2023-12-13 01:14

NEW YORK, Dec 12 (Reuters) - Three hedge fund associations sued the U.S. Securities and Exchange Commission (SEC) on Tuesday in a bid to vacate two new rules aimed at boosting transparency of short-selling, or trades that earn investors a profit if a stock price falls. In October, the SEC issued the rules aimed at boosting transparency of short selling and securities lending, two connected activities. The groups say the SEC took conflicting stances with the rules, in one case allowing for transaction reports to be aggregated in order to protect investors' positions, yet at the same time requiring other transaction reports to disclosed individually. The case, filed in the 5th U.S. Circuit Court of Appeals, is the second brought by the hedge fund groups against the SEC in recent months. Wall Street has been fighting a raft of new financial regulations in court. In their suit, the groups argue the SEC did not take into account the interconnected nature of the two rules and adopted contradictory approaches, adding as such the rules will harm investors. They also added the rules violate the Administrative Procedure Act, which requires agencies to justify their rules and consider feedback. "Despite our best efforts, the SEC decided to ignore the interconnected nature of these two rulemakings and failed to apply a consistent approach or principle to regulating these related markets," said Bryan Corbett, President and CEO of the Managed Funds Association, one of the trade groups, said in a press release. The SEC told Reuters in an email that it will "vigorously defend challenged rules in court." Short selling involves borrowing a stock to sell it in the expectation the price will fall. The investor then buys the stock back at the lower price, pocketing the difference. The SEC's October short-selling rule requires hedge funds to report short positions to the regulator, which publishes them with a delay on an aggregate basis in which individual traders remain anonymous. The second rule requires financial firms to make daily reports on individual securities loans, which facilitate their short positions. That data will also be disclosed on a delayed basis. Fund managers oppose increased transparency around their trades, even though the parts involved are not identified. The rules could end up "revealing confidential investment strategies and potentially facilitating retaliation or other manipulative activities," the groups argued in the filing. The other petitioners are the Alternative Investment Management Association and the National Association of Private Fund Managers. Long a contentious practice, short selling generated controversy again during the GameStop (GME.N) saga in 2021, when retail investors drove up the price of shares in the videogame retailer, causing heavy losses for hedge funds that had shorted the company. When adopting the rules, SEC chair Gary Gensler said it was "important for the SEC and the public to know more about short sale activity in the equity markets, especially in times of stress or volatility." In September, the same three groups, along with other associations, sued the SEC over new private funds rules. Get the latest legal news of the day delivered straight to your inbox with The Afternoon Docket. https://www.reuters.com/markets/us/hedge-fund-groups-sue-us-sec-bid-vacate-short-selling-rules-2023-12-12/

2023-12-12 23:48

SYDNEY, Dec 13 (Reuters) - Australia's government expects a much improved budget bottom line this year as revenues outpace forecasts, but is resisting calls for more cost-of-living handouts to avoid inflaming inflationary pressures. In his mid-year economic and fiscal outlook (MYEFO), Labor Treasurer Jim Chalmers projected a budget deficit of just A$1.1 billion ($721.4 million) in the year to end June 2024, down from A$13.9 billion forecasted back in May. The Labor government recorded the first budget surplus in 15 years in 2022/23 as profits boomed in the country's huge mining sector and employment proved much stronger than expected. Analysts suspect there could end up being another surplus this year given the government is assuming prices for iron ore, Australia's biggest export earner, will fall to $60 a tonne. That is considered unlikely given the steel making material is currently above $130 a tonne. "By restraining spending and returning most of the tax upgrades to the budget, the Government continues to ensure fiscal and monetary policy settings are aligned, and helps ease inflationary pressures," the MYEFO showed. The Reserve Bank of Australia (RBA) has had to lift interest rates to a 12-year high of 4.35% to try and curb inflation which ran at 5.4% in the third quarter, far above the central bank's target band of 2-3%. Chalmers in May announced A$23 billion in targeted cost-of-living relief, but has since resisted pressure for more spending citing the need to control inflation. The government sees consumer price inflation slowing to 3.75% by the middle of next year, and to 2.75% by mid-2025 which would put it back in the RBA's target band. This is more optimistic than the central bank, which expects inflation to slow to 3.3% by mid-2025 and only re-enter the band at the very end of the year. The MYEFO projects economic growth to slow to 1.75% this fiscal year, before picking up to 2.25% the year after. Unemployment, which hit five-decade lows last year at 3.4%, is seen rising to 4.25% this year and peaking at 4.5%. "We know people are struggling and our economy is slowing, which is why we are rolling out assistance while getting the Budget in much better shape," Chalmers said in a statement. "We are making welcome and encouraging progress in the fight against inflation." The government has been suffering in opinion polls as a dearth of affordable housing and record-breaking migration has soured the mood of voters. Net migration hit an all-time peak of 510,000 in 2022/23 and is projected to slow to 375,000 this year, though that is still 60,000 more than forecast back in May. Earlier this week, the government announced it would tighten visa rules for international students and low-skilled workers that could halve its migrant intake over the next two years. ($1 = 1.5249 Australian dollars) https://www.reuters.com/world/asia-pacific/australia-govt-sees-budget-almost-balance-202324-2023-12-12/

2023-12-12 23:42

Dec 13 (Reuters) - The Japanese government is planning to offer tax incentives for a decade to boost mass production in five areas including electric vehicle (EV) production and semiconductor devices manufacturing, Nikkei Asia reported on Wednesday. Japan's ruling Liberal Democratic Party will include the tax breaks in the fiscal 2024 tax reform framework, which are expected to be finalized as early as this week, the financial newspaper reported. Other sectors which may receive the 10-year tax benefits include sustainable aviation fuels, green steel and green chemicals, with the EV category also including battery storage. The tax breaks will include 400,000 yen ($2,750.28) for each EV, 30 yen per liter of sustainable aviation fuel, and 20,000 yen for each tonne of green steel, the Nikkei reported. For semiconductors, businesses will receive up to a 20% break on the corporate income tax each fiscal year, while for other categories tax break will be capped at 40%. ($1 = 145.4400 yen) https://www.reuters.com/sustainability/sustainable-finance-reporting/japan-plans-tax-breaks-10-years-boost-ev-chip-production-nikkei-2023-12-12/

2023-12-12 23:35

Alphabet slips after Epic Games wins antitrust lawsuit Oracle tumbles on downbeat Q3 revenue forecast U.S. November CPI in line with estimates Indexes up: Dow 0.48%, S&P 500 0.46%, Nasdaq 0.70% NEW YORK, Dec 12 (Reuters) - U.S. stocks closed at fresh highs of the year on Tuesday, after inflation data did little to alter views for the timing of a rate cut by the Federal Reserve, as investors awaited the central bank's last policy decision of the year on Wednesday. The November Consumer Price Index (CPI) rose 3.1% on an annual basis, in line with estimates from economists polled by Reuters, as a drop in gasoline prices was overshadowed by a rise in rents. Core prices, excluding volatile items such as food and energy costs, also matched expectations, showing a 4% annual rise. On a month-on-month basis, consumer prices ticked up 0.1% last month, compared with estimates of remaining unchanged. Markets had recently been pricing in a rate cut by the Federal Reserve as soon as March, but traders pared those bets and are now targeting May for the first rate cut after the central bank began its hiking cycle in March 2022. Expectations for a cut of at least 25 basis points in March fell to 43.7%, from about 50% before the data, according to the CME Group's FedWatch Tool. The market is now pricing in a chance of about 78% for a cut in May, up from about 75% on Monday. "The market is certainly assuming that inflation is going to keep coming down, that earnings in this next year are going to show some decent growth and the Fed is going to cut rates," said Scott Wren, senior global market strategist at the Wells Fargo Investment Institute in St. Louis. "The market is counting on more of a soft landing that would allow the Fed to ease up." The Dow Jones Industrial Average (.DJI) rose 173.01 points, or 0.48%, to 36,577.94, the S&P 500 (.SPX) gained 21.26 points, or 0.46%, to 4,643.70 and the Nasdaq Composite (.IXIC) gained 100.91 points, or 0.70%, to 14,533.40. The Dow closed at its highest level since Jan. 4, 2022, the S&P 500 its highest close since Jan. 14, 2022, and the Nasdaq its highest closing level since March 29, 2022. Wren also said stocks were facing resistance at their highs of the year, with a strong push to the upside unlikely for the near-to-intermediate term. Another factor dampening volatility could be an options expiration at the end of the week, with the S&P 500 not registering a move of 1% in either direction for 19 straight sessions, the longest such streak since August. Markets will get another look at inflation data in the form of the Producer Price Index (PPI) before all eyes turn to the Fed's policy announcement at the conclusion of its two-day meeting on Wednesday. The European Central Bank and the Bank of England are also scheduled to deliver their policy verdicts later this week. Oracle (ORCL.N) slumped 12.44% as the cloud services provider forecast third-quarter revenue below estimates on slowing demand for its cloud service. Energy (.SPNY) was the worst-performing of the 11 major S&P sectors, falling 1.35% as crude prices settled down nearly 4%. The tech sector (.SPLRCT), however, was among the best-performing, rising for a fourth straight session to close at a record high of 3,344.07, on track for its biggest yearly percentage gain since 2019. Google-parent Alphabet (GOOGL.O) dipped 0.58% after "Fortnite" maker Epic Games prevailed in its high-profile antitrust trial over the company. Advancing issues were roughly even with decliners on the NYSE while declining issues outnumbered advancers by a 1.3-to-1 ratio on the Nasdaq. The S&P 500 posted 74 new 52-week highs and 2 new lows while the Nasdaq recorded 198 new highs and 187 new lows. Volume on U.S. exchanges was 10.52 billion shares, compared with the 10.95 billion average for the full session over the last 20 trading days. https://www.reuters.com/markets/us/futures-edge-higher-with-all-eyes-inflation-data-2023-12-12/

2023-12-12 23:27

Dec 12 (Reuters) - Shell PLC (SHEL.L) on Tuesday said it has made a final investment decision (FID) to boost production at the Perdido oil project in the U.S. Gulf of Mexico, starting in April 2025. The company, which operates the platform, said it will add three wells that are expected to produce up to 22,000 barrels of oil equivalent per day (boepd) at peak rates. Perdido has a production capacity of 125,000 boepd at peak rates. The wells will be drilled in the Great White unit, where Shell is operator with a 33.34% stake, with Chevron Corp (CVX.N) and BP PLC holding 33.33% each. https://www.reuters.com/business/energy/shell-boost-production-perdidos-oil-project-us-gulf-mexico-2023-12-12/

2023-12-12 22:23

Dec 12 (Reuters) - Egg producer Cal-Maine Foods (CALM.O) said on Tuesday it had temporarily ceased production at a facility in Kansas after some of the flock tested positive for avian flu. The company said highly pathogenic avian influenza (HPAI) had affected about 684,000 laying hens, or nearly 1.6% of its total flock. Cal-Maine said these detections do not present an immediate public health concern and are not a threat to the food supply, according to the U.S. Department of Agriculture (USDA). It also said that no known HPAI risk associated with eggs were currently in the market and no eggs have been recalled, adding that there were no positive tests for HPAI at any other company locations to date. Shares of the company were down marginally at $48.80 in extended trading following the news. More than 72.5 million chickens, turkeys and other birds have been wiped out since the U.S. avian flu outbreak began in February 2022, according to the USDA. U.S. cases in commercial poultry flocks have increased since October 2023, with experts blaming wild birds for spreading the disease. Kansas had not reported an outbreak in a commercial flock since February 2023, U.S. data shows. Other large egg-laying operations have also been hit. Ohio confirmed last week that a commercial layer farm with 2.6 million birds was infected and said the birds were being culled. https://www.reuters.com/markets/us/cal-maine-foods-temporarily-ceases-production-kansas-facility-2023-12-12/