2023-12-04 15:49
JOHANNESBURG, Dec 4 (Reuters) - The South African rand was weaker in early trade on Monday against a stronger dollar ahead of a data-filled week both locally and abroad. At 0705 GMT, the rand traded at 18.6800 against the dollar , about 0.3% weaker than its previous close. The dollar last traded around 0.2% stronger against a basket of global currencies. Local data releases include third-quarter gross domestic product, October and November business confidence index data and whole economy PMI. Markets await employment data out of the U.S. on Friday for further hints on the interest rate path of the economic powerhouse after Federal Reserve Chair Jerome Powell last week said the Fed would move "carefully" on interest rates. Like other risk-sensitive currencies, the rand often takes it cues from global drivers such as U.S. monetary policy. On the Johannesburg Stock Exchange, the blue-chip Top-40 index (.JTOPI) was up about 0.3% in early trade. South Africa's benchmark 2030 government bond was slightly stronger in early deals, with the yield down 3 basis points at 9.950%. https://www.reuters.com/markets/currencies/south-african-rand-weaker-ahead-busy-local-us-data-week-2023-12-04/
2023-12-04 15:49
JOHANNESBURG, Dec 4 (Reuters) - South Africa's rand fell on Monday as the dollar rose strongly on global markets at the start of a busy week for local economic data with gross domestic product (GDP) and current account figures due. At 1530 GMT, the rand traded at 18.8075 against the dollar , about 1% weaker than its previous close. The dollar last traded around 0.6% stronger against a basket of global currencies. "The rand has very much been a passenger to broader dollar moves today," said Danny Greeff at ETM Analytics. Statistics South Africa will publish third-quarter GDP numbers (ZAGDPY=ECI), (ZAGDPN=ECI) on Tuesday, with analysts polled by Reuters predicting a small contraction in both year-on-year and quarter-on-quarter terms. The central bank will publish Q3 current account data on Thursday (ZACAGP=ECI), with a deficit of 1.9% of GDP forecast compared to 2.3% in the previous quarter. Other releases this week include a whole-economy PMI survey on Tuesday (ZAPMIM=ECI). On the Johannesburg Stock Exchange, the blue-chip Top-40 index (.JTOPI) closed up about 0.2%. The yield on the benchmark 2030 government bond was down 2 basis points at 9.96%. https://www.reuters.com/markets/currencies/south-african-rand-falls-gdp-current-account-due-this-week-2023-12-04/
2023-12-04 15:31
NEW YORK, Dec 4 (Reuters) - U.S. home buyers are becoming more willing to purchase properties even as interest rates stay high, according to a study by Bank of America (BAC.N) published on Monday. About 62% of respondents said they would wait for borrowing costs to fall before buying a house, according to 1,000 people polled in September. That is down from 85% six months earlier. "We are beginning to see that lack of patience play out in the survey, which ultimately should lead to activity going forward," Matt Vernon, head of consumer lending at Bank of America, told Reuters. In a bid to tame inflation, the Federal Reserve has raised its policy rate a total of 5.25 percentage points in the last 20 months. The U.S. economy is showing signs of cooling, raising expectations that the rate hikes are likely done. Nearly 80% of U.S. mortgages have an interest rate below 5%. That compares with average 30-year fixed mortgage rates that surged to 8% in October, the highest in more than two decades, which deterred buyers. “There’s a clear desire for homeownership, but for some, it has become more challenging to achieve due to current market realities,” added Vernon. Homeowners were willing to sell their existing homes and take on higher-interest mortgages if they found a property in a more affordable area or their dream home became available, the survey showed. They also sold their homes for career or family reasons or to seek a lower cost of living. New-home sales dropped 5.6% to a seasonally adjusted annual rate of 679,000 units last month as mortgage rates squeezed out buyers. Still, Americans' pent-up demand for homes is expected to increase sales. "We will be ready and we will be able to utilize our internal resources to meet the improved demand when it happens," Vernon said. The second-largest U.S. lender beat Wall Street estimates in its third quarter earnings and its consumer banking revenue increased 6% year-on-year to $10.5 billion. https://www.reuters.com/markets/us/more-us-home-buyers-willing-purchase-despite-high-rates-bofa-study-2023-12-04/
2023-12-04 15:24
Dec 4 (Reuters) - Economic uncertainties due to a rapid rise in interest rates forced U.S. companies like tech behemoth Amazon.com (AMZN.O) and Wall Street banks including Goldman Sachs (GS.N) to slash thousands of jobs in a quest to rein in costs. Many companies such as Meta Platforms (META.O) even resorted to more than one round of layoffs as the economic outlook showed no signs of material improvement through 2023, forcing them to further tighten spending. Here are some of the job cuts by major American companies announced in recent months. TECHNOLOGY, MEDIA AND TELECOM SECTOR Meta Platforms (META.O): The Facebook-parent said it would cut 10,000 jobs, just four months after it let go 11,000 employees. IBM Corp (IBM.N): The software and consulting firm said it will lay off 3,900 employees. read more Spotify Technology SA (SPOT.N): Music streaming service Spotify is laying off around 1,500 employees, or 17% of its headcount, after letting go of 600 staffers in January and 200 more in June. Alphabet (GOOGL.O): Alphabet is eliminating 12,000 jobs, its chief executive said in a staff memo. read more Microsoft Corp (MSFT.O): The U.S. tech giant said it would cut 10,000 jobs by the end of the third quarter of fiscal 2023. The company laid off under 1,000 employees across several divisions in October, Axios reported, citing a source. Amazon.com (AMZN.O): The e-commerce giant will cut another 9,000 jobs in its cloud services, advertising and Twitch units after announcing company-wide layoffs earlier this year that would impact over 18,000 employees. Intel Corp (INTC.O): CEO Pat Gelsinger told Reuters "people actions" would be part of a cost-reduction plan. The chipmaker said it would reduce costs by $3 billion in 2023. read more X, formerly known as Twitter: The social media company has laid off at least 200 employees, or about 10% of its workforce, the New York Times reported. The layoffs come after X terminated about 3,700 people, representing about half of the total staff, in November 2022, soon after Elon Musk took over the firm. Lyft (LYFT.O): The ride-hailing firm said it would lay off 13% of its workforce, or about 683 employees, after it already cut 60 jobs early in 2022 and froze hiring by September last year. In April this year, it said it would lay off about 1,072 employees. Salesforce (CRM.N): The software company said it would lay off about 10% of its employees and close some offices as a part of its restructuring plan, citing a challenging economy. Cisco Systems (CSCO.O): The networking and collaboration solutions company said it will undertake restructuring which could impact roughly 5% of its workforce. The effort began in the second quarter of fiscal year 2023 and cost the company $600 million. HP (HPQ.N): The computing devices maker said it expected to cut up to 6,000 jobs by the end of fiscal year 2025. Workday (WDAY.O): The software company will cut roughly 500 jobs, or 3% of its workforce, citing a challenging macroeconomic environment. NetApp (NTAP.O): The cloud firm announced an 8% reduction in its global workforce. The company had 12,000 employees as of April 29, 2022. Rivian Automotive (RIVN.O): The company is laying off 6% of its workforce in an effort to cut costs as the EV maker, already grappling with falling cash reserves and a weak economy, braces for an industry-wide price war. Match Group (MTCH.O): The Tinder parent said on Feb. 1 this year it would lay off about 8% of its workforce, a day after it forecast first-quarter revenue below Wall Street expectations. Dell Technologies (DELL.N): The company said in February 2023 it would eliminate about 6,650 jobs, or 5% of its global workforce, as the PC maker grapples with falling demand and braces for economic uncertainty. Palantir Technologies (PLTR.N): The data analytics firm said it had cut about 2% of its workforce. Palantir, known for its work with the U.S. Central Intelligence Agency, had 3,838 full-time employees as of Dec. 31, 2022. Twilio (TWLO.N): The cloud communications company said it would cut an additional 5% of its workforce. In February this year it had said it would eliminate about 17% of roles as part of a restructuring effort to focus on profitability. FINANCIAL SECTOR Goldman Sachs Group (GS.N): Goldman Sachs began laying off staff on Jan. 11, 2023, in a sweeping cost-cutting drive, with around a third of those affected coming from the investment banking and global markets division, a source familiar with the matter told Reuters. The job cuts are expected to be just over 3,000, one of the sources said on Jan. 9, in what would be the biggest workforce reduction for the bank since the financial crisis. Morgan Stanley (MS.N): The Wall Street powerhouse was planning to cut about 3,000 jobs in the second quarter ended June 30, Reuters reported in May. In December 2022, the bank had laid off about 1,600 employees, according to a source familiar with the matter. Citigroup (C.N): The bank eliminated dozens of jobs across its investment banking division in November 2022, as a dealmaking slump continued to weigh on Wall Street's biggest banks, Bloomberg News reported. BlackRock (BLK.N): The asset manager is cutting up to 500 jobs, Insider reported, citing a memo. Lazard (LAZ.N): The New York-based investment bank said in April it would cut around 10% of its workforce in 2023. Genesis: The cryptocurrency firm has cut 30% of its workforce in a second round of layoffs in less than six months, Reuters reported in January. Coinbase Global (COIN.O): The cryptocurrency exchange slashed about 950 jobs earlier this year, marking the third round of workforce reduction in less than a year after cryptocurrencies, already squeezed by rising interest rates, came under renewed pressure following the collapse of major exchange FTX. Stripe: The digital payments firm said it was cutting its headcount by about 14% and would have about 7,000 employees after the layoffs, according to an email to employees from the company's founders in November last year. CONSUMER AND RETAIL SECTOR Beyond Meat (BYND.O): The vegan meat maker said it plans to cut 200 jobs this year, with the layoffs expected to save about $39 million. DoorDash : The food delivery firm, which enjoyed a growth surge during the pandemic, said in November last year it had cut its corporate headcount by about 1,250 employees. Bed Bath & Beyond: The retailer, which filed for Chapter 11 bankruptcy protection, cut 1,300 jobs at four locations in New Jersey in March this year. Last year, company executives had said the home goods retailer was cutting about 20% of its corporate and supply chain workforce. ENERGY AND RESOURCES SECTOR Dow (DOW.N): The U.S. chemicals maker said it would cut about 2,000 jobs as it navigates challenges including inflation and supply chain disruptions. Phillips 66 (PSX.N): The refiner reduced employee headcount by over 1,100 as it seeks to meet its 2022 cost savings target of $500 million. The reductions were communicated to employees in late October 2022. HEALTH AND PHARMACEUTICAL SECTOR Johnson & Johnson (JNJ.N): The pharmaceuticals giant said in October last year it might cut some jobs amid inflationary pressure and a strong dollar, with CFO Joseph Wolk saying the healthcare conglomerate is looking at "right sizing" itself. MANUFACTURING SECTOR 3M Co (MMM.N): The industrial conglomerate said in April it will cut about 6,000 positions globally in a second round of layoffs this year. In January, it said it would cut 2,500 manufacturing jobs after reporting a lower profit. https://www.reuters.com/markets/us/tech-firms-wall-street-lead-job-cuts-corporate-america-2023-12-04/
2023-12-04 14:54
Sugar price rises despite government move to push it down Currency, officially 31 to USD, dips to 50 on black market Interest payments on debt soar to record in July-Sept period Devaluation, asset sales, higher inflation could follow vote CAIRO, Dec 4 (Reuters) - In the run-up to Egypt's Dec. 10-12 presidential election, financially strapped people queue at state-managed cooperatives trying to buy scarce rations of subsidised sugar. It is the latest sign of economic pressures that have risen sharply since early last year, leaving Egyptians grappling with soaring prices and an unresolved foreign currency crunch, and overshadowing pledges to push through delayed reforms. Despite the economic woes, President Abdel Fattah al-Sisi is expected to cruise to a third term, with credible opposition movements sidelined or crushed and the Arab world's most populous country distracted by the war in neighbouring Gaza. But once the vote is over, analysts will be watching closely for austerity measures they believe were postponed for the elections and could start to put Egypt's finances back in order. That will be a steep challenge. Years of prodigious borrowing abroad has left Egypt with heavy foreign debt and a shortage of the hard currency needed to buy essential commodities. Disbursements in a $3 billion financial support package from the International Monetary Fund signed in December 2022 were halted after Egypt fell behind on its pledge to adopt a flexible exchange rate, as well as pull the state and the military back from their dominant position in the economy. In the last few months, an already weakened currency has plunged to about 50 pounds to the dollar on the black market compared to the official rate of 31 pounds. Debt repayments due in 2024 stand at an all-time high of at least $42.26 billion, according to central bank data. Keen to avoid unrest at a time of election tensions, the cabinet announced in October it had agreed with private producers and retailers to cut prices on staple foods, including sugar, by 15-25% after inflation soared to a record high. But the effort met with scant success. Within weeks the retail sugar price jumped to 55 Egyptian pounds ($1.78) from about 35 pounds in early October. "Prices are so, so expensive - for people with money and people without," said Tamer Ahmed, a 46-year-old vegetable peddler outside a cooperative where the government sells subsidised products. "We wait for the cooperative to provide sugar, where a kilo is 27 pounds. At the supermarket, you can get it, but for 50, or 55 pounds." At the supermarket, he added, "we don't say we'll take a kilo. We say we'll take half a kilo. Or 5 pounds worth." BURGEONING DEBT BILL Priced out of global debt markets, the government has financed a widening deficit by expanding domestic borrowing at a time when interest rates have been surging both domestically and abroad, leading to even bigger deficits. Outstanding treasury bills and bonds surged to 5.04 trillion pounds as of end-October 2023 from 4.35 trillion a year earlier, with maturities shortening. The average yield on a one-year T-bill climbed to 26.80% at an auction on Nov. 30 from 18.65% a year earlier. The interest bill on Egypt's domestic and foreign debt more than doubled in the July-to-September quarter from a year earlier, according to finance ministry data. "Without IMF funding – and ideally an augmented amount, if not more pledges of linked funding from the Gulf – a debt crisis will eventually be inevitable," said Patrick Curran at research group Tellimer. "And without a devaluation, I don't see how they get the programme back on track." The three major rating agencies, Moody's, S&P and Fitch, all recently downgraded Egypt's sovereign debt further into junk territory. In its Oct. 20 downgrade, S&P said it believed the election, scheduled earlier than originally expected, could create political space for economic reforms including a currency devaluation to near the parallel market rate. Fitch, in a Nov. 3 downgrade, said it expected privatisation to accelerate, costly mega infrastructure projects to slow down, and the currency to be adjusted after the election, likely paving the way for a new and bigger IMF package. But any devaluation could edge inflation back up. "We'll be hovering at 34-35% until the end of the year, and starting the first quarter we are headed back to the 40% range because of the devaluation and its pass-through impacts," Allen Sandeep of Naeem Brokerage predicted. The war in Gaza has brought statements of solidarity for Egypt from Gulf and Western allies, but no promises of the kind of financial support they provided in the past. There are also new risks. A temporary, security-related suspension of natural gas exports by Israel in October forced Egypt to expand rolling power cuts across the country to two hours a day from one hour previously. Farouk Soussa of Goldman Sachs cautioned that austerity was not a foregone conclusion since Egypt's cost-of-living crisis would make reform difficult even after the vote. "The barrier to reform, particularly foreign exchange reform, will be as high in January as it is today," he said. ($1 = 30.8500 Egyptian pounds) https://www.reuters.com/world/africa/currency-inflation-woes-focus-egypts-sisi-set-third-term-2023-12-04/
2023-12-04 14:44
DUBAI, Dec 4 (Reuters) - Flashy country pavilions, corporate-sponsored cocktail parties and a smorgasbord of side events have turned the annual U.N. climate summit into what some say is a trade show or circus. In this year's gleaming host city of Dubai, billboards advertise the benefits of wind energy, climate ambition and Exxon Mobil's (XOM.N) carbon capture projects. And with a record 84,000 registered attendees, this year's Conference of the Parties, or COP28, is a far cry from the first in Berlin in 1995, a low-key affair with fewer than 4,000 delegates focused on multilateral climate change cooperation. This is seen by some as a sign of success and by others as a dangerous distraction from the business of combating climate change as over nearly three decades global oil demand, carbon emissions and temperatures have marched steadily upward. "It's a lobby fest where polluters can schmooze with politicians, all under the guise of tackling climate change," Pascoe Sabido, a researcher at the Corporate Europe Observatory, which scrutinizes corporate influence on policy-making, said. The United Nations and COP backers say the planet would be much worse off without them. For Alden Meyer, a senior associate at think tank E3G who has attended every COP, the carnival-like atmosphere is a positive sign of increasing global engagement in the climate crisis, even if it meant long queues for food and coffee. "It's a three-ring circus, and it is a good thing. It means the issue has reached critical mass," Meyer said. Lisa Jacobson, president of the 65-member Business Council for Sustainable Energy, which represents the energy efficiency, natural gas and renewable energy industries, agrees. Jacobson recalls that in 2000 in The Hague, the turnout was so low that everyone fitted into one auditorium. Having more than 80,000 people attend is something she only dreamed of. "It's all we wished for," she said. PLEDGES Countries have adopted a strategy of announcing voluntary pledges and initiatives at the start of COPs. These are meant to set a positive tone as delegations grind through two weeks of tough negotiations. In Dubai, this process went into overdrive, with a succession of non-binding agreements: from promises to triple global renewable energy and nuclear power capacity, to speeding the shift from coal and helping farmers improve soil quality. Others proved more contentious, with oil and gas companies promising to decarbonise their operations rather than reducing production of the fossil fuels responsible for global warming. In the first five days of COP28, dozens of voluntary partnerships were launched or expanded and at least 37 new financial pledges made, the Global Strategic Communications Council, which is tracking the promises, said. Some worry pledges could distract from the real business. "We're always and – increasingly - cautious about the proliferation of additional declarations and pledges promoted at the COP," said Daniel Lund, special adviser on climate to the island nation of Fiji. "Fiji has joined calls in the past that were meant to be long-standing initiatives, but were quickly forgotten." Indonesia President Joko Widodo at a G77-China summit on the sidelines of COP28 said on Sunday that these pledges look good, but divert attention from what developed countries need to do now to combat climate change. "COP28 must be an event to accelerate implementation, not a show of ambition," he said. Jake Schmidt, director of international programs at the Natural Resources Defense Council, said the pledges require accountability to prevent an epidemic of "file and forget". "While they create momentum for the talks at hand, it's not clear there are a lot of mechanisms to hold people to account to deliver," he added. BIG OIL While oil companies have always had a COP presences, U.N. documents show, they have largely operated behind the scenes. But in Dubai, the COP28 president's day job is running the UAE state oil firm, while heavy hitters such as Exxon Mobil CEO Darren Woods have been in the front row of high-level events. Drillers also briefly took the spotlight with a UAE-led pledge among 50 oil and gas companies, including Exxon, to cut CO2 emissions from their operations. "The promises made clearly fall short of what is required," U.N. Secretary General Antonio Guterres told business leaders. The UAE, an OPEC member, has argued that fighting climate change does not have to mean eliminating fossil fuels because technologies can be deployed to keep emissions from the atmosphere - a position that has drawn widespread criticism. For former U.S. Vice President Al Gore, the whole COP process needs a rethink. "When you have a petrostate in charge of the process, then we have this ridiculous situation where the main polluters have to give their permission for the world to make common sense decisions to save the future of humanity," he said. For daily comprehensive coverage on COP28 in your inbox, sign up for the Reuters Sustainable Switch newsletter here. https://www.reuters.com/world/middle-east/cop28-crowds-dangerous-distraction-or-sign-success-2023-12-04/
