2023-12-19 02:09

Oil stocks gain on supply worries after Red Sea attack US Steel jumps as Nippon to buy co in $14.9 bln deal VF Corp slides on report of data breach Indexes: Dow unchanged, S&P gains 0.45%, Nasdaq adds 0.61% NEW YORK, Dec 18 (Reuters) - U.S. stocks gained ground on Monday as market participants parsed mounting expectations of interest rate cuts from the Federal Reserve in the coming year and looked ahead to a week of crucial economic data. A broad but modest rally boosted the S&P 500 and the Nasdaq to solid gains, while the Dow ended flat. "Markets are heading in the direction of the Fed beginning to cut interest rates next year," said Tom Hainlin, national investment strategist at U.S. Bank Wealth Management in Minneapolis. "The data, whether it’s inflation, consumer spending or the labor market, are not ... deteriorating too fast or running too hot, so that Goldilocks scenario continues to play out." Wall Street continues to build on seven straight weeks of gains, the S&P 500's longest weekly winning streak since 2017. The S&P 500 is now about 1.2% shy of its all-time closing high, amid growing optimism regarding policy rate cuts in 2024, a fervor that Fed policy makers attempted to rein in on Monday. Chicago Fed President Austan Goolsbee warned that the central bank has not pre-committed to cutting rates anytime soon, while Cleveland Fed President Loretta Mester said financial markets had got "a little bit ahead" of the central bank with respect to the timing and extent of interest rate cuts. Even so, financial markets have priced in a 63.4% likelihood that the central bank will lower its Fed funds target rate by 25 basis points at its March monetary policy meeting, according to CME's FedWatch tool. "There’s still a disconnect between investors pricing in five to six cuts next year and the Fed dots that show three," Hainlin added. "Markets continue to run ahead of the Fed and it seems to imply that it’s less important how many cuts, just that there’s going to be cuts." Later in the week, the Commerce Department is expected to release its third and final take on third-quarter GDP on Thursday, to be followed by its broad-ranging Personal Consumption Expenditures (PCE) report on Friday, which will cover income growth, consumer spending, and crucially, inflation. The Dow Jones Industrial Average (.DJI) held steady at 37,306.02, the S&P 500 (.SPX) gained 21.37 points, or 0.45%, to 4,740.56 and the Nasdaq Composite (.IXIC) added 90.89 points, or 0.61%, to 14,904.81. Of the 11 major sectors in the S&P 500, communication services (.SPLRCL) advanced the most, with real estate (.SPLRCR) and utilities (.SPLRCU) ending the session red. Mounting attacks by militant groups on ships in the Red Sea sent crude prices higher over supply concerns, which in turn boosted energy stocks (.SPNY), which have largely been left behind by the recent rally. S&P 500 energy stocks added 0.8%. United States Steel (X.N) jumped 26.1% to a more than 12-year high after Japan's Nippon Steel (5401.T) announced it would buy the steelmaker in a $14.9 billion deal including debt. Apple (AAPL.O) dipped 0.9% as China's ban on the company's iPhones and other foreign-made gadgets gathered momentum. VF Corp (VFC.N) slid 7.8% following its announcement that it was investigating "unauthorized" activity on its computer systems, which disrupted some of its business, including the ability to fulfill orders on its e-commerce site. Advancing issues outnumbered declining ones on the NYSE by a 1.12-to-1 ratio; on Nasdaq, a 1.15-to-1 ratio favored decliners. The S&P 500 posted 31 new 52-week highs and 2 new lows; the Nasdaq Composite recorded 132 new highs and 107 new lows. Volume on U.S. exchanges was 11.75 billion shares, compared with the 11.88 billion average for the full session over the last 20 trading days. https://www.reuters.com/markets/us/futures-edge-higher-treasury-yields-slip-eyes-data-2023-12-18/

2023-12-18 23:49

BOJ keeps ultra-low interest rates unchanged BOJ makes no change to dovish policy guidance Gov Ueda says progress seen towards meeting target Ueda leaves no clear hints on timing of exit TOKYO, Dec 19 (Reuters) - The Bank of Japan maintained ultra-loose policy settings on Tuesday in a widely expected move, as the bank opted to await more evidence on whether wages and prices would rise enough to justify a shift away from massive monetary stimulus. The central bank also made no change to its dovish policy guidance, dashing hopes among some traders it would tweak the language to signal a near-term end to negative interest rates. BOJ Governor Kazuo Ueda said prices and wages appeared to be moving in the right direction with labour unions and big firms signalling the chance of sustained wage gains next year. But he warned conditions remained uncertain. "The chance of trend inflation accelerating towards our price target is gradually heightening," Ueda said in a press conference after the meeting. "But we still need to scrutinise whether a positive wage-inflation cycle will fall in place." At the two-day meeting that ended on Tuesday, the BOJ kept its short-term rate target at -0.1% and that for the 10-year government bond yield around 0%. It also left unchanged a pledge to ramp up stimulus "without hesitation" if needed. The yen tumbled and Japanese stocks gained after the BOJ's decision to hold off on phasing out stimulus. Japan has seen inflation hold above 2% for over a year and some firms have signalled their readiness to keep raising wages, increasing the chance the BOJ will finally abandon its status as a dovish outlier among global central banks. More than 80% of economists polled by Reuters in November expect the BOJ to end its negative rate policy next year with half of them predicting April as the most likely timing. Some see the chance of a policy shift in January. Ueda gave no clear signal on how soon the BOJ could exit negative rates, but said there "won't be much data coming in" between now and the next policy meeting on Jan. 22-23. He also said the BOJ won't rush into raising rates just because the U.S. Federal Reserve could start cutting them soon. "Obviously, I am always thinking about various scenarios about how we could change policy when certain conditions fall into place," Ueda said. "But uncertainty over the outlook is extremely high and we have yet to foresee inflation sustainably and stably achieving our target. As such, it's hard to show now with a high degree of certainty how we can exit." Since taking the helm in April, Ueda has moved towards dismantling the radical stimulus of his predecessor by relaxing the bank's grip on long-term rates in July and October. Markets see the next step to be a hike in short-term rates to around zero from the current -0.1%. Some analysts warn that consumption, which is already softening, could worsen further next year if wages do not rise enough to cushion the blow from rising inflation. But the BOJ maintained its view that consumption continues to increase moderately, underscoring its conviction the economy is on track for a recovery. ALL IN THE TIMING While inflation-adjusted real wages continue to fall, Ueda said that alone won't be an impediment to normalise ultra-easy policy if the BOJ can foresee real wages turning positive. "The prospects for (sustainably achieving our price target) are gradually heightening. But in terms of whether the threshold would be met, we'd prefer to look at more data," he said. Analysts say the BOJ may find it easier to move in months like January and April, when it releases a quarterly outlook report with fresh growth and price projections. But sharp shifts in global monetary policy may complicate the BOJ's decision with U.S. and European central banks signalling that they are done hiking rates. Raising rates at a time other central banks are cutting them could trigger a spike in the yen that hurts big manufacturers' profits and discourages them from hiking wages, analysts say. "While mentioning how Japan is moving closer to achieving the price target, Ueda probably wants to retain a free hand on the timing of an exit," said Yasunari Ueno, chief market economist at Mizuho Securities. Stefan Angrick, senior economist at Moody's Analytics, expects the BOJ to drop negative interest rate policy in April, around when early results for the spring wage negotiations come in. "That said, it's hard to see the BOJ lifting rates much further than 0%," Angrick said. "The weak state of the economy, the appreciating yen, decelerating inflation, and global central banks getting ready to cut rates suggest further hikes are not in the cards." https://www.reuters.com/markets/asia/boj-focus-japans-progress-hitting-price-goal-2023-12-18/

2023-12-18 23:43

OSLO, Dec 18 (Reuters) - A volcano erupted late on Monday in southwest Iceland, spewing lava and smoke across a wide area after weeks of intense earthquake activity, the country's Meteorological Office said, threatening a nearby town. Fearing a significant eruption on the Reykjanes peninsula, authorities last month evacuated the nearly 4,000 inhabitants of the fishing town of Grindavik and closed the nearby Blue Lagoon geothermal spa. "Warning: Eruption has started north of Grindavik by Hagafell," the Met Office said on its website, noting that the eruption began only a few kilometres from the town and cracks in the ground stretched toward the village located about 40 km (25 miles) south-west of Iceland's capital city Reykjavik. Reykjavik's nearby Keflavik International Airport remained open, albeit with numerous delays listed for both arrivals and departures. Images and livestreams of the eruption shown by Reuters and others showed molten rock spewing spectacularly from fissures in the ground, their bright-yellow and orange colours set in sharp contrast against the dark night sky. "Seismic activity together with measurements from GPS devices indicate that the magma is moving to the southwest and the eruption may continue in the direction of Grindavik," the Met Office said. The crack in the earth's surface was around 3.5 km long and had grown rapidly, it added. Some 100 to 200 cubic metres (3,530 to 7,060 cubic feet) of lava emerged per second, several times more than in previous eruptions in the area, the Met Office said. Local police said they had raised their alert level as a result of the outbreak and the country's civil defence warned the public not to approach the area while emergency personnel assessed the situation. Located between the Eurasian and the North American tectonic plates, among the largest on the planet, Iceland is a seismic and volcanic hot spot as the two plates move in opposite directions. But eruptions are still hard to predict. In mid-November, Grindavik inhabitants were whisked from their homes in the middle of the night as the ground shook, roads cracked and buildings suffered structural damage. Seismologists believed at the time an eruption was imminent, but the geological activity later eased. The Reykjanes peninsula in recent years saw several eruptions in unpopulated areas. In March 2021, lava fountains erupted from a fissure in the ground measuring between 500 to 750 metres (1,640 to 2,460 feet) long in the region's Fagradalsfjall volcanic system. Volcanic activity in the area continued for six months that year, prompting thousands of Icelanders and tourists to visit the scene. In August 2022, a three-week eruption happened in the same area, followed by another in July of this year. https://www.reuters.com/world/europe/iceland-volcano-erupts-after-weeks-quake-activity-2023-12-18/

2023-12-18 23:31

SYDNEY, Dec 19 (Reuters) - Residents in Australia's northeast on Tuesday took stock of flood damages from former Tropical Cyclone Jasper and authorities accelerated efforts to rescue people stranded in remote towns as rivers stayed above dangerous levels. Jasper made landfall last week as a category 2 storm, three rungs below the most dangerous wind speed level, in the far north of Queensland state, home to several resorts along the world-famous Great Barrier Reef. It was soon downgraded to a tropical low but the system moved slowly, dumping months worth of rain over four days, cutting off entire towns, and inundating homes, roads and farms. Conditions have since eased with military personnel joining the state's emergency crews on evacuations and relief efforts. Search continued for an 85-year-old man missing in flood waters. Flights from Cairns Airport, the gateway to the Great Barrier Reef, will resume on Tuesday, officials said. "Today, we will really see the beginning of the recovery effort across much of Far North Queensland. So, there'll be a big focus on recovery work," Federal Emergency Management Minister Murray Watt told the Australian Broadcasting Corp. "We're going to see a very large amount of property damage ... so, I think we're up for a pretty expensive repair bill," Watt said. The Insurance Council of Australia said the flooding could be escalated to an insurance catastrophe if there was a spike in claims, though it was too early to determine the full impact. Television footage showed residents walking through homes strewn with debris and sludge after water levels receded in some towns during a pause in rains. Authorities said most of the 300 residents from the flooded remote Indigenous town of Wujal Wujal will be evacuated soon. Some residents there had to wade through crocodile-infested waters to get to higher ground, according to media reports. A 2.8-meter (9-foot) long crocodile was captured on Monday in a storm drain in Ingham, a town of about 5,000. Crocodile sightings in north Queensland are more common in rivers, lagoons and swamps in rural areas. https://www.reuters.com/world/asia-pacific/australians-assess-flood-damages-cyclone-rescue-efforts-ramp-up-2023-12-18/

2023-12-18 23:00

Dec 19 (Reuters) - Australia's top power producer AGL Energy (AGL.AX) said on Tuesday it has reached a final investment decision on a 500 megawatt grid scale battery at the Liddell project in New South Wales. The total construction cost of the battery project is expected to be about A$750 million ($502.95 million). The project will be supported by a A$35 million grant from the Australian Renewable Energy Agency and a long-term energy service agreement arranged by AEMO Services on behalf of the government of New South Wales. Construction work for the battery project is expected to begin in early 2024 with start of operations targeted for mid-2026. AGL shut down the Liddell power station in April after more than half a century of operations as it looked to convert the site into a renewable energy hub. ($1 = 1.4912 Australian dollars) https://www.reuters.com/business/energy/agl-energy-reaches-final-investment-decision-liddell-project-2023-12-18/

2023-12-18 22:55

WASHINGTON, Dec 18 (Reuters) - A U.S. court entered an order against crypto exchange Binance and its former CEO, Changpeng Zhao, approving billions of dollars in fines for money laundering following a case brought by the U.S. Commodity Futures Trading Commission, the agency said on Monday. Zhao will pay $150 million and Binance will pay $2.7 billion to the CFTC as a result, the agency said in a statement. The U.S. District Court for the Northern District of Illinois approved the previously announced settlement and entered a consent order of permanent injunction, civil monetary penalty, and equitable relief against Zhao and Binance, the CFTC said in its statement. The settlement was reached in late November. The court imposed a $150 million civil monetary penalty personally against Zhao, and required Binance to disgorge $1.35 billion of ill-gotten transaction fees and pay a $1.35 billion penalty to the CFTC, according to the agency. In November, Zhao stepped down and pleaded guilty to breaking U.S. anti-money laundering laws as part of a settlement resolving a years-long probe into the world's largest crypto exchange. At the time, Binance said the resolutions acknowledged the company's responsibility "for historical, criminal compliance violations, and allow our company to turn the page." Binance broke U.S. anti-money laundering and sanctions laws and failed to report more than 100,000 suspicious transactions with organizations the U.S. described as terrorist groups, authorities have said. The exchange also failed to report transactions with websites devoted to selling child sexual abuse material and was one of the largest recipients of ransomware proceeds, they added. https://www.reuters.com/legal/us-court-enters-order-against-binance-which-will-pay-27-billion-cftc-2023-12-18/