2024-01-03 02:53

MUMBAI, Jan 3 (Reuters) - The Indian rupee is expected to be under pressure on Wednesday following a broad rally on the U.S. dollar on the back of slight moderation in bets on interest rate cuts by the Federal Reserve. Non-deliverable forwards indicate the rupee will open marginally weaker to the U.S. dollar from 83.3175 in the previous session. Asian currencies have begun 2024 "on a very different note" and the rupee "at the margin will feel the impact of that", an FX trader at a bank said. However, "it is now well established that at times of risk offs and dollar rallies", the rupee is a "good currency to hold" in the Asian currency space, the trader added. Asian currencies extended Tuesday's decline, squeezed by the rally on the dollar index on the first trading day of the year. The dollar index and Treasury yields rose and U.S. equities dropped, marking a reversal of the moves witnessed last month. Expectations around Fed rate cuts this year moderated slightly, helping the dollar and lifting U.S. Treasury yields. Odds of the U.S. central bank cutting policy rates at the March meeting dropped and investors now expect slightly less than 150 basis points (bps) of rate cuts this year. There was no specific trigger for the change in rate expectations. A few analysts said it was likely that optimism on rate cuts may have over-extended. There are a slew of U.S. data releases this week which will likely impact the view of investors on rate cuts. U.S. ISM manufacturing number is due on Wednesday, and the ISM services and the monthly job report will be out on Friday. Plus, minutes of the Fed last meeting are due later in the day. KEY INDICATORS: ** One-month non-deliverable rupee forward at 83.40; onshore one-month forward premium at 8.25 paisa ** Dollar index at 102.16 ** Brent crude futures at $75.9 per barrel; dropped 1.5% on Tuesday ** Ten-year U.S. note yield at 3.94%; rose 8 basis points on Tuesday ** As per NSDL data, foreign investors bought a net $30.4mln worth of Indian shares on Jan. 1 ** NSDL data shows foreign investors bought a net $10.4mln worth of Indian bonds on Jan. 1 https://www.reuters.com/markets/currencies/rupee-likely-under-pressure-after-fed-rate-cut-bets-let-up-slightly-2024-01-03/

2024-01-03 02:42

WASHINGTON, Jan 2 (Reuters) - The U.S. federal government's total public debt has reached $34 trillion for the first time, the U.S. Treasury Department reported on Tuesday, as members of Congress gear up for another series of federal funding battles in the coming weeks. The Daily Treasury Statement for Friday showed that the total public debt outstanding rose to $34.001 trillion from $33.911 on Thursday. The debt that counts toward the federal debt ceiling rose to $33.89 trillion on Friday from $33.794 trillion on Thursday. This "debt subject to limit" category excludes the unamortized discount on Treasury bills and zero coupon bonds, debt issued by the Federal Financing Bank and guaranteed debt of certain other agencies. The milestone comes shortly after the federal debt topped $33 trillion in September amid rising federal deficits fueled by falling tax revenues and rising federal expenditures. Congress returns to Washington next week to tackle Jan. 19 and Feb. 2 deadlines for settling government spending through September, amid Republican demands to reduce fiscal 2024 discretionary spending below caps agreed in June. Lawmakers also hope to pass emergency aid for Ukraine and Israel, possibly with unrelated U.S. border security provisions attached. Failure to approve the one-dozen fiscal 2024 spending bills would plunge Washington agencies into shutdown mode. But reaching a compromise could become more difficult with November presidential and congressional elections coming quickly into focus. Maya MacGuineas, president of the Committee for a Responsible Federal Budget, a fiscal watchdog group, called the $34 trillion federal debt figure "a truly depressing achievement," attributing it to political leaders' unwillingness to make difficult fiscal choices. "We remain hopeful that policymakers will take further measures to reduce our borrowing either by raising taxes, reducing spending, or creating a fiscal commission – or ideally by doing all of the above," MacGuineas said in a statement. White House spokesperson Michael Kikukawa said the debt increases were "trickle-down debt" driven by Republican-passed tax cuts in 2017 that benefited corporations and wealthy Americans. "Congressional Republicans want to double down on MAGAnomics with more than $3 trillion in giveaways skewed to the wealthy while forcing hardworking Americans to pay the price by cutting Social Security, Medicare, and Medicaid," Kikukawa said in a statement. He added that Biden plans to reduce U.S. deficits by $2.5 trillion over 10 years by increasing taxes on large corporations and wealthy Americans and cutting spending on pharmaceuticals and tax breaks for oil companies. https://www.reuters.com/world/us/total-us-public-debt-tops-34-trillion-congress-heads-into-funding-fight-2024-01-02/

2024-01-03 00:35

Apple dives on Barclays' downgrade Tesla flat despite record deliveries in Q4 Moderna gains help healthcare index to highest in year Crypto stocks benefit as bitcoin touches $45,000 Indexes: Dow up 0.07%, S&P down 0.57%, Nasdaq down 1.63% Jan 2 (Reuters) - The S&P 500 and Nasdaq Composite closed the first trading session of 2024 lower, weighed by a fall in Apple shares after a broker downgrade and declines among other big-tech names triggered by a move higher by Treasury yields. The lackluster session follows a year where Wall Street's three major indexes notched double-digit gains on the back of optimism around artificial intelligence and stabilizing inflation. The S&P 500 ended last week within 1% of a record closing high reached in early 2022. However, equities were pressured on Tuesday as U.S. Treasury yields climbed, with the yield on 10-year notes ticking above 4.000% to a two-week high before easing slightly to 3.937%. Such movement in Treasury yields reflected investors' tempered expectations around cuts this year in U.S. interest rates. This, in turn, weighed on growth stocks - among them tech stocks - which would benefit from a more favorable rate environment. Apple (AAPL.O) fell 3.6% after Barclays downgraded the tech giant to "underweight", citing weakening iPhone demand. Other megacap stocks also declined, including Nvidia (NVDA.O), Meta Platforms (META.O) and Microsoft (MSFT.O), which slipped between 1.4% and 2.7%. "Everyone was very excited by the tail-end rally, the Fed - on the surface at least - paring back a little, and the fact we didn't have a recession," said Jason Pride, chief of investment strategy & research at Glenmede. "But does that mean we're out the woods yet? I suspect, even if the Fed brings rates down gradually, monetary policy is still tight and still likely to be a hindrance to overall economic activity." The Fed's December policy meeting minutes and a slew of labor market data are on the roster for this week as market participants look to ascertain the timing of potential rate cuts. While the Fed is widely seen holding rates at its January meeting, traders expect a near 70% chance of a 25-basis point cut in March, according to the CME Group's FedWatch tool. The S&P 500 (.SPX) lost 27 points, or 0.57%, to end at 4,742.83 points, while the Nasdaq Composite (.IXIC) lost 245.41 points, or 1.63%, to 14,765.94. The Dow Jones Industrial Average (.DJI) rose 25.5 points, or 0.07%, to 37,715.04. The S&P 500 sectors were mixed. Healthcare (.SPXHC) was the brightest performer, with its 1.8% gain taking it to its highest close since mid-December 2022. Moderna's (MRNA.O) 13.1% advance led the sector higher after the vaccine maker was upgraded by brokerage Oppenheimer, and it reiterated the company's goal of achieving sales growth in 2025. The energy index (.SPNY) also rose 1.2% despite crude slipping on concerns about the economic outlook. Information technology (.SPLRCT) led decliners with a 2.6% fall, the index's largest one-day drop since Aug. 2. Tesla (TSLA.O) was flat despite saying it delivered a record number of electric vehicles in the fourth quarter, beating market estimates and meeting its 2023 target of 1.8 million vehicles. Boeing (BA.N) dropped 3.4% after Goldman Sachs removed the aerospace company from its "conviction list". Meanwhile, Citigroup (C.N) advanced 3.1% to $53.04, its highest finish since August 2022, after Wells Fargo raised its price target for the bank to $70 from $60. Wells analyst Mike Mayo also said Citi was his top pick among large banks in 2024, and he expects the stock to double to $100+ over the next three years. Crypto-related stocks such as MicroStrategy (MSTR.O) gained as bitcoin pierced above $45,000 for the first time since April 2022 on optimism around the possible approval of exchange-traded spot bitcoin funds. The volume on U.S. exchanges was 11.86 billion shares, compared with the 12.4 billion average over the last 20 trading days. https://www.reuters.com/markets/us/wall-st-looks-set-subdued-start-2024-apple-dips-2024-01-02/

2024-01-03 00:27

NEW YORK, Jan 2 (Reuters) - Billionaire investor William Ackman's hedge fund Pershing Square Capital Management returned 26.7% last year, beating the broader stock market gains and bouncing back from a loss in the previous year, according to an investor update on Tuesday. For Ackman's investors, last year's increase returns the hedge fund to form with double digit gains after an interruption in 2022 when fears about interest hikes, runaway inflation and geopolitical flashpoints sent stocks tumbling. Pershing Square Capital Management lost 8.8% in 2022 but gained 26.9% in 2021, surged 70.2% in 2020 and climbed 58.1% in 2019. The firm did not say what fueled last year's rise though long-time portfolio company Chipotle Mexican Grill climbed more than 63% while Google parent Alphabet, a position Ackman added to the portfolio last year, rose 55%. Ackman vowed in 2022 to retire from being a vocal corporate activist pushing change at corporations, but his investment moves, which he often announces on X, continue to be closely followed. While investors fretted about high inflation and a possible recession at the start of 2023, the stock market powered higher late in the year amid hopes for interest rate cuts as soon as this year. https://www.reuters.com/business/finance/ackmans-hedge-fund-pershing-square-gains-267-2023-investor-update-2024-01-03/

2024-01-02 22:18

Jan 2 (Reuters) - A look at the day ahead in Asian markets. Wall Street greeted 2024 with a bout of stock and bond selling suggesting ambivalence is nudging aside year-end optimism about a soft landing and disinflation. Confidence that the Federal Reserve could start it's pivot away from tightening in March incentivised last month's S&P 500 run at record highs, and one of the steepest quarterly drops in benchmark yields in almost three years. While such caution in the U.S. could spill over into Japanese shares when Tokyo trading reopens Wednesday, bulls there have their own list of buying justifications, from a 7% fall in the yen to the confidence shown in Japanese shares by Warren Buffett's Berkshire Hathaway in 2023. They could take a cue from South Korea's benchmark KOSPI (.KS11) which ended the first trading day of the year Tuesday with a 0.55% gain and hit a 19-month high. The Nikkei's 28% yearly gain was the biggest in a decade and it ended the year less than 1.0% shy of the 33-year high set in November. Still, there is little in the way of major Japanese economic data due this week for motivation. The same is true for indicators from other big Asian markets, where perhaps Thailand's December CPI reading due Wednesday is the stand out. The yen weakened in overseas markets on Tuesday after its dalliance with five-month highs last week. Dollar/yen rose 0.8% to 141.97. Against China's yuan the dollar rose 0.36% to 7.1510. The Australian dollar was down 0.72% at US$0.6762. The main driver of the week will likely be Friday's December U.S. payrolls report which will help market participants guess the timing of any Fed rate cuts. The Fed is widely seen holding rates at its January meeting, traders expect a near 70% chance of a 25-basis point cut in March, according to the CME Group's FedWatch tool. The S&P 500 .SPX fell 0.56% on Tuesday and the tech-heavy Nasdaq (.IXIC) swooned 1.63%. The Dow (.DJI) squeaked out a 0.07% gain. U.S. Treasury yields popped higher as traders lowered expectations for rate cuts in 2024. But with Japan closed, the largest foreign owner of Treasuries was out of the market. "Things may have gotten a little ahead of themselves, whether it's equity valuations or expectations of Treasury rate cuts," said David Albrycht, chief investment officer at Newfleet Asset Management. "People have become really complacent that the Fed is going to execute a soft landing but it's still not clear." Here are key developments that could provide more direction to markets on Friday: - Thailand CPI (December) - China Business Surveys, PMI (December) - U.S. FOMC Minutes (December) https://www.reuters.com/markets/asia/global-markets-view-asia-graphic-2024-01-02/

2024-01-02 22:17

LATEST DEVELOPMENTS: Hezbollah leader Nasrallah says assassination of Beirut-based senior Hamas official is 'major, dangerous crime', warns it will fight to the finish if Israel takes full war to Lebanon Nasrallah makes no concrete threat of Hezbollah action against Israel but says any new war will have 'no ceilings' and 'no rules' BEIRUT/CAIRO/GAZA, Jan 3 (Reuters) - The head of Lebanon's Hezbollah said on Wednesday it "cannot be silent" after the killing of Hamas' deputy leader in Beirut and warned that his heavily armed forces would fight to the finish if Israel chose to extend war from Gaza to Lebanon. Israeli forces meanwhile kept up their aerial and ground blitz against Hamas militants in Gaza and told civilians to leave a refugee camp in the north of the Palestinian enclave. Israel, which has laid waste to the Gaza Strip in an onslaught to wipe out its ruling Hamas group, has neither confirmed nor denied that it assassinated Saleh al-Arouri in a drone strike in the Lebanese capital on Tuesday. But its military spokesperson said Israeli forces were in a high state of readiness and prepared for any scenario. Arouri's killing was a further sign that the nearly three-month-old Israel-Hamas war was spreading well beyond Gaza, drawing in the Israeli-occupied West Bank, Hezbollah forces on the Lebanon-Israel border and even Red Sea shipping lanes. Arouri, 57, who lived in Beirut, was the first senior Hamas political leader to be assassinated outside Palestinian territories since Israel began its offensive against the Palestinian Islamist group in response to its deadly rampage from Gaza into Israeli towns on Oct. 7. In a televised speech in Beirut, Hezbollah leader Hassan Nasrallah vowed that his powerful Iran-backed Shi'ite militia "cannot be silent" in the wake of Arouri's killing, which he called "a major dangerous crime", though he made no concrete threats of action against Israel. Nasrallah said there would be "no ceilings" and "no rules" to Hezbollah's fighting if Israel launched full war on Lebanon. "Whoever thinks of war with us, in one word, he will regret it. If war is launched against Lebanon, then Lebanon's national interests require that we take the war to the end." Hezbollah, a Hamas ally, has been embroiled in nearly daily exchanges of shelling with Israel across Lebanon's southern border since the Gaza war began. More than 120 Hezbollah fighters and two dozen civilians have been killed on Lebanese territory, as well as at least nine Israeli soldiers in Israel. Hezbollah and Israel last fought a major war in 2006 and it ended in essentially a stalemate. Analysts say Hezbollah has become a more formidable fighting force since with thousands of rockets, missiles and other heavy weaponry. The U.N. peacekeeping mission in south Lebanon warned that any escalation "could have devastating consequences for people on both sides of the border". Arouri's death removes a big name from Israel’s most-wanted list of top Islamist foes, but could drive Hamas' exiled leaders deeper into hiding, hampering efforts to negotiate further Gaza ceasefires and hostage releases. Hamas politburo member Hossam Badran said in a eulogy for Arouri: "We say to the criminal occupation (Israel) that the battle between us is open." Israel had long accused him of orchestrating attacks on its citizens. But a Hamas official said he was also "at the heart of negotiations" conducted by Qatar and Egypt over the outcome of the Gaza war and the release of Hamas-held Israeli hostages. Nasrallah also said Hamas' lightning incursion on Oct. 7 dealt a severe and deliberate blow to a process of normalisation between Israel and various U.S.-backed Arab governments unfolding since 2020, even after the collapse of talks on a Palestinian state in Israeli-occupied territory. Nasrallah spoke to commemorate four years since the killing of Iranian Revolutionary Guards top commander Qassem Soleimani in a U.S. drone strike in Iraq. Two explosions on Wednesday during a memorial ceremony at a cemetery in southeastern Iran where Soleimani is buried killed over 100 people, at a time of high tension between arch-enemies Iran and Israel. REFUGEE CAMP UNDER FIRE The total recorded Palestinian death toll from Israel's offensive had reached 22,313 by Wednesday - almost 1% of its 2.3 million population, 128 of them in the past 24 hours, the Gaza health ministry said. The war was triggered by a cross-border Hamas assault on Israeli towns on Oct. 7 in which Israel says 1,200 people were killed and some 240 hostages taken back to Gaza. Since then Israeli bombardments have flattened much of the densely populated enclave, wreaking a humanitarian disaster in which most Gazans have been left homeless, crammed into shrinking areas in hope of rudimentary shelter, and threatened by famine due to food shortages. In its daily briefing on Wednesday, the Israeli military said that "intensive battles" with militants continued in the main southern Gaza city of Khan Younis. It has said previously it is trying to flush out Hamas leaders in the area. Residents and Palestinian media said Israeli forces bombed Al-Nusseirat refugee camp in the northern part of the Hamas-run enclave overnight and into Wednesday, destroying several multi-floor buildings. Israeli planes also dropped leaflets on Al-Nusseirat ordering people to leave seven districts. "You are in a dangerous combat area. The IDF is operating heavily in your area of residence. For your safety the IDF urges you to immediately evacuate this area," the leaflets said. Israeli war planes and tanks also stepped up attacks on the Al-Bureij refugee camp in central Gaza. Residents said tanks that advanced from the east and north besieged two schools and soldiers took prisoner several people sheltering inside. They also said snipers commandeering rooftops were firing from time to time against residents moving around. In Rafah near south Gaza's border with Egypt, medics said an Israeli missile strike on a house killed three people. The Gaza health ministry also said an Israeli air strike killed and wounded dozens in north Gaza's Jabalia refugee camp. The Israeli military says it tries to avoid harm to civilians but blames Hamas for embedding fighters within residential areas, something the group denies. Hamas' armed wing said it had killed 10 Israeli soldiers in fighting in Al-Bureij and hit five tanks and troop carriers. The Israeli military said the number of its soldiers killed since its first incursion into Gaza on Oct. 20 had reached 177. https://www.reuters.com/world/middle-east/gaza-war-spreads-beirut-with-killing-hamas-deputy-leader-2024-01-02/