2024-02-22 06:20

Nvidia's eye-popping results drives global tech rally Tokyo's Nikkei scores first record high since 1989 S&P 500, Dow, STOXX 600, MSCI ACWI also post records Bond yields mostly higher waiting for rate cuts Graphic: World FX rates NEW YORK/LONDON, Feb 22 (Reuters) - AI chipmaker Nvidia's stunning results sparked a worldwide wave of record highs in equity markets on Thursday, including the first new peak for Japan's Nikkei since 1989, while bond yields mostly rose as economic data kept immediate hopes of interest rate cuts at bay. The benchmark S&P 500 index (.SPX) , opens new tab and Dow Jones Industrial Average on Wall Street, along with Europe's pan-regional STOXX 600 index and MSCI's all-country world index also hit record highs as Nvidia's (NVDA.O) , opens new tab shares surged 16.4% and lifted artificial intelligence-related chip stocks around the globe. National bourses in Frankfurt (.GDAXI) , opens new tab and Paris (.FCHI) , opens new tab set fresh highs too, while Chinese stocks overnight extended their winning streak to eight straight sessions. After the bell on Wednesday, Nvidia forecast a roughly three-fold jump in first-quarter revenue and beat expectations for fourth-quarter revenue on strong demand for its AI chips. Nvidia added $277 billion in stock market value, the biggest one-day gain in a company's market capitalization in history. Artificial intelligence provides the means to boost productivity that economies have been seeking for two decades, said Thomas Hayes, chairman and managing member of Great Hill Capital LLC in New York. "What Nvidia represents is the catalyst for the roaring '20s in terms of productivity enhancement moving forward and as productivity increases, it keeps a lid on inflation," he said. MSCI's gauge of stocks across the globe (.MIWD00000PUS) , opens new tab rallied 1.67% to set closing and intra-day record highs, while the STOXX 600 index (.STOXX) , opens new tab in Europe closed up 0.82% after hitting an all-time high. The STOXX technology index (.SX8P) , opens new tab is up 12.4% year-to-date and is trading at more than 23-year highs. Dutch chipmaking equipment supplier BESI (BESI.AS) , opens new tab rose 4.9% to a record after exceeding fourth-quarter targets on demand for AI-related parts. On Wall Street, the Dow Jones Industrial Average (.DJI) , opens new tab rose 1.18%, to close above 39,000 for the first time. The S&P 500 (.SPX) , opens new tab advanced 2.11% and the Nasdaq Composite (.IXIC) , opens new tab climbed 2.96%. The S&P 500 and Nasdaq posted their biggest single-day gains since January and February 2023, respectively. The number of Americans filing new claims for unemployment benefits unexpectedly fell last week, indicating job growth likely remains solid in February and will reduce the urgency for the Federal Reserve to start cutting interest rates. The dollar index hit a three-week low and then pared losses as investors awaited new data for insight into when the Fed might begin cutting rates. The dollar index was down 0.038%, with the euro rising 0.05% to $1.0822. The Nikkei has jumped nearly 17% this year, with the S&P 500 and Nasdaq rallying about 7% and 8%, respectively, driven in large part by the expectations for AI. Nvidia is at the center of that boom. Thursday's record-setting charge included Tokyo Electron (8035.T) , opens new tab jumping 6%, chip-testing equipment maker Advantest (6857.T) , opens new tab surging 7.5% and another chip-related share, Screen Holdings (7735.T) , opens new tab, rallying more than 10%. "It has taken the Nikkei roughly 34 years to get to this record high but it is all being driven by strong earnings upgrades," said Absolute Strategy's global equities analyst Nick Nelson. There was a big difference from the last time the Nikkei peaked during its bubble, Nelson said. When the Nikkei set the all-time high in 1989, stocks were valued at almost four times what they are now, Nelson said. Euro zone yields drifted to multi-month highs as markets scaled back their bets on European Central Bank rate cuts to less than 100 bps this year after Fed minutes on Wednesday showed policymakers were concerned about moving too early. The latest ECB minutes showed its rate-setters were sticking with patience while new PMI data showed the downturn in euro zone business activity eased in February. The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was up 5.9 basis points at 4.712%. The yield on 10-year Treasury notes was down 0.2 basis points to 4.321% as longer-duration bonds were flat. While the bulk of Fed policymakers said they were concerned about the risks of cutting too soon, according to its meeting minutes, there was still broad uncertainty about how long borrowing costs should remain at their current lofty level. That reinforced the view among traders that any rate cut is not imminent, with market pricing suggesting one-in-three odds for a first reduction in May, according to CME Group's FedWatch Tool. Oil prices steadied as a big rise in U.S. crude inventories offset the supportive impact of another attack on shipping near Yemen. U.S. crude rose 70 cents to settle at $78.61 a barrel, and Brent settled up 64 cents at $83.6 a barrel. Gold prices fell from a near two-week high after jobless claims data indicated a strong U.S. economy, while investors awaited further economic data for guidance on the Fed's interest rate stance. U.S. gold futures settled 0.2% lower to $2030.70 an ounce. https://www.reuters.com/markets/global-markets-wrapup-1-2024-02-22/

2024-02-22 06:14

MUMBAI, Feb 22 (Reuters) - The Indian rupee will open higher on Thursday, tracking most Asian peers on upbeat risk, following which it is expected to run into dollar bids from importers. Non-deliverable forwards indicate the rupee will open at around 82.92-82.94 to the U.S. dollar, compared with 82.97 in the previous session. The domestic currency rose to 82.8650 on Wednesday before finishing at the day's low. Public sector banks were buyers of dollars, which a few market participants said was for the Reserve Bank of India while others said it was for their importer clients. "Whatever it may be, its evident that dips (in USD/INR) are finding good buyers," an FX trader at a bank said. The "back and forth" around the well-defined range of 82.80-83.30 will "just continue", he said. Asian currencies were mostly higher on Wednesday, while the dollar index hovered just below 104. Asian shares advanced and U.S. equity futures jumped after chip designer Nvidia's (NVDA.O) , opens new tab first-quarter revenue topped expectations. Meanwhile, the minutes of the Federal Reserve's January meeting alongside weaker-than-expected bond auction pushed U.S. Treasury yields higher. The bulk of policymakers at the Fed's latest meeting were concerned about the risks of cutting interest rates too soon, with broad uncertainty about how long borrowing costs should remain at their current level, the minutes showed. The odds of a Fed rate cut at the May meeting are less than 30% and a March rate cut has been priced out. The Fed is now expected to cut borrowing costs by 86 basis points (bps) this year, a far cry from the 175 bps cuts expected about seven weeks ago. The U.S. central bank "is in no mood to chop rates just yet", ING Bank said in a note. "The Fed can't feel comfortable cutting with month-on-month rates that annualize to scary levels." KEY INDICATORS: ** One-month non-deliverable rupee forward at 82.99; onshore one-month forward premium at 8 paisa ** Dollar index slips to 103.96 ** Brent crude futures at $83.04 ** Ten-year U.S. note yield at 4.32% ** As per NSDL data, foreign investors bought $358.5 million of Indian shares on Feb. 20 ** NSDL data shows foreign investors bought $221.6 million of Indian bonds on Feb. 20 https://www.reuters.com/markets/currencies/rupee-rise-tracking-asia-fx-importers-rbi-curb-upside-2024-02-22/

2024-02-22 06:13

BEIJING, Feb 22 (Reuters) - Five people were killed after a barge collided with a bridge over a waterway in China's Pearl River Delta near Guangzhou city, causing part of the bridge to break off, plunging vehicles into the water, Chinese state media reported on Thursday. The barge was travelling from Foshan city to a southern district of Guangzhou when it crashed into the bridge at 5:30 a.m. (2130 GMT) on the Hongqili Waterway, the Guangzhou Maritime Safety Administration said in a statement. Images on state-owned China Central Television (CCTV) showed an empty container barge lodged between two columns of the Lixinsha Bridge with part of the bridge's two-lane road deck missing. All road traffic on the bridge was halted. Four vehicles and an electric motorbike fell off the bridge. Two vehicles, which included a bus, plunged into the water and three other vehicles ended up on the barge, CCTV said. The bus was carrying only its driver. "The accident resulted in five deaths (one bus driver, one motorcycle driver and three people in a van)," CCTV reported. "Two people were treated in the hospital and their vital signs are now stable; one crew member of the ship involved in the accident suffered minor injuries," the report added. More than 100 emergency workers, including six divers, and about 15 boats and salvage vessels were involved in the rescue, said local media and officials at a press briefing. Authorities were still investigating the cause of the accident, the Guangzhou maritime administration said on their WeChat social media account. It advised ships and vehicles using the route to make detours. CCTV said the accident was caused by inappropriate actions by the crew, citing a press conference by Lixinsha Bridge authorities. Local officials said nearby residents had been evacuated and that the vessel owner was detained by officials, according to the Global Times. Lixinsha Bridge is the main transportation route for residents of Sanmin Island, the report said, adding that an official on the island told reporters that there was still a ferry available for residents to travel. Work to strengthen the bridge, which provides residents a land connection to the cities of Zhongshan and Shenzhen, began in 2022 because of safety concerns, according to CCTV. However, the works have been repeatedly delayed. The city transportation department had marked end-August this year for completion of the works, the report added. Guangzhou, the capital of the prosperous southern Guangdong province near the mouth of the Pearl River, is one of China's busiest maritime transportation and trading hubs. https://www.reuters.com/world/china/two-killed-after-barge-hits-bridge-near-chinas-guangzhou-plunging-vehicles-water-2024-02-22/

2024-02-22 06:09

Village far from fighting hit hard by war Conflict felt far and wide as enters 3rd year Widows struggle, classrooms are empty Volunteers thrive off spirit of defiance LOZUVATKA, Ukraine, Feb 22 (Reuters) - Wives have become widows, parents long for captured sons, classrooms are empty and farmers can't find the hands to work the land. Unlikely friendships have formed; old ones have fallen apart. Even in the village of Lozuvatka, about 100 km (60 miles) from the frontlines, signs are everywhere of a two-year-old war that has irrevocably changed the face of Ukraine. Alona Onyshchuk and her five-year-old daughter Anhelina visited Lozuvatka's graveyard on a snowswept winter's day. Husband and father Serhii Aloshkin lies there alongside 10 other soldiers in a new section called Heroes' Alley. "We did not expect that there would be so many of them," Onyshchuk murmured. Her 38-year-old partner, a driver and mechanic before the war, was killed in late 2022 while fighting near the eastern city of Bakhmut. Similar burial plots have appeared across the country, bearing bitter testament to a grinding war against Russia that's now entering its third year, with no end in sight. Mounds of freshly dug earth are often marked by simple wooden crosses, photos of the dead, brightly coloured flowers and yellow-and-blue Ukrainian flags. The fighting on Ukraine's eastern and southern fronts is far away from this settlement of modest homes surrounded by walled gardens in the centre of the country, but its population of about 6,800 has been profoundly affected. The scale of Ukrainian military casualties is a closely guarded state secret. Western officials estimate tens of thousands have been killed and tens of thousands more wounded. Russia, in the ascendancy on the cusp of the second anniversary of its Feb. 24, 2022 invasion, has also suffered heavy losses. Beyond casualties, the war impacts almost every aspect of Ukrainian life. Onyshchuk quit her job in a grocery store when she got pregnant with Anhelina, and finding new work has been made tougher by the fact that the local kindergarten has closed. Schools in Lozuvatka, located around 350 km southeast of Kyiv, are also shut. Their bomb shelters aren't big enough to accommodate all of the students in the event of an air raid. Although direct Russian missile and drone attacks on the village are rare, it lies close to the key steel-producing town of Kryvyi Rih which has been struck frequently, triggering sirens in surrounding areas. In one of Lozuvatka's three schools, teacher Svitlana Anisimova stands before her computer in an empty classroom as she delivers an online lesson about the solar system to a group of 10 and 11-year-olds. The U.N. children's fund UNICEF said in August that only about a third of school-aged children across Ukraine attended classes fully in person. More than 1,300 schools had been destroyed altogether in government-held areas of the country, it added. STOP THINKING ABOUT WAR Anisimova said remote education couldn't replace attending classes, and not only for academic learning. "Of course I see that this has a big impact on children, on their social abilities," the 35-year-old said, sitting at a children's desk. "They don't get the opportunity to communicate with each other." About 40 of the 136 students in the school have a parent who is currently mobilised and serving in the military, according to school principal Iryna Pototska. In the same building, Pototska helps local women pack up boxes with food and drink, as well as camouflage netting, to be sent to Ukraine's military. Such volunteer networks have sprouted up across the country, a vital source of supplies for soldiers, given how stretched the armed forces are. Yuliia Samotuha, another teacher at the school, coordinates the village's volunteer effort, receiving requests from military units, dividing up the work among households and delivering goods to be packed into boxes. "When you are busy, you sometimes stop thinking about the war," said the 34-year-old, who is on maternity leave. Driving along icy roads to one of her fellow volunteers, she said the village had changed a lot since the beginning of the war. She said she'd parted company with many friends because some were less willing to help the war effort than others. "Many of them proved who they are," she added. "Strangers became like relatives to me." UKRAINE'S PRISONERS OF WAR As well as the dead, there are the missing. Ukrainian officials say about 8,000 people - civilians and soldiers - are in Russian captivity as a result of hostilities. Some 3,000 people, mostly military, have been freed in dozens of prisoner of war exchanges, but thousands of families have been left to ponder the fate of captured relatives. Among them are Lozuvatka residents Tetiana Terletska and Yurii Terletskyi, who said their 29-year-old son Denys joined the National Guard in 2021 and was captured while fighting in the southeastern Ukrainian port city of Mariupol in May 2022. Ukrainian forces there struggled for months to repel Russia's invasion in some of the bloodiest fighting of the war, before Kyiv ordered them to surrender when further defence looked doomed. "We want to show that nobody has forgotten them," Terletska said at a demonstration by dozens of people in Kryvyi Rih demanding that the government do all it can to free captives. "We will always keep fighting for them as they fought for us." The parents described how they were racked by constant pain and anxiety about their son's fate, which they tried to temper with hope that they would one day get him back alive. "This is very difficult," Terletska said in her kitchen in Lozuvatka. "It is 2024 and we still don't have any news. I don't know anything about my son." Terletskyi added: "Sometimes, I dream of him. I want to see him again, I want him to come home." He sighed heavily. FIGHTING TO THE BITTER END At a large local farm, owner Oleksandr Vasylchenko has lost vital staff to the armed forces and fears more will leave soon. He is worried that the machinery he needs to harvest sunflowers, wheat and barley will break down. According to local authorities, more than a third of skilled farm workers in Lozuvatka have been mobilised into the military, underlining the impact of the war on agriculture, a backbone of Ukraine's economy. "Many specialists and mechanics from our community were mobilised. Our equipment needs repairing," Vasylchenko, 42, said in his workshop, adding that it would take time to train new staff. His business is no longer making a profit and he is funding its operations partly from savings. Those challenges present a deep dilemma for Kyiv as it seeks to mobilise another 450-500,000 Ukrainians: If it tries to recruit too many people, it could end up damaging an economy already ravaged by the war. In the village, Anastasiia and Oleksandr Korobchenko are staying in a house their friends helped them find after they fled their home in the Luhansk region to the east as Russian forces advanced at the start of the 2022 invasion. They are among 3.7 million Ukrainians internally displaced by the fighting, according to a study by the World Bank, United Nations, European Commission and Ukrainian government. Another 5.9 million remain displaced outside Ukraine, it found. Although the Korobchenkos have found jobs in Lozuvatka, they are holding off starting a family for now. "When you don't know what will happen to you tomorrow, it's very hard to even think about living with a child," said 23-year-old Anastasiia. "It is really difficult." Sitting behind her desk at the local library where she now works, she said that Ukrainian territory occupied by Russia should be fought for to the bitter end. That sense of defiance is common in Ukraine, even as its forces come under increasing pressure from a larger and better equipped army and Western military support for Kyiv wavers. "My heart aches for the Luhansk and Donetsk regions and for Crimea, because they are in Ukraine," she said. "These are our territories, our people live there. We should not give up." https://www.reuters.com/world/europe/how-life-ukraine-has-been-shattered-by-two-years-war-2024-02-22/

2024-02-22 06:06

NEW YORK, Feb 22 (Reuters) - No single stock has embodied the U.S. market’s artificial intelligence fervor as much as Nvidia Corp (NVDA.O) , opens new tab, leaving Wall Street tied to the fluctuations of its volatile shares. The semiconductor company, whose chips are considered the gold standard in the AI industry, forecast fiscal first-quarter revenue above estimates after the market closed on Wednesday in one of the most highly anticipated earnings releases in recent memory. Given the company’s status as a bellwether of the AI industry and its heavy weighting in U.S. indexes, the way investors react to its earnings report in coming days could offer a glimpse of whether risk appetite continues to thrive in a stock market that has cruised to record highs despite climbing Treasury yields and fading hopes that the Federal Reserve will begin cutting rates in coming months. “The response to the numbers could be seen as a referendum on the market itself,” said Paul Marino, chief revenue officer at GraniteShares, which manages exchange traded funds tied to Nvidia’s performance. “If Nvidia beats expectations and the stock still falls, that will tell us that people are anxious.” Nvidia shares tripled in 2023 and are up nearly 40% this year on growing excitement over the business potential of artificial intelligence. That’s made it a standout performer among the so-called Magnificent Seven group of growth and technology stocks that have been the market’s key drivers over the past year. Nvidia eclipsed the $1 trillion mark for market capitalization in the middle of last year. Earlier this month, it passed Amazon (AMZN.O) , opens new tab and Alphabet (GOOGL.O) , opens new tab to become the third-largest U.S. company by market value, although its recent pullback put the company back in fifth. The company's heftier market value has given it significant sway in key indexes, including the S&P 500. As of Tuesday's close, Nvidia's soaring shares have accounted for more than a quarter of the 4% gain in the index, which hit a record high earlier this month. Nvidia's rise comes as the company has put up big increases in revenue and profit amid an artificial intelligence boom that has fueled demand for its chips. Revenue more than doubled to over $60 billion in its latest fiscal year, while net income soared to nearly $30 billion. Rapid increases in analysts' earnings estimates means its forward earnings valuation has fallen even as its share price has exploded higher. The company traded at 31 times forward earnings ahead of Wednesday's report, compared to 47 times earnings a year ago, LSEG data showed. Nvidia options late Wednesday were pricing a swing of about 10% in either direction in the two trading days following its results, according to data from options analytics service Trade Alert. A 10% move in Nvidia's nearly $1.7 trillion in market value would be roughly equivalent to the current market cap of Qualcomm (QCOM.O) , opens new tab or Comcast (CMCSA.O) , opens new tab. Nvidia's shares soared 14% and 24% in the day following its quarterly reports in February and May last year, but the stock's reaction has been more tepid in recent quarters. Options wagers on where Nvidia shares could go in the next few days ran the gamut, with some traders targeting a drop below $500 by the end of this week while others are betting on a move to $1,300 by Friday, a near double. Nvidia’s shares closed at $674.72 on Wednesday. While Nvidia has been the poster child for AI, it has not been the only stock to benefit from excitement over the technology. Shares of companies such as Super Micro Computer (SMCI.O) , opens new tab and Arm Holdings have jumped in recent weeks, although both stocks have pulled back recently. Even beyond the semiconductor and technology fields, companies across industries have playing up their exposure to AI. Artificial intelligence has been mentioned on 38% of S&P 500 quarterly conference calls in January and February, a slightly higher percentage than during the June quarter, when AI took hold as a prominent industry and market theme. https://www.reuters.com/technology/graphic-nvidias-growing-sway-over-us-stock-market-2024-02-22/

2024-02-22 05:43

Trend inflation is gradually accelerating - BOJ Ueda Reuters poll show analysts projecting BOJ stimulus exit in April Bond yield up as Ueda's comment draws focus on near-term exit Finance minister says focusing on volatility, not yen levels BOJ may end negative rates in March, says ex-c.banker Sakurai TOKYO, Feb 22 (Reuters) - Bank of Japan Governor Kazuo Ueda said the country's inflation was accelerating as a trend as a tight labour market pushes up wages, reiterating the bank's conviction that conditions for ending negative interest rates were falling into place. Speaking in parliament, Ueda said Japan's economy was likely to experience a positive cycle, in which higher job and wage growth leads to moderate rises in inflation. "Service prices continue to rise moderately," he said on Thursday. "Trend inflation is also gradually accelerating. We will guide monetary policy appropriately in line with such moves." He added that Japan was in a "state of inflation," rather than deflation, and is likely to see prices keep rising. The 10-year Japanese government bond yield rose after the remarks, as investors focused on the chance of a near-term end to negative rates. It last stood at 0.725%. Sources have told Reuters the BOJ was on track to end negative rates in coming months despite Japan's economy slipping into a recession, on growing signs that companies will continue to offer bumper pay amid a tightening job market. A Reuters poll showed more than 80% of economists expected the BOJ to pull short-term interest rates out of negative territory in April. Expectations that Japan's borrowing costs will remain very low, however, have pushed down the yen to around 150 against the dollar, a level seen by markets as heightening the chance of yen-buying intervention by Japanese authorities. The dollar stood at 150.26 yen on Thursday. Finance Minister Shunichi Suzuki told the same parliament meeting that authorities were watching currency moves with a high sense of urgency. He said the government had no "defence line" that could trigger action, as it was focusing more on the degree of volatility in exchange-rate markets. Former BOJ board member Makoto Sakurai said the central bank could end negative rates as soon as March, but go slow with raising borrowing costs further. "The BOJ will soon end negative rates but keep monetary conditions accommodative for several years, thereby giving the government time to pursue structural reforms," he told Reuters on Thursday. https://www.reuters.com/markets/asia/boj-chief-ueda-keeps-upbeat-view-inflation-wage-outlook-2024-02-22/