2024-03-27 19:47
WASHINGTON, March 27 (Reuters) - The catastrophic bridge collapse that closed the Port of Baltimore to ship traffic on Tuesday is causing some logistics headaches, but is unlikely to trigger a major new U.S. supply chain crisis as competing East Coast ports are poised to handle more cargo, economists and logistics experts say. With six people presumed dead after a container ship collision destroyed the Francis Scott Key Bridge, it remained unclear how long the span's twisted superstructure would block the harbor's mouth. But port officials from New York to Georgia were busy fielding queries from shippers about diverting Baltimore-bound cargo from containers to vehicles and bulk material. "We're ready to help. We have ample capacity to absorb any surge in container traffic," Port of Virginia spokesperson Joe Harris told Reuters. The Norfolk-based port is expected to be a major beneficiary due to its proximity to Baltimore, but ports in Savannah and Brunswick, Georgia, also were poised to absorb some traffic, a spokesperson for the Georgia Ports Authority said. U.S. Transportation Secretary Pete Buttigieg told MSNBC on Wednesday that while there were many ports on the East Coast, "there is no substitute for the Port of Baltimore being up and running," as it is the top U.S. port for vehicle imports and exports, including farm and construction machinery. Treasury Secretary Janet Yellen said a federal supply chain task force was meeting on Wednesday to assess the port's closure but said the Biden administration "will do everything as quickly as we possibly can" to reopen it. Supply chain experts say U.S. port infrastructure is more resilient than during 2021 and 2022, when they were understaffed and clogged with ships and containers, spiking prices and contributing to inflation as Americans binged on goods purchases during the COVID-19 pandemic. "The collapse of the Francis Scott Key Bridge in Maryland is another reminder of the U.S. vulnerability to supply-chain shocks, but this event will have greater economic implications for the Baltimore economy than nationally," Ryan Sweet, chief U.S. economist at Oxford Economics, wrote in a note. "We don’t anticipate that the disruptions to trade or transportation will be visible in U.S. GDP, and the implications for inflation are minimal," he added. NO SHIPS, NO WORK The impact on the Port of Baltimore's more than 2,000 workers who load and unload cargo vessels could be significant if the closure lasts more than a few days. The dockworkers are day laborers, said Scott Cowan, head of the International Longshoreman's Association Local 333 in Baltimore, meaning they only work when there is cargo to be moved. He estimated there might be about a week's work clearing the existing inventory at the port. After that, the workers could lose a collective $2 million a day in lost wages, he said. The port directly generates , opens new tab over 15,000 jobs, with an additional 140,000 jobs dependent on port activity, according to Maryland Governor Wes Moore's office. VEHICLE PORT One area of concern is higher shipment costs for imported cars and trucks and for exports of farm tractors and construction equipment as Baltimore is the largest U.S. port for "roll-on, roll-off" vehicle shipments, with over 750,000 cars and light trucks handled by state-owned terminals in 2023, according to Maryland Port Administration data. Ford Motor Co (F.N) , opens new tab and General Motors (GM.N) , opens new tab said they would reroute some affected shipments but the impact would be minimal, while Volkswagen (VOWG_p.DE) , opens new tab is unaffected because its new Sparrows Point vehicles terminal is located at a former steel mill site on the bridge's Chesapeake Bay side. The risk of car price spikes is further dampened by a recovery in automotive inventories to their highest level since May 2020, after being drawn down sharply during the pandemic. The industry's inventory-to-sales ratio is near its 32-year-average of 1.96 to 1 according to Census Bureau data, and sales incentives have risen in recent months as high interest rates dampen demand. COASTAL SHIFT Ryan Peterson, founder and CEO of logistics platform Flexport, said that with Baltimore handling only 1.1 million twenty-foot equivalent containers last year - ranking 12th in the U.S., any impact on container rates and shipping costs from the disruption would be far less than increases caused by cargoes diverted from the Suez Canal because of attacks on Red Sea shipping by the Houthi militant group in Yemen. But the port outage could contribute to a shift of container traffic to West Coast U.S. ports that was already underway over the past several months because of the lack Asian shippers' access to the Suez route and reduced capacity in the Panama Canal due to low water levels. Peterson said the potential for an East Coast longshoreman strike in late September - at the height of Christmas-season imports - also has some shippers considering West Coast shipments. "East Coast volumes are down and there is the ability for those ports to flex up to handle this," Peterson said. 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/baltimore-bridge-port-blockade-wont-trigger-new-supply-chain-crisis-experts-say-2024-03-27/
2024-03-27 19:43
ST GALLEN, Switzerland, March 27 (Reuters) - The Swiss National Bank was able to cut interest rates last week because inflation pressure has declined, Vice Chairman Martin Schlegel said on Wednesday. "The lower inflation pressure has allowed us to reduce interest rates to 1.5% from 1.75%," Schlegel told an event in St. Gallen, north eastern Switzerland. The SNB also reduced its inflation forecasts last week, saying it now expects price rises of 1.4% for 2024, 1.2% for 2025 and 1.1% for 2026. Without the SNB cutting rates, these forecasts would have been lower, Schlegel said. Get a look at the day ahead in European and global markets with the Morning Bid Europe newsletter. Sign up here. https://www.reuters.com/markets/europe/lower-inflation-pressure-enabled-rate-cut-snb-vice-chairman-2024-03-27/
2024-03-27 19:36
WASHINGTON, March 27 (Reuters) - Some companies planning to use new U.S. tax credits to deploy hydrogen projects urged the Treasury Department this week to ease proposed environmental requirements, warning that they could hinder the nascent industry’s takeoff. Treasury and the Internal Revenue Service hosted hearings this week on the guidance they released in December governing implementation of the Clean Hydrogen Production, or 45V, tax credit, one of the most lucrative incentives in the 2022 Inflation Reduction Act. The credit would create a 10-year incentive for clean hydrogen production of up to $3.00/kilogram. The credit has been at the center of heavy lobbying by industry groups seeking to build projects, as well as environmental advocates worried that a proliferation of hydrogen projects will backfire by boosting energy demand and raising greenhouse gas emissions. The Treasury's proposal would require hydrogen producers seeking the 45v credits to prove they have used clean electricity that has been recently built and sourced from the same region as the project. They would also need to show that the power was generated around the same time that the hydrogen was produced. Australian firm Fortescue said the requirements would hurt a project it is pursuing the Pacific Northwest, which won Energy Department support last year. “This investment would not qualify for the tax credit, because we plan to use a mix of surplus hydropower and other renewables," Fortescue North America CEO Andrew Vesey told the hearing. Frank Wolak, president of the Fuel Cell and Hydrogen Energy Association industry group, said the requirements had cooled investor interest in hydrogen projects. The lobby group asked that projects launched before the guidance is finalized be exempted. Dorothy Davidson, CEO of the DOE-backed Midwest hydrogen hub, asked Treasury to allow projects to source at least 10% of their power from pre-existing zero-carbon sources like nuclear, and also permit the use of renewable natural gas from farms and landfills. The Midwest hub project relies on existing nuclear energy and natural gas. Meanwhile, some green hydrogen companies and a number of NGOs urged the IRS to keep the requirements in place. "Weak section 45V rules would undermine both the achievement of the Biden Administration’s climate goals and the credibility of the hydrogen industry," said Claire Behar, chief commercial officer of Hy Stor, a green hydrogen firm with a project in Mississippi. The Reuters Daily Briefing newsletter provides all the news you need to start your day. Sign up here. https://www.reuters.com/sustainability/climate-energy/hydrogen-industry-pleads-easier-path-us-tax-credits-2024-03-27/
2024-03-27 18:55
MEXICO CITY, March 27 (Reuters) - Mexico's economy is seen growing between 2.5% and 3.5% this year and then expanding 2.0% to 3.0% in 2025, a draft budget from the country's finance ministry showed on Wednesday. Inflation in Latin America's second-biggest economy is expected to tick down to 3.8% this year, according to the draft, essentially meeting the central bank's target of 3%, plus or minus one percentage point. The expected 2024 inflation rate would also signal a slowdown from the 4.40% annualized growth rate in consumer prices in February. For 2025, the draft budget predicts that inflation will further ease to 3.3%. The document, which is used by lawmakers to plan future spending, also sees Mexico's peso trading at 17.8 pesos per dollar this year, and slightly weakening to 18.0 versus the U.S. currency next year. Average crude oil production this year is forecast at 1.85 million barrels per day (bpd), rising slightly to 1.86 million bpd in 2025. While the draft budget said the estimates refer to crude volumes, the government generally combines crude with condensate liquids in its figures. Official data shows that state-owned oil company Pemex pumped an average of 1.55 million bpd of crude in February, its lowest level since 1979. Pemex's oil output, the sales of which are a major contributor to public finances, has been on a steady decline from its peak of 3.4 million bpd two decades ago. Meanwhile, crude exports are expected to reach 967,600 bpd this year and drop to 958,400 bpd next year. The Reuters Daily Briefing newsletter provides all the news you need to start your day. Sign up here. https://www.reuters.com/world/americas/mexican-economy-seen-growing-up-35-2024-draft-budget-shows-2024-03-27/
2024-03-27 18:31
NEW YORK, March 27 (Reuters) - Reddit (RDDT.N) , opens new tab stock's stellar market debut has drawn significant bearish bets against the social media forum in its first few days of trading, data from analytics company Ortex on Wednesday showed. Based on 2.15 million Reddit shares out on loan, at least 7.1% of the company's free share float has been sold short, according to a preliminary Ortex estimate. "This is very high for a stock that just started trading, and is an indication that some market participants have a negative view of the future price of Reddit," Ortex co-founder Peter Hillerberg said. Short sellers aim to profit by selling borrowed shares and buying them back later at a lower price. On Wednesday, Reddit shares fell 12% to $56.91, snapping a two-day streak of gains. In its market debut on March 21 Reddit shares closed at $50.44, 48% above its initial public offering price. The stock is off more than 20% from its record high of $74.74 hit on Tuesday. In the options market, the frantic trading since the IPO cooled somewhat as the retreating shares prompted traders to moderate bullish bets. Some 53,000 Reddit options contracts had changed hands by 1:30 p.m. ET (1730 GMT), with sentiment leaning toward bearish bets, Trade Alert data showed. The day's volume was projected to hit 82,000 contracts, down from 131,000 contracts traded on Tuesday. The Technology Roundup newsletter brings the latest news and trends straight to your inbox. Sign up here. https://www.reuters.com/technology/short-sellers-target-reddit-shares-stock-slips-2024-03-27/
2024-03-27 18:02
March 27 (Reuters) - Shares of Robinhood Markets (HOOD.O) , opens new tab jumped on Wednesday after the financial technology firm launched a credit card, as it expands its product offerings in order to reduce its reliance on market-sensitive trading revenue. The Menlo Park, California-based company's shares were last up 4% in afternoon trading, having hit their highest since December 2021 earlier in the session. Retail-investor focused Robinhood is set to offer its premium 'Gold' tier customers a credit card which would have no annual fee, no foreign transaction fees and offers 3% cashback, in the form of reward points, on spends. "Tieing the credit card to Robinhood's Gold program should be accretive to revenues because of the profitable options trading and use of margin that comes with it," said Michael Ashley Schulman, partner and CIO at Running Point Capital Advisors. Robinhood was at the center of the 2021 retail trading frenzy, driven by mom-and-pop investors who used the company's commission-free platform to pump money into so-called "meme stocks" during the pandemic-era lockdowns. In February, the company said it was aiming to expand margins while being focused on driving 'profitable growth' this year, after reporting a surprise quarterly profit. It has also benefited from the increased activity of retail traders - its main client base - this year against a rally in both the capital as well as crypto markets. The turnaround in trading activity and an increased focus on profitability have together sparked a rally in the fintech's stock, that has surged over 50% so far this year. "Robinhood has been strategizing for a while to increase customer excitement, spur engagement, and incentivize more established individual investors," Schulman added. Short interest in the stock is currently at 5.88% of the free float, with short-sellers sitting on over $200 million in paper losses from the beginning of 2024, as of previous close, according to data from Ortex. 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/business/finance/robinhood-hits-over-2-year-high-credit-card-launch-fuels-investor-euphoria-2024-03-27/
