2024-03-13 10:15

A look at the day ahead in U.S. and global markets from Mike Dolan Even as U.S. inflation missed forecasts again and Treasury debt yields reared up in reaction, AI-fueled Wall St stock indexes powered on regardless to record closing highs - either ignoring the readout, or perhaps even thriving on it. While economists sliced and diced the slightly hotter-than-expected consumer price report for February, there was little doubt about the bond market disappointment at least. Although annual "core" CPI inflation fell again to 3.8% - its lowest in almost three years - it was a tenth of a percentage point above forecast, the headline inflation rate ticked up surprisingly to 3.2% and monthly readings were sparky. Many blamed statistical quirks in official models for the early-year stickiness, with rent estimates and gasoline exaggerating the data and services inflation excluding shelter - closely watched by the Federal Reserve - better behaved. But interest rate futures shaved expected Fed easing expectations for the year nonetheless and both two and 10-year Treasury yields pushed higher - the latter up by more than 5 basis points to 4.15%, where it sat early on Wednesday. A poorly received 10-year note auction - partly because of the CPI surprise - possibly goosed that move. And some $22 billion of 30-year bonds go under the hammer later on Wednesday. But the artificial intelligence obsession in stocks was reinvigorated by an AI-infused results beat from Oracle (ORCL.N) , opens new tab, whose shares surged 12% as it said it was due to make a joint announcement with AI bellwether Nvidia (NVDA.O) , opens new tab. Nvidia stock, in turn, recovered much of the past week's losses and surged 7%. What's more, shares in another AI darling, Arm Holdings , the British chip designer backed by Softbank Group (9984.T) , opens new tab, gained 2% as markets braced for increased trading activity following the expiration of the lockup period tied to its blockbuster initial public offering last September. All of which helped lift S&P500 (.SPX) , opens new tab to a new closing high despite the inflation cloud and futures held those gains on Wednesday. Although with markets still pricing Fed rate cuts even with long-term inflation expectations settling above its 2% target, there may be argument that stocks are beginning to like an economy running slightly hot. Bank of America on Tuesday upped its S&P500 profit growth forecast for this year to 12%, backing its raised year-end target for the index to 5,400. Other more skeptical investors remain wary, with GMO's Jeremy Grantham this week describing the AI "bubble" as "a new bubble within a bubble." Overseas, China's stocks slipped again on Wednesday - dragged down by ailing property developers as Country Garden (2007.HK) , opens new tab missed a coupon payment on its debt. The yuan also fell back sharply. Japan's Nikkei index (.N225) , opens new tab fell for a third straight session as investors assessed the likelihood of a policy shift at next week's Bank of Japan meeting. With wage growth key to the BOJ decision, Toyota (7203.T) , opens new tab agreed to give factory workers their biggest pay increase in 25 years on Wednesday and that heightened expectations that bumper pay raises will give the central bank leeway to tighten policy. The dollar was up more broadly (.DXY) , opens new tab, however, and dollar/yen nudged higher. Bitcoin , which has trebled since September, continued to surge above $73,000 ahead of next month's "halving" event. In politics, U.S. President Joe Biden and former President Donald Trump both clinched their parties' nomination on Tuesday, kicking off the first U.S. presidential election rematch in nearly 70 years. Key diary items that may provide direction to U.S. markets later on Wednesday: * U.S. Treasury auctions $22 billion of 30-year bonds * U.S. corp earnings: Lennar, Dollar Tree * U.S. Secretary of Commerce Gina Raimondo visits Thailand 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/global-markets-view-usa-graphics-2024-03-13/

2024-03-13 10:10

MUMBAI, March 13 (Reuters) - The Indian rupee logged its worst day against the dollar in nearly three weeks on Wednesday, pressured by foreign outflows, while weakness in regional peers following hotter-than-expected inflation data in the United States also weighed. The rupee closed at 82.8625 to the dollar, down from its previous close of 82.7675, recording its biggest single-session decline since Feb. 23. The local unit was under pressure due to an outflow of around $2 billion pertaining to British American Tobacco's stake sale in Indian conglomerate ITC, traders said. "The outflows because of a block deal is, of course, a temporary blip," said Jigar Trivedi, senior research analyst - currencies and commodities at Reliance Securities. However, considering the weakness in the equity markets and the trend in the dollar index, the rupee may weaken to 83.00 and eventually to 83.20, he added. Data released on Tuesday showed the U.S. consumer price index increased in February, topping analyst forecasts and indicating price pressures may be sticky. Although the CPI rose 0.4% in February, in line with forecasts, the 3.2% year-on-year gain came in just ahead of an expected 3.1% increase. Core inflation also topped estimates. Investors further reduced the possibility of a rate cut by the Federal Reserve in May. The possibility of a rate cut in next week's meeting is almost negligible. The U.S. central bank is set to meet next on March 19-20. Most Asian currencies fell, with the Korean won dropping 0.4% following the U.S. data. The dollar index climbed above 103, while U.S. Treasury yields extended their rise. USD/INR forward premiums dropped with the one-year implied yield down five basis points at 1.65%. The Reuters Daily Briefing newsletter provides all the news you need to start your day. Sign up here. https://www.reuters.com/world/india/rupee-logs-worst-day-3-weeks-outflows-weak-asian-peers-weigh-2024-03-13/

2024-03-13 07:34

BERLIN, March 13 (Reuters) - Elon Musk arrived on Wednesday at Tesla's European gigafactory in Gruenheide, Germany, where operations had resumed after an arson attack on a nearby electricity pylon last week led to a costly power outage that halted production at the plant. Pictures showed the Tesla chief executive arriving at the German factory. Works council head Michaela Schmitz told local radio broadcaster rbb there would be a team meeting at the plant with Musk. She said production had resumed after the week-long outage. Tesla has said it expects hundreds of millions of euros in damages as a result of the disruption to production. "The machines have been restarted in a controlled and safe manner so that the early shift can resume," Schmitz told rbb. Tesla's factory on the outskirts of Berlin was reconnected to the grid on Monday after the March 5 arson attack, claimed by far-left activists. Musk has not made any statements about his plans while in Germany, though local media have said that he might meet with political leaders in the state of Brandenburg. Stay up to date with the latest news, trends and innovations that are driving the global automotive industry with the Reuters Auto File newsletter. Sign up here. https://www.reuters.com/business/autos-transportation/production-up-running-teslas-factory-germany-rbb-reports-2024-03-13/

2024-03-13 07:23

BRUSSELS, March 13 (Reuters) - A Belgian farmer is taking French oil and gas company TotalEnergies to court, seeking compensation for climate change-fuelled damage to his farm and a legal order for the company to halt investments in new fossil fuel projects. The case, filed on Wednesday at the Tournai commercial court, is the first climate change-related lawsuit in Belgium to target a multinational company. It follows a case in which thousands of citizens successfully sued the Belgian government to demand stronger greenhouse gas emissions cuts. A spokesperson for TotalEnergies declined to comment on the case. Hugues Falys, who farms a herd of cattle in the municipality of Lessines, argues that, as one of the world's top 20 CO2-emitting companies, TotalEnergies is partly responsible for damage extreme weather did to his operations from 2016-2022. During that period, successive droughts reduced the yield of his meadows where he grows fodder for the animals - forcing him to buy feed and, eventually, reduce the size of his herd. "We are an activity completely dependent on the climate," Falys told Reuters. He argues TotalEnergies has failed to comply with Belgian law, which states anyone who causes damage must make reparations for it. It is a similar argument to the one used against the Belgian government in the previous climate case. Falys and three campaign groups joining the legal action are seeking an injunction that would force TotalEnergies to overhaul its business plan. Their demands include that the company immediately halt investments in new fossil fuel projects, and reduce its oil and gas production each by 47% by 2030. They also seek damages - which, if awarded, Falys intends to donate to a sustainable farming organisation in Belgium. 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/belgian-farmer-takes-totalenergies-court-seeking-climate-damages-2024-03-13/

2024-03-13 07:16

OSLO, March 13 (Reuters) - Denmark's Orsted (ORSTED.CO) , opens new tab said on Wednesday it has agreed to sell stakes in four U.S. onshore wind farms with a total capacity of 957 megawatt to investment group Stonepeak for around $300 million. The deal allows Orsted to "recycle capital to support its business plan and future value-creating renewable energy projects", the company said in a statement. It said Stonepeak will receive 80% of cash distributions associated with the projects, while Orsted will continue to operate the portfolio of assets. Orsted retains a unilateral call option for Stonepeak's interests that can be exercised under certain circumstances after the closing of the transaction, it said. 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/orsted-sells-stakes-us-wind-farms-300-mln-2024-03-13/

2024-03-13 07:09

ZURICH, March 13 (Reuters) - Skin care company Galderma on Wednesday announced a price range of 49 to 53 Swiss francs for its upcoming 2.3 billion Swiss francs ($2.6 billion) flotation. The offering consists of up to 40.5 million new shares and 277,000 existing shares, said the company. The offer period will run from Wednesday and is anticipated to end on March 20, 2024. There is also over-allotment option of up to 6.1 million existing shares, the Swiss company said, which if fully exercised will lead to an offer size of 2.3 billion Swiss francs. The Swiss company's initial public offering, which could be one of the biggest flotations in Europe this year, was originally announced last week. Chief Executive Flemming Ornskov said last week there had been significant interest in the flotation of the company, the main owners of which include Swedish private equity company EQT (EQTAB.ST) , opens new tab, Singapore's GIC and the Abu Dhabi Investment Authority (ADIA). All three are expected to remain invested in the company, which will have an enterprise value - equity plus debt - of around $17 billion after the IPO. A final offer price will be published on March 21, Galderma said. The company said it expected to complete its listing and start trading in Switzerland on March 22. ($1 = 0.8776 Swiss francs) Get U.S. personal finance tips and insight straight to your inbox with the Reuters On the Money newsletter. Sign up here. https://www.reuters.com/markets/deals/skin-care-company-announces-price-range-26-billion-flotation-2024-03-13/