2024-02-20 10:58
Walmart hits all-time high on strong FY sales view Discover Financial jumps on Capital One's $35.3 bln buyout deal Focus on Nvidia results due Wednesday Indexes down: S&P 0.6%, Dow 0.17%, Nasdaq 0.92% NEW YORK, Feb 20 (Reuters) - U.S. stocks ended lower on Tuesday, with the Nasdaq showing the largest declines as chipmaker Nvidia stumbled ahead of its highly awaited earnings report, while gains in Walmart kept losses on the Dow Industrials in check. Shares of the chip designer Nvidia (NVDA.O) , opens new tab tumbled 4.35%, it's biggest daily percentage fall since Oct. 17, while the broader Philadelphia semiconductor index (.SOX) , opens new tab declined 1.56% as other chip stocks followed. Investors are concerned whether Nvidia's quarterly results, expected after markets close on Wednesday, will justify its expensive valuation, currently at a forward price-to-earnings ratio of just over 32, and continue to fuel the buying frenzy around artificial intelligence (AI) related stocks. AI-fueled bets have helped Nvidia become the third-most valuable U.S. company and recently supplant Tesla (TSLA.O) , opens new tab as Wall Street's most traded stock. "It is priced to perfection, no matter what they say they are probably going to take money out of it," said Ken Polcari, managing partner at Kace Capital Advisors in Boca Raton, Florida. "No matter what they say, the traders are going to lock in profits, the asset managers are going to peel off a piece of their core position and lock in some profits and some of that is even happening today ahead of the number tomorrow." Shares in Super Micro Computer (SMCI.O) , opens new tab, which has surged in recent weeks as the latest stock seen to benefit from AI, fell 1.96%, its second straight decline, after closing down nearly 20% on Friday to snap a nine-session streak of gains. The S&P 500 (.SPX) , opens new tab lost 30.06 points, or 0.60%, to end at 4,975.51 points, while the Nasdaq Composite (.IXIC) , opens new tab lost 144.87 points, or 0.92%, to 15,630.78. The Dow Jones Industrial Average (.DJI) , opens new tab fell 64.19 points, or 0.17%, to 38,56.80. Walmart (WMT.N) , opens new tab closed at a record high and was the best performer on the Dow Industrials after the U.S. retail giant forecast fiscal 2025 sales largely above Wall Street expectations and raised its annual dividend by 9%. The S&P 500 consumer staples index (.SPLRCS) , opens new tab, which includes Walmart, rose 1.13% as sole advancer of the 11 major S&P sectors, while information technology (.SPLRCT) , opens new tab, down 1.27% was the weakest. Shares of fellow Dow component Home Depot alternated between modest gains and losses and before closing up 0.06% after the home improvement retailer forecast full-year results below analysts' estimates. A weeks-long rally on Wall Street stalled last week, as hotter-than-expected U.S. inflation data pushed back market expectations for the timing of a rate cut from the Federal Reserve. The rate cut is expected in June, according to a slim majority of economists polled by Reuters, who also flagged risk of a further delay in the first cut. Investors are also awaiting the release of minutes from the Fed's latest policy meeting as well as remarks from a slew of central bank officials later this week. Smart-TV maker Vizio (VZIO.N) , opens new tab jumped 16.26% after Walmart said it would buy the company for $2.3 billion. Discover Financial Services (DFS.N) , opens new tab shot 12.61% higher on Warren Buffett-backed consumer bank Capital One's plans to acquire the U.S. credit card issuer in a $35.3 billion deal. Capital One shares edged 0.12% higher. Declining issues outnumbered advancers by a 1.4 to 1 ratio on the NYSE, while on Nasdaq, decliners topped advancers by 1.9 to 1. The S&P 500 posted 29 new 52-week highs and 3 new lows while the Nasdaq recorded 111 new highs and 95 new lows. On U.S. exchanges 11.67 billion shares changed hands compared with the 11.64 billion moving average for the last 20 sessions. https://www.reuters.com/markets/us/futures-slip-fading-rate-cut-hopes-retailers-earnings-focus-2024-02-20/
2024-02-20 10:53
MUMBAI, Feb 20 (Reuters) - The Reserve Bank of India (RBI) net bought $2.07 billion in the spot foreign exchange market in December, data released on Tuesday as part of the central bank's monthly bulletin showed. The RBI said it purchased $31.73 billion and sold $29.66 billion in the spot market. In November, it had sold a net $1.93 billion. The Indian rupee appreciated by 0.2% against the U.S. dollar in December, and had traded in a range of 82.9050 to 83.4050. The RBI's net outstanding forward purchase stood at $2.18 billion as of end-December, compared with a net sale of $11.9 billion at the end of the previous month, the data showed. The central bank intervenes in the spot and forwards market to curb exchange rate volatility. The currency was at 82.9625 to the dollar on Tuesday. https://www.reuters.com/business/finance/india-cenbank-net-bought-207-bln-spot-forex-market-december-bulletin-2024-02-20/
2024-02-20 10:49
COPENHAGEN, Feb 20 (Reuters) - Dairy producer Arla said on Tuesday that sales could slip this year after a flat 2023 as European consumers continue to cut back spending, although it sees some signs of improving demand. Arla, one of the world's biggest dairy producers, said dairy prices had recovered in the second half of 2023 as consumers had slowly returned to premium products such as Lurpak butter and Castello cheese. That trend was accelerating at the beginning of this year, it said. "We are getting back to more normal balanced levels between branded and discounted products," CEO Peder Tuborgh told journalists. Still, a combination of overall lower prices and currency headwinds were expected to dent sales this year, the company said. Arla said its expects sales this year in the range of 13.2-13.7 billion euro ($14.3-$14.8 billion), compared to flat sales of 13.7 billion last year. Sales of Lurpak butter, which is sold in 100 countries around the world, and Castello cheese both rose by 3% in 2023, despite lower volumes sold. Arla, which competes with companies like Danone (DANO.PA) , opens new tab and Nestle (NESN.S) , opens new tab in the dairy industry, is owned by more than 8,000 dairy farmers in Denmark, Sweden, Britain, Germany, Belgium, Luxemburg and the Netherlands. ($1 = 0.9264 euros) https://www.reuters.com/business/retail-consumer/dairy-firm-arla-posts-flat-2023-sales-consumers-opt-discounted-products-2024-02-20/
2024-02-20 10:48
Gecamines wants board seats on mines to ensure accountability Congo's Tshisekedi eyes bigger mining windfall after re-election JOHANNESBURG/LONDON, Feb 20 (Reuters) - The Democratic Republic of Congo's state miner is broadening a push to extract more from its copper and cobalt joint ventures, seeking to negotiate for higher stakes across the board to gain leverage in management of some of its biggest mines. Gecamines is also leveraging existing shareholding in mines to negotiate off-take contracts for the purpose of trading copper and cobalt on its own. The miner wants more local executives on boards governing joint ventures to have a greater say in how assets are managed, Guy Robert Lukama, the Gecamines chairman, told Reuters. The plans may mean overhauling some terms of agreements that Gecamines deems unfavourable to capitalise on the world's scramble for supplies of minerals critical to global green energy transition. "We want to repair a certain stage of mistakes that were made when they asked us to give most of our best assets to third parties just to attract foreign direct investment," said the chairman of the state miner, which at its peak in 1986 produced more than 490,000 tons of copper and cobalt - but is now a shadow of its former self. Chinese mining companies have been key to driving output in the world's biggest supplier of cobalt, a key component in batteries for electric vehicles and mobile phones. Congo is also the world's third-largest copper producer. President Felix Tshisekedi's government had previously said some deals were heavily skewed in favour of China, forcing some state-backed firms to find an additional $1 billion in a renegotiated infrastructure for minerals pact. PROLONGED DEBTS Board representation on the mines could ensure accountability, transparency, community development and compliance with rules on local procurement and training of Congolese staff, Lukama said. He added that some mines aren't investing in expanding output, citing prolonged levels of indebtedness. A lack of oversight could be behind the huge debts, which he said is depriving the state miner of returns. Lukama questioned why some of its partners are reporting losses and scaling down production because of a slump in cobalt's value while copper prices have remained elevated. In Congo, cobalt output is a by-product of copper. "We can no longer accept this level of debt while people don't put capital into the assets," he said. "We are not sleeping partners in our own country. We should be part of the governance." CMOC DEAL Last year's deal with China's CMOC Group (603993.SS) , opens new tab secured Gecamines a right to acquire copper and cobalt produced from Tenke Fungurume Mining equal to its 20% stake, on market terms. Gecamines also scored an $800 million settlement to end a dispute over mineral royalties and $1.2 billion in dividends over the life of the Tenke mine. The deals has prompted Gecamines' push to trade copper and cobalt at projects with partners including Glencore (GLEN.L) , opens new tab and Zijin Mining (601899.SS) , opens new tab. Gecamines' partners had retained full off-take rights because they used debt to build the projects, Lukama said. "The off-take was there to secure the flows of repayment of debt, now the debt is repaid, why should they keep it 100%." Lukama said some terms need to be reviewed as investors aren't meeting expectations, with communities not better off despite the mining boom. He declined to say which companies are not meeting expectations. Changes to the mining code in 2018 bolstered Gecamines' powers to seek reviews of terms in mining contracts and boosted the minimum state participation threshold, said Andrew Smith, a senior Africa analyst at risk intelligence company Verisk Maplecroft. "DR Congo does have a history of pressurising mining companies into ceding shares," Smith said. "Measures such as asserting that firms have not paid adequate royalties or taxes by underreporting revenues and production have been used in the past." https://www.reuters.com/markets/commodities/gecamines-plans-overhaul-mining-jvs-worlds-top-cobalt-supplier-2024-02-20/
2024-02-20 10:48
Feb 20 (Reuters) - UBS Global Research on Tuesday raised its year-end forecast for the benchmark S&P 500 index to 5,400, marking the highest projection among major global brokerages. The latest forecast indicates an upside of about 8% to the index's last close of 5,005.57. The brokerage had raised its forecast previously to 5,150 in January on growing bets of the U.S. Federal Reserve cutting interest rates this year, a decline in inflation and resilient earnings expectations. But earlier this month hot consumer prices and producer prices reports renewed fears of a pick-up in inflation after months of cooling that could potentially further delay interest-rate cuts. "Higher (U.S.)inflation tends to be a positive for stock prices. Stronger inflationary pressures represent increased pricing power, a benefit to margins," UBS said, adding that economic data been strong since the start of the year. The brokerage raised its earnings-per-share estimate for the benchmark index to $240 from $235 for 2024, implying a 9.1% growth compared to consensus estimate of 10.5%. The benchmark index has seen on strong rally to breach the 5,000 mark, boosted primarily by the Magnificent 7 stocks and optimism around artificial intelligence. Traders are betting on a 53.1% chance for the Fed to cut rates by 25 basis points in June, according to the CME FedWatch tool. UBS also revised its ratings for a couple of sub-sectors of the S&P 500 index. It upgraded the financials sector (.SPSY) , opens new tab to "overweight" from "neutral", supported by the resurgence in deals and easing lending standards. UBS also downgraded the health care sector (.SPXHC) , opens new tab to "neutral" from "overweight." https://www.reuters.com/markets/us/ubs-lifts-sp-500-year-end-target-5400-highest-among-top-global-brokerages-2024-02-20/
2024-02-20 10:36
Barclays plans cost cuts, bumper buybacks Air Liquide tops profit forecast, shares rise Bayer slashes dividend to tackle debt burden Q4 wage deals data due at 1000 GMT Feb 20 (Reuters) - European shares slipped on Tuesday as metal and mining stocks fell after a cut in China's mortgage rate failed to impress markets, while investors assessed key eurozone wage data. The pan-European STOXX 600 (.STOXX) , opens new tab dipped 0.2%, led by a 1.5% loss in the basic resources index (.SXPP) , opens new tab as copper prices dropped and a deeper-than-expected mortgage rate cut out of China piled onto uncertainty about the top-consumer's ailing property sector. China-exposed luxury stocks (.STXLUXP) , opens new tab also dipped 0.1%. The technology sector (.SX8P) , opens new tab, which has been one of the top gainers this year, also declined more than 1% by 0941 GMT. "This sharper-than-expected cut hasn't shored up confidence. Instead, it's concentrated concerns about the economy," said Susannah Streeter, head of money and markets, Hargreaves Lansdown. "It's a concern because ... a large chunk of European-listed companies are highly attuned to what happens in China." Closer to home, the much-awaited data on eurozone fourth-quarter 2023 negotiated wages showed an reading of 4.46%, down from a record high of 4.69% in the third quarter. The data is seen as an important variable in determining the timing of the ECB's (European Central Bank) interest rate cuts. The main STOXX index closed at a two-year high in the previous session and is nearing an all-time high, supported by upbeat earnings from industry heavyweights and expectations of more than four rate cuts this year. Air Liquide (AIRP.PA) , opens new tab shares jumped 5.9% to a record high, driving a 1.6% gain in the broader chemicals (.SX4P) , opens new tab sector, after the French industrial gases firm posted a better-than-expected FY operating profit and said it had already reached its 2025 margin targets. Barclays (BARC.L) , opens new tab shares added 4.2% after the UK lender set out a welter of plans including buybacks, an overhaul of its operations, cost cuts and asset sales to improve performance and lift shares. OC Oerlikon (OERL.S) , opens new tab rose 5.6% after the Swiss industrial firm said it is exploring options to separate its fibre-making polymer business to focus on metal coatings. Drugmaker Sandoz Group (SDZ.S) , opens new tab lost 3.0% after Morgan Stanley downgraded the stock to "equal weight" from "overweight". Bayer AG's shares (BAYGn.DE) , opens new tab inched up 0.2% in volatile trading after the German drugmaker said it would slash its dividend over the next three years to reduce its debt. https://www.reuters.com/markets/europe/european-shares-open-lower-ahead-quarterly-wages-data-2024-02-20/
