2024-03-06 12:33

March 6 (Reuters) - Campbell Soup (CPB.N) , opens new tab edged past market estimates for quarterly sales and profit on Wednesday and stuck to its annual forecasts, helped by steady demand for branded, ready-to-eat meals and strength in its food service business. Prices across Campbell's products rose 1%, while overall volumes dipped 2% during the reported quarter, as holiday promotions encouraged shoppers to indulge in its Goldfish crackers and Pepperidge Farm cookies. The pace of price increases has slowed from last year's mid-double-digit rise, as most food companies try to limit pricing to cope with subdued demand. Packaged foods peers Kraft Heinz , Mondelez (MDLZ.O) , opens new tab, McCormick (MKC.N) , opens new tab, Hershey (HSY.N) , opens new tab and PepsiCo (PEP.O) , opens new tab have all flagged softer volume growth in their latest quarterly results. Still, benefits from prior price hikes and easing supply chains helped Campbell's gross profit margin climb 31.6%, from last year’s 30.5%. Net sales in its Meals & Beverages segment - Campbell's biggest revenue churner - declined 2%, owing to weaker demand for retail products in the U.S., including ready-to-serve and condensed soups as well as Pace Mexican sauces. Sales in the Snacks division were flat in the quarter. The company, which is set to close its buyout of Rao's sauce maker Sovos Brands next week, posted second-quarter net sales of $2.46 billion, slightly above analysts' average estimate of $2.44 billion, according to LSEG data. It logged adjusted earnings of 80 cents per share, better than the 77 cents analysts were expecting. The New Jersey-based firm reaffirmed its fiscal-year 2024 target for net sales and earnings for the second time in a row. Shares of the company were down marginally in trading before the bell. https://www.reuters.com/business/retail-consumer/campbell-soup-beats-quarterly-estimates-steady-demand-quick-meals-2024-03-06/

2024-03-06 12:27

March 6 (Reuters) - Pipeline operator Enbridge (ENB.TO) , opens new tab said on Wednesday it will invest about $500 million in expanding its pipeline and storage assets to improve its U.S. Gulf Coast presence. Enbridge operates North America's biggest oil pipeline network, the Mainline, which moves Canadian crude from Alberta to U.S. and eastern Canadian refineries. The company said it will acquire two marine docks and land from Flint Hills Resources for about $200 million, and is planning to invest about $100 million on Gray Oak Pipeline expansion. The company also sanctioned about $200 million of offshore pipelines to service Shell (SHEL.L) , opens new tab and Equinor's (EQNR.OL) , opens new tab sanctioned offshore oil and gas project Sparta in the Gulf of Mexico. https://www.reuters.com/markets/commodities/enbridge-invest-about-500-million-pipeline-assets-2024-03-06/

2024-03-06 12:21

Move comes after huge Emirati investment deal Egypt has pledged exchange rate flexibility in past Economy hampered by chronic forex shortage CAIRO/DUBAI, March 6 (Reuters) - Egypt secured an expanded $8 billion deal on Wednesday with the International Monetary Fund, hours after the central bank unshackled its currency and delivered a 600 basis points rate hike in a push to stabilise the economy. Additionally, Egypt would obtain a $1.2 billion loan for environmental sustainability, bringing its total from the IMF to more than $9 billion, the government said. This was towards the lower end of what some analysts expected. The currency weakened to beyond 50 Egyptian pounds to the dollar - far beyond previous records - from about 30.85 pounds, a level Egypt has for months tried to defend. It closed at 49.4 to the dollar. A more flexible exchange rate is seen as crucial for restoring investor confidence and is a key demand of the IMF, which had been in talks to expand the Fund's current, $3 billion support programme for the Arab world's most populous nation. Egypt has in the past said it would shift to a more flexible exchange rate, only to return to closely managing the currency whenever the pound weakened. This time, after struggling with a prolonged economic crisis linked to chronic foreign currency shortages, it may be betting that hard currency inflows including a $35 billion investment deal signed in late February with the United Arab Emirates, will prevent a freefall. Analysts say doubts remain over commitment to structural reforms that have been repeatedly dodged, including reducing the sprawling economic interests of the state and the military. The central bank said it had raised the overnight lending rate to 28.25% and its overnight deposit rate to 27.25% in a bid to tame inflation, which rose to record levels last year and has caused years of hardships to tens of millions of Egyptians. "To ensure a smooth transition, the CBE will continue to target inflation as its nominal anchor, allowing the exchange rate to be determined by market forces," it said in a statement. "Sufficient funding has been secured to avail foreign exchange liquidity," it said. Central bank governor Hassan Abdalla told reporters that as in other countries, the bank would still have the ability to intervene if there were "illogical movements" in the currency. While the central bank already had an inflation target, it also sought to manage the pound. Egypt's international bonds soared in early trading in anticipation of the IMF deal, with longer-dated bonds jumping around 4 cents before shedding some of the gains. The bonds eventually gave back most of the advance, with the 2047 up 0.2 cents at 79.9 cents, after rising as high as 83.5, according to Tradeweb data. The premium demanded by investors to hold Egypt's international bonds over safe-haven U.S. Treasuries tightened to as little as 529 basis points, its lowest level since June 2021, according to JPMorgan (.JPMEGDEGYR) , opens new tab. The spread was last at 581 bps. CLEARING BACKLOGS The foreign currency shortage has curbed local business activity and led to backlogs at ports and delays in payments for commodities. Remittances from Egyptians working abroad, the country's top single source of foreign currency, have slowed sharply amid expectations that the pound would fall. The war in Gaza and attacks on Red Sea shipping have put at risk receipts from tourism and Suez Canal traffic, two other main sources of hard currency. "The unification of the exchange rate is crucial, as it facilitates the elimination of foreign exchange backlogs," the central bank said. Since early 2022, when the foreign currency shortage worsened, the pound has now lost more than two-thirds of its value against the dollar in a series of staggered devaluations. The announcement on Feb. 23 that Emirati sovereign fund ADQ will invest $24 billion and convert $11 billion of existing deposits within two months had eased pressure on the currency, with the black market rate strengthening to under 50 pounds from more than 60 pounds previously. On currency markets on Wednesday, one-month non-deliverable forwards stood at around 51 to the dollar - a touch above the spot rate - but 12-month contracts traded at just over 55 to the dollar, indicating the currency might have to adjust some more in the months ahead. Another return to managing the exchange rate would limit the benefits of Wednesday's move, said Kaan Nazli, portfolio manager at Neuberger Berman. "I guess the proof will be in the pudding, but there is a bigger chance than before thanks to the UAE funding," he said. Along with arrears to foreign companies, Egypt also faces a heavy foreign debt repayment schedule after spending on mega-projects under President Abdel Fattah al-Sisi that has been questioned by critics and the government says it will rein in. The banking system had a net foreign asset deficit of 841 billion Egyptian pounds ($27.2 billion) as of Dec 31. https://www.reuters.com/world/middle-east/egypt-raises-interest-rates-by-600-bps-pound-tumbles-2024-03-06/

2024-03-06 12:18

Powell to kick off testimony at 10 a.m. ET CrowdStrike jumps on upbeat 2025 forecast JD.com climbs on Q4 rev beat, share buyback Futures up: Dow 0.19%, S&P 0.29%, Nasdaq 0.59% March 6 (Reuters) - U.S. stock index futures rose on Wednesday as investors awaited testimony by Federal Reserve Chair Jerome Powell before Congress that could help determine the central bank's monetary policy path. Powell kicks off two days of testimony with a hearing at 10 a.m. ET (1500 GMT) before the House Financial Services Committee, explaining to lawmakers why he is confident price pressures will keep easing without upending the job market or conversely why the window for a "soft landing" may be narrowing. "Powell is likely to stick to the narrative of patience and data dependency this week, but given the intense market focus on Fed timing, there is potential for a market reaction, particularly in the Q&A," said Seema Shah, chief global strategist at Principal Asset Management. Wall Street indexes closed more than 1% lower on Tuesday amid weakness in market leaders Tesla (TSLA.O) , opens new tab and Apple (AAPL.O) , opens new tab and as investor focus shifted to Powell and the Fed after signs of sticky inflation in February dampened hopes of early interest rate cuts. Traders see a 69.1% chance of the first rate cut this year in June, as per CME Group's FedWatch tool. At the start of 2024, they were betting on March as the starting point for the Fed's easing cycle. Investors will also be tracking private payrolls and job openings data, due later in day, ahead of the crucial nonfarm payrolls report on Friday. At 6:55 a.m. ET, Dow e-minis were up 73 points, or 0.19%, S&P 500 e-minis were up 14.75 points, or 0.29%, and Nasdaq 100 e-minis were up 105.75 points, or 0.59%. Megacap growth and technology stocks rose in premarket trading, with Tesla recovering 0.9% after a 3.9% slide in the previous session, while AI darling Nvidia (NVDA.O) , opens new tab rose 1.1%. U.S.-listed shares of China's JD.com advanced 11.9% after the e-commerce group reported fourth-quarter revenue above estimates and upsized its share repurchase program. Shares of cryptocurrency-linked companies such as Coinbase Global (COIN.O) , opens new tab and MicroStrategy (MSTR.O) , opens new tab gained 5.8% and 11.3%, respectively, as bitcoin rebounded. CrowdStrike Holdings (CRWD.O) , opens new tab soared 24.3% after the company forecast annual results above Wall Street estimates, lifted by strong enterprise spending on cybersecurity to counter rising online threats. Other cybersecurity stocks Palo Alto Networks (PANW.O) , opens new tab, Fortinet (FTNT.O) , opens new tab and Zscaler (ZS.O) , opens new tab rose between 4% and 4.6%. https://www.reuters.com/markets/us/futures-gain-ahead-powells-testimony-economic-data-2024-03-06/

2024-03-06 12:14

MOSCOW, March 6 (Reuters) - International Atomic Energy Agency (IAEA) chief Rafael Grossi met Russian President Vladimir Putin on Wednesday after talks with energy officials over safety at the Russian-occupied Zaporizhzhia nuclear power plant in Ukraine. The Kremlin published introductory remarks by Putin and Grossi at the meeting in Sochi in southern Russia but gave no details of the closed-door meeting that followed. Putin told Grossi he was prepared to discuss "particularly sensitive and important issues on the agenda ... and do everything to ensure security anywhere we are in one or another involved in nuclear energy", the Kremlin said. Grossi met the head of state nuclear power company Rosatom Alexei Likhachev alongside Putin. Russian forces seized Europe's largest nuclear power plant in their 2022 invasion of Ukraine and have occupied it since. Grossi is due to meet Putin in the southern Russian city of Sochi later on Wednesday. Zaporizhzhia lies close to the front lines in a part of southern Ukraine which Moscow claims to have annexed. All six of its reactors are shut down, but it requires constant power and a water supply to keep it cool and prevent a potentially catastrophic meltdown. It was damaged by fire when it was taken over in March 2022, and Russian and Ukrainian troops continue to clash nearby, accusing each other of shelling around the station. The IAEA has been trying to set up a safety mechanism to prevent accidents. MAIN FOCUS Grossi held talks with state nuclear power company Rosatom where safety at Zaporizhzhia was the main focus, the RIA news agency said, citing Rosatom. He also had discussions with the Russian defence and foreign ministries. RIA reported that Grossi said the talks were "tense", without elaborating. An IAEA spokesperson denied Grossi had described the talks as tense. Zaporizhzhia has lost its connection to all its external power lines eight times in the past 18 months, forcing it to rely on diesel generators for essential functions such as cooling the fuel in its reactors. While one of its main power lines is currently functioning, the IAEA says the situation at the plant remains precarious. One of the plant's six reactors, according to the IAEA, needs to be kept in a hot shutdown mode in order to produce steam required for nuclear safety, including the processing of liquid radioactive waste in storage tanks. Ukraine said last year it feared the plant could face a shortage of water needed to keep it cool, after a giant dam was blown up down river, lowering the level of the adjacent reservoir. Grossi inspected wells last month to determine if there was sufficient water for cooling, and welcomed a reduction in shelling around the site. Russian news agency TASS reported that Grossi had concluded the water supply was sufficient. https://www.reuters.com/world/putin-meet-iaeas-grossi-sochi-2024-03-06/

2024-03-06 12:07

BENGALURU, March 6 (Reuters) - A strong U.S. dollar will maintain the status quo in the near term, as markets brace for a risk the Federal Reserve's first interest rate cut gets delayed to the second half of this year, according to a Reuters poll of foreign exchange strategists. Shrugging off a weakening trend late last year, the dollar has gained against nearly every currency tracked by traders and investors, and is up nearly 2.5% for the year. Much of the greenback's recent strength is based on stronger-than-expected U.S. economic performance and receding calls for early Fed rate cuts. The timing of the latter is likely to have a bigger say on the currency's moves in the near-term. "Over the next three months, I think we're probably going to see the dollar hold in the ranges we've been seeing since the start of the year," said Shaun Osborne, chief currency strategist at Scotiabank. "If we're in a situation where instead of the soft landing, it's a no-landing scenario, that potentially reduces rate cut opportunities for the Fed quite significantly over the balance of this year, in which case the dollar probably stays relatively strong." Despite trader positioning data showing speculators increasing their net long dollar bets to the highest since last November, analysts in a Reuters March 1-6 poll were somewhat divided on how positioning will look over the next three months. Among 66 analysts who answered an additional question, a slim majority of 35 expected not much change, while 17 predicted a decrease in net longs. Eleven said an increase in net longs and only three said a reversal to net shorts. "One thing that's happened this year is investors have had a hard time playing with the dollar and they're looking for trades that...take the dollar out of it. I think that's the way it will continue to lean," said Dan Tobon, head of G10 FX strategy at Citi. "Over the coming three months, we'll have a marginally weaker dollar, but not get the type of flows that really create stretched positioning situations off the back of that." While currency strategists still expected the greenback to weaken against most major currencies over a 12-month period, median forecasts showed no big change to analysts' predictions from a February poll. The euro , down around 1.5% for the year, was forecast to gain 3.0% to trade around $1.12 in a year. The common currency was last changing hands around $1.09 on Wednesday. Even the battered Japanese yen , which has lost nearly a third of its value since 2021, was expected to gain over 9.0% in 12 months to trade at 137.00/dollar. After failing to make any headway against the greenback in 2023, the Aussie and Kiwi dollars were predicted to gain around 7.3% and 5.0% respectively, recouping their 2024 losses and trading higher against the U.S. dollar in coming months. The Australian dollar and the New Zealand dollars - last trading around $0.65 and $0.61, respectively, on Wednesday - were forecast to rise to $0.70 and $0.64 by end-Feb. (For other stories from the March Reuters foreign exchange poll:) https://www.reuters.com/markets/us/poll-us-dollars-strength-persist-markets-eye-cautious-fed-2024-03-06/