2024-04-12 22:20

JPMorgan Chase falls on NII forecast miss Wells Fargo Citigroup down after lower Q1 profits U.S. Steel dips after shareholders approve Nippon Steel merger Indexes down: Dow 1.24%, S&P 1.46%, Nasdaq 1.62% NEW YORK, April 12 (Reuters) - U.S. stocks sold off on Friday after major U.S. banks' results failed to impress, capping a week marked by market-moving inflation data, evolving expectations for U.S. Federal Reserve policy, and looming geopolitical tensions. All three major indexes fell more than 1%, and registered losses on the week. The S&P 500 index (.SPX) New Tab, opens new tab notched its biggest weekly percentage loss since January, while the Dow Jones Industrial Average's (.DJI) New Tab, opens new tab weekly loss was its steepest since March 2023. "When we look at what's happened in the macro space, inflation has taken a turn for the worse and that has put more pressure on companies to deliver this earnings season," said Mike Dickson, head of research at Horizon Investments in Charlotte, North Carolina. "Everyone's a bit jittery with intense focus on how good earnings need to be." Results from a trio of big banks marked the unofficial launch of first-quarter earnings season. JPMorgan Chase & Co (JPM.N) New Tab, opens new tab, the biggest U.S. bank by assets, posted a 6% profit increase but its net interest income forecast fell short of expectations. Its shares slid 6.5%. Wells Fargo & Co's (WFC.N) New Tab, opens new tab stock inched lower after profits fell 7% as net interest income dropped on weak borrowing demand. Citigroup (C.N) New Tab, opens new tab posted a loss after spending on employee severance and deposit insurance. Its stock dipped 1.7%. Economic data this week, particularly Wednesday's hotter-than-expected Consumer Price Index report, has suggested that inflation could be stickier than previously thought, prompting investors to reset expectations about the timing and extent of the U.S. Federal Reserve's rate cuts this year. "It's a very real risk that we won't get any rate cuts this year," Dickson said, adding that while he does not expect a hike, the Fed would probably prefer to keep rates higher for longer. "There's just no data point that you can actually look at right now that says the Fed should cut rates." Boston Fed President Susan Collins said she expects a couple of rate cuts this year, even though it could take inflation some time to return to its targeted level. Austan Goolsbee, president of the Chicago Fed, said he remains focused on the Personal Consumption Expenditures (PCE) report due on April 26 for a clearer picture of inflation's progress toward the central bank's target. Geopolitical tensions continue to simmer as Iran threatened to take revenge on Israel for the April 1 airstrike on its embassy in Damascus, adding momentum to the sell-off. "Geopolitical risks are difficult to nail down but they could keep energy prices elevated, which would not be helpful to for the CPI situation." The Dow Jones Industrial Average (.DJI) New Tab, opens new tab fell 475.84 points, or 1.24%, to 37,983.24. The S&P 500 (.SPX) New Tab, opens new tab lost 75.65 points, or 1.46%, at 5,123.41 and the Nasdaq Composite (.IXIC) New Tab, opens new tab dropped 267.10 points, or 1.62%, to 16,175.09. All 11 major sectors in the S&P 500 closed in the red, with materials (.SPLRCM) New Tab, opens new tab suffering the steepest percentage loss. Advanced Micro Devices (AMD.O) New Tab, opens new tab and Intel (INTC.O) New Tab, opens new tab fell 4.2% and 5.2%, respectively, following a report that Chinese officials told the country's largest telecom firm earlier this year to phase out foreign chips by 2027. U.S. Steel (X.N) New Tab, opens new tab slid 2.1% after shareholders voted to approve a proposed merger with Nippon Steel Corporation (5401.T) New Tab, opens new tab. Declining issues outnumbered advancers on the NYSE by a 4.19-to-1 ratio; on Nasdaq, a 3.16-to-1 ratio favored decliners. The S&P 500 posted 12 new 52-week highs and nine new lows; the Nasdaq Composite recorded 35 new highs and 211 new lows. Volume on U.S. exchanges was 11.67 billion shares, compared with the 11.41 billion average for the full session over the last 20 trading days. Get a look at the day ahead in U.S. and global markets with the Morning Bid U.S. newsletter. Sign up here. https://www.reuters.com/markets/us/futures-steady-ahead-big-bank-earnings-2024-04-12/

2024-04-12 21:24

SBTi issues 'clarification' to April 9 statement Says Scope 3 offsetting plan to follow review process Backed by a group of developing country stakeholders LONDON, April 12 (Reuters) - Trustees of a climate targets verification group at the centre of a governance storm on Friday sought to assuage concern over their plan to allow offsetting of companies' supply chain emissions. The Science Based Targets initiative had initially laid out its plan in a statement on its website late Tuesday, prompting staff and some technical advisors to write separate letters to the board criticising the move. Among the complaints was that the board had circumvented an established governance process and made a decision to allow offsetting of so-called Scope 3 emissions without the agreement of the broader group. By allowing limited use of offsets for Scope 3 emissions, the hope is it will help drive money to climate friendly projects like afforestation. Scope 1 emissions, those directly under a company's control, would not be able to be offset. In exchange for funding a project such as planting more trees, a company would be able to collect a credit that they can use to offset pollution from parts of their value chain, such as when a customer uses their products. In a "clarification" to its April 9 statement, the trustees said no change had been made to the group's current standards and that any use of such "environmental attribute certificates" would be "informed by the evidence". In addition, any changes to the group's standards would follow the usual process that includes a research and drafting stage as well as a public consultation, and review and approval by the group's technical council, it said. A draft proposal about potential changes to Scope 3 will be published in July and feed into the drafting phase of the process, the statement added. Separately, the trustees also received a letter of support from a group of non-profits and companies working with communities in the Global South most exposed to climate change, including in Tanzania, Kenya, Peru and Indonesia. Among the 15 signatories were Brazil's Ecologica Institute and Rioterra. The group said it celebrated the decision to allow Scope 3 offsets as "at long last" money would flow to communities working to protect nature, including through reducing deforestation, restoring grassland and reforesting mangroves. "Simply put, if seen through, this brave shift by the SBTi Board will unlock more climate finance for natural assets and local communities in the Global South, accelerating global climate action," the group said in a letter seen by Reuters. "We urge the SBTi staff to listen and act pragmatically, and to work expeditiously, to propose guidance to operationalize the Board's direction." In a statement on Friday, global environmental group WWF, a founder of the initiative, said the use of offsets should be limited and not substitute for cutting a company's operating emissions. "WWF supports science-based positions and recommendations from technical teams, whose work provides the foundation of SBTI's integrity," the group said in an emailed statement. The Reuters Daily Briefing newsletter provides all the news you need to start your day. Sign up here. https://www.reuters.com/sustainability/climate-targets-group-trustees-seek-calm-governance-storm-2024-04-12/

2024-04-12 21:21

NEW YORK, April 12 (Reuters) - The Texas grid operator asked electricity generators on Friday to delay or cancel planned outages early next week, when high temperatures are expected to lead residents and businesses switch on cooling systems and drive up power use in the state. The Electric Reliability Council of Texas urged power suppliers to postpone outages on Tuesday and Wednesday next week "to help alleviate potential tight conditions through the evening," ERCOT said in an email. ERCOT said it has not asked Texans to conserve power. Texas has seen rising power demand from a swelling state population and the proliferation of energy-intensive businesses like crypto-currency mining since 2021, when a deadly winter storm caused prolonged and widespread outages in the state's electric grid. The Reuters Power Up newsletter provides everything you need to know about the global energy industry. Sign up here. https://www.reuters.com/business/energy/ercot-asks-texas-power-generators-delay-outages-expected-heat-next-week-2024-04-12/

2024-04-12 21:20

WASHINGTON/LONDON, April 12 (Reuters) - Washington and London on Friday prohibited metal-trading exchanges from accepting new aluminum, copper and nickel produced by Russia and barred the import of the metals into the U.S. and Britain. The action is aimed at disrupting Russian export revenue amid Moscow's ongoing invasion of Ukraine, which has killed or wounded tens of thousands and reduced cities to rubble. Russia is a major producer of aluminum, copper and nickel. Russian metals producers Rusal and Nornickel did not immediately reply to a Reuters request for comment, nor did the Russian embassy in Washington. The U.S. Treasury Department said Friday's action would prohibit the London Metal Exchange and Chicago Mercantile Exchange from accepting new Russian production of aluminum, copper and nickel. "Our new prohibitions on key metals, in coordination with our partners in the United Kingdom, will continue to target the revenue Russia can earn to continue its brutal war against Ukraine," U.S. Treasury Secretary Janet Yellen said in a statement. "By taking this action in a targeted and responsible manner, we will reduce Russia's earnings while protecting our partners and allies from unwanted spillover effects." EXISTING STOCK A UK official said London expected any market disruption to stabilize quickly, and that the government had consulted with colleagues in the U.S., the LME, the Bank of England and the Financial Conduct Authority to minimize any possible disruption. "The LME reflects all relevant sanctions and tariffs in its operations, and so will take steps ... to implement these sanctions for its own operations, and the operation of its market," the LME said in a statement, adding that it will release further guidance before the market opens on Monday. Both the British and U.S. measures will exempt the existing stock of Russian metal on these global exchanges so they can still be traded and withdrawn in an effort to minimize the risk to market stability, the British government said in a statement. The action does not block bilateral contracts, which will be able to continue, U.S. and British officials said, speaking on condition of anonymity. The officials said continued trading of Russian metals off of the exchanges is expected to be at a discount, and that while the action does not restrict supply, it is expected that the amount of revenue Russia can get per trade will be reduced. Washington and London will monitor the discount at which Russian metal is continuing to be exchanged elsewhere, the officials said. Available aluminum stocks in London Metal Exchange-registered warehouses were 91% of Russian origin in March, unchanged from the previous month, LME data showed on Wednesday. The high share of Russian-origin metal in LME inventories has been a concern for some producers, which compete with Russia's Rusal, and some Western consumers who have avoided Russian metal since Moscow's invasion of Ukraine in 2022. The share of Russian-origin copper stocks rose to 62% in March from 52% the previous month and the share of Russian nickel rose to 36% from 35% over the same period, the LME said. Friday's action is the latest in a series of sanctions imposed on Russia by the U.S., Britain and allies over the February 2022 invasion of Ukraine. The U.S. last year extended its economic measures against Russia into the metals and mining sector with tariffs on the metals. Officials on Friday said the U.S. imports of the three metals had effectively fallen to zero since. Britain banned the import of base metals from Russia in December 2023, and said it would extend the prohibition to related ancillary services when it could be done in concert with international partners. Get weekly news and analysis on the U.S. elections and how it matters to the world with the newsletter On the Campaign Trail. Sign up here. https://www.reuters.com/world/us/us-takes-action-targeting-russian-aluminum-copper-nickel-2024-04-12/

2024-04-12 20:54

April 12 (Reuters) - The U.S. Bureau of Land Management (BLM) moved a step closer on Friday to approving ioneer's (INR.AX) New Tab, opens new tab Rhyolite Ridge lithium mine in Nevada, a project that would be a key supplier of the electric vehicle battery metal to Ford Motor(F.N) New Tab, opens new tab and others. The proposed mine, roughly 225 miles (362 km) north of Las Vegas, contains one of North America's largest sources of lithium, and could produce enough of the metal to power nearly 370,000 EVs each year. The site is also home a rare flower found nowhere else on the planet, so some conservation groups oppose ioneer's project, making it a lightning rod in the debate over whether biodiversity matters more than the fight against climate change. The BLM said it plans to next week publish a draft environmental impact statement for public review during a 45-day public comment period, ending on June 3. The agency noted that ioneer has redesigned the mine to incorporate a protection plan for the flower. The proposed lithium mine "represents another step by the Biden-Harris administration to support the responsible, domestic development of critical minerals to power the clean energy economy," the BLM said in a press release. The U.S. Fish and Wildlife Service declared the Tiehm's buckwheat flower endangered in 2021. The U.S. Geological Survey has called lithium a critical mineral vital for the U.S. economy and national security. The U.S. Department of Energy has said it will lend ioneer up to $700 million to develop the mine. During the review period, BLM said its staff will conduct at least one in-person and one virtual public meeting on the proposal. Bernard Rowe, ioneer's managing director, said he believed Friday's announcement reflected the company's willingness to work with the government to protect the flower and develop a domestic source of lithium. "It really is a good demonstration of how, when parties come together and work through challenges, there are solutions that are possible," Rowe told Reuters. The BLM said a final decision is expected by the end of the year, after which ioneer would need to close a funding agreement with the DOE and also with South Africa's Sibanye Stillwater (SSWJ.J) New Tab, opens new tab. The Center for Biological Diversity (CBD), a conservation group that has opposed the mine, said in response to BLM's announcement that it would "take every available measure to protect" the flower. "This is another in a series of bizarre media stunts that the Bureau of Land Management has concocted while it drives the false narrative that it is conserving Tiehm's buckwheat,” said the CBD's Patrick Donnelly. The mysterious death of more than 17,000 Tiehm's buckwheat flowers near the mine site in 2020 sparked allegations from conservationists of a "premeditated" attack in which the plants were "dug up and destroyed." Australia-based ioneer denied harming the flowers. The Fish and Wildlife Service later blamed thirsty squirrels. Get a look at the day ahead in U.S. and global markets with the Morning Bid U.S. newsletter. Sign up here. https://www.reuters.com/markets/commodities/ioneer-moves-closer-nevada-lithium-mine-approval-with-start-public-review-2024-04-12/

2024-04-12 20:41

April 12 (Reuters) - President Joe Biden's administration on Friday finalized a range of reforms designed to boost returns and address environmental harms from drilling on public lands, a move that will increase fees for oil and gas companies that operate there. The new rules follow years of criticism from green and taxpayer groups that federal oil and gas development was not benefiting the public. Many of the changes by the Interior Department's Bureau of Land Management (BLM) formalize provisions in Biden's landmark climate change law, the 2022 Inflation Reduction Act (IRA). Under the new policy, oil and gas companies will pay higher bonding rates to cover the cost of plugging abandoned oil and gas wells as well as increased lease rents, minimum auction bids and royalty rates for the fuels they extract. The rules also limit drilling in sensitive wildlife and cultural areas. "These are the most significant reforms to the federal oil and gas leasing program in decades, and the will cut wasteful speculation, increase returns for the public, and protect taxpayers from being saddled with the costs of environmental cleanups," Interior Secretary Deb Haaland said in a statement. About 10% of the nation's oil and gas comes from drilling on federally owned land. An oil and gas industry trade group warned that higher costs to extract fuels from federal lands could boost U.S. reliance on foreign supplies. "Overly burdensome land management regulations will put this critical energy supply at risk," American Petroleum Institute Vice President of Upstream Policy Holly Hopkins said in a statement. Biden vowed during his 2020 election campaign to end federal oil and gas leasing as part of his agenda to combat climate change. But the IRA effectively guaranteed continued drilling rights auctions on federal lands for at least another decade as a concession to the powerful fossil fuel lobby. Several environmental and taxpayer organizations praised the reforms, saying they would tamp down on speculation and hold oil and gas companies accountable for cleaning up old wells. One group, Friends of the Earth, said the rules failed to address the climate impact of fuel extraction on public lands. "While we support BLM's steps to curb financial giveaways to Big Oil, this rule failes to confront the massive tide of climate emissions stemming from its leasing program," Nicole Ghio, senior fossil fuels program manager at Friends of the Earth, said in a statement. Drillers are required to pay upfront bonds to cover future cleanups if they fail, and a 2019 government analysis found bonding levels were inadequate. Minimum lease bonds will soar to $150,000 under the new rules from $10,000 -- a level unchanged since 1960. Royalty rates will rise to 16.67% from 12.5%, and the minimum amount companies can bid at oil and gas auctions will increase to $10 an acre from $2. The rental rate for a 10-year lease will double to $3 an acre for the first two years, eventually rising to $15 per acre in the final years. The fees can be adjusted for inflation after 10 years. The Reuters Power Up newsletter provides everything you need to know about the global energy industry. Sign up here. https://www.reuters.com/business/energy/us-finalizes-big-reforms-federal-oil-gas-drilling-2024-04-12/