago. It posted adjusted profit of 19 cents per share, compared with LSEG estimates of 15 cents. Sign up here. https://www.reuters.com/markets/commodities/barrick-gold-beats-quarterly-profit-estimates-2024-05-01/
2024-05-01 11:21
NEW YORK, May 1 (Reuters) - The yen soared against the U.S dollar late on Wednesday, as market participants suspected Japan's monetary authorities were in the market to prop up the beleaguered currency. The Japanese unit rose as high as 153.19 per dollar from about 157.55. It was last at 154.83. Market participants said the move happened right after the U.S. stock market close and after Fed Chair Jerome Powell wrapped up his press briefing. "It looks like intervention. The Japanese, I don't think, are going to say anything or admit to it. They didn't the last time, but it certainly looks like it," said Joe Trevisani, senior analyst at FX Street. The yen also jumped on Monday to 154 after hitting a 34-year low of 160.245 per dollar. Japanese officials on Monday declined to comment. But Bank of Japan data showed that the Japanese central bank, which acts on behalf of the Ministry of Finance, may have spent some 5.5 trillion yen ($35.06 billion) supporting the currency on Monday. The yen has been under pressure as U.S. interest rates have climbed and Japan's have stayed near zero, driving cash out of yen and into dollars to earn so-called "carry". The U.S. dollar, meanwhile, fell on Wednesday after the Fed signaled it is still leaning toward eventual reductions in borrowing costs, but repeated that it wants to gain "greater confidence" that inflation will continue to fall before cutting rates. "In recent months, there has been a lack of further progress towards the Committee's 2% inflation objective," the Fed said in its statement. The statement was largely as expected while Powell also said at a press conference that it is unlikely that the U.S. central bank's next move will be a hike, easing some concerns about the Fed potentially pivoting to a more hawkish stance. Stickier-than-expected consumer price inflation in March dashed hopes that elevated readings in January and February were anomalies, leading traders to push back expectations on when the U.S. central bank is likely to cut interest rates. Fed fund futures traders are now pricing in 35 basis points of easing this year, up from 29 basis points before the Fed statement. "The lack of change in forward guidance was marginally dovish, and I am not sure the new inserted phrase about lack of progress on inflation is enough to offset that," said John Velis, FX and macro strategist at BNY Mellon in New York. In late trading, the dollar index fell 0.6% to 105.69 after earlier reaching 106.49, the highest since April 16. A break above 106.51 would be the highest since early November. The Fed also announced it will scale back the pace at which it is shrinking its balance sheet starting on June 1, allowing only $25 billion in Treasury bonds to run off each month versus the current $60 billion. Mortgage-backed securities will continue to run off by up to $35 billion monthly. The next major economic indicator will be Friday's jobs report for April, which is expected to show that employers added 243,000 jobs during the month. (USNFAR=ECI) New Tab, opens new tab The ADP Employment report on Wednesday showed that U.S. private payrolls increased more than expected in April while data for the prior month was revised higher. A U.S. Labor Department report on Wednesday, meanwhile, showed that U.S. job openings fell to a three-year low in March, while the number of people quitting their jobs declined. The euro was last flat at $1.0711. The pound was also little changed at $1.2525. In cryptocurrencies, bitcoin rose 0.8% to $57,708, after earlier reaching $56,483, the lowest since Feb. 27. Sign up here. https://www.reuters.com/markets/currencies/dollar-nears-year-high-after-pre-fed-data-shock-yen-slips-2024-05-01/
2024-05-01 11:01
LONDON, May 1 (Reuters) - Shell (SHEL.L) New Tab, opens new tab has exited China's power markets as part of CEO Wael Sawan's drive to focus on more profitable operations including its natural gas and oil businesses. Shell decided to exit the power value chain in China, which includes power generation, trading and marketing businesses, it said in a statement. The decision was effective from the end of 2023. "We are selectively investing in power, focusing on delivering value from our power portfolio, which requires making difficult choices," Shell said. According to Shell's website, Shell Energy China was one of the first wholly-owned foreign entities to participate in the China's carbon emissions market, and is also registered to trade in the China's power market. The changes do not apply to Shell electric vehicle charging business, which is a key growth market for the company, a spokesperson said. "We will work with our partners and customers to contribute to China's energy transition," Shell said. Shell shares were down 0.8% by 1050 GMT, compared with a 0.23% drop in the broader European energy index (.SXEP) New Tab, opens new tab. As part of its drive to save up to $3 billion in annual costs, Shell has in recent months pulled out of the European retail power business and several offshore wind and low-carbon projects. It has also put U.S. solar assets up for sale and placed its giant refining and petrochemical complex in Singapore under review. Shell has also made company-wide staff reductions, including in its low-carbon solutions division. While reducing its presence in renewables and low-carbon energies, Shell plans to double down on natural gas, for which it expects demand to continue growing in the coming decades. Sign up here. https://www.reuters.com/business/energy/shell-exits-china-power-market-businesses-2024-05-01/
2024-05-01 11:01
May 1 (Reuters) - Canadian oil and gas company Cenovus Energy (CVE.TO) New Tab, opens new tab beat first-quarter profit estimates on Wednesday, buoyed by higher production and throughput volumes at its refineries. Quarterly refining throughput in the quarter of 655,200 barrels per day (bpd) was a record while high operational availability at its downstream assets helped benefit from improved benchmark pricing in the U.S., the company said. "During the first quarter of 2024, we saw strong operational performance from our oil sands and Canadian refining assets, and improved operational performance from our U.S. refining assets," Cenovus said. Calgary, Alberta-based Cenovus said total upstream production rose nearly 3% to 800,900 barrels of oil equivalent per day (boepd) in the January-March quarter from a year earlier. Crude oil prices were range-bound during the quarter, but still remained at a level at which oil and gas companies can produce profitably. Cenovus said WTI crude prices stood at $76.96 per barrel in the first three months of 2024, compared with $76.13 a year earlier. The company reported a net income of 62 Canadian cents per share in the first quarter, beating analysts' average estimate of 54 Canadian cents, according to LSEG data. Higher operating margin and a gain on asset sales also helped boost earnings, the company said. ($1 = 1.3770 Canadian dollars) Sign up here. https://www.reuters.com/markets/commodities/canadas-cenovus-energy-posts-higher-first-quarter-profit-2024-05-01/
2024-05-01 11:00
LONDON, May 1 (Reuters) - The pound held steady on Wednesday as traders waited for the Federal Reserve's interest rate decision later in the day for hints about when U.S. borrowing costs might start to fall. Sterling was last effectively unchanged from Tuesday at $1.2488, after falling 0.55% the previous day as the dollar rallied on the back of strong U.S. economic data. The euro was also roughly flat at 85.46 pence, within the tight range it has traded in since the start of the year. Global markets were relatively subdued, with traders off for May Day or International Workers' Day in many countries. The Fed announces its decision at 2 p.m. ET (1800 GMT) and is widely expected to leave rates at 5.25% to 5.5%. Investors' focus will be on Chair Jerome Powell's comments on the recent string of stronger-than-expected economic data, which could influence the dollar and global currency markets. Data on Tuesday showed that growth in U.S. labour costs accelerated in the first quarter of the year, sparking a rise in U.S. bond yields and the dollar that weighed on sterling, the euro and other major currencies. The pound has fallen 1.9% this year as the dollar has risen, although it has outperformed the euro's 3.4% drop thanks partly to a stronger economy and price pressures. Traders on Wednesday pushed back their expectations for the first Bank of England interest rate cut so that they no longer fully expect one by September, in the wake of Tuesday's U.S. data. Analysts say other major central banks will find it more difficult to cut interest rates if the Fed is leaving them on hold, not least because it could trigger a sharp drop in their currencies. "The start of the BoE's rate-cutting cycle should see GBP weaken," said Paul Mackel, head of FX research at HSBC, in a note. "HSBC Economics expects the BoE to begin cutting rates in June, which should start mechanically compressing the nominal yields of the currency versus those that are not rushing to cut." Data on Wednesday showed that British house prices fell unexpectedly for a second month running during April, pointing to some moderation in the recent recovery in housing market activity. Separate data showed British manufacturing fell back into contraction in April, although sterling showed little discernible reaction. Sign up here. https://www.reuters.com/markets/currencies/sterling-holds-steady-markets-await-fed-decision-2024-05-01/
