2023-11-14 00:36

CPI October reading due early Tuesday Boeing up on report China plans to end 737 deal freeze Medtech companies rally after data on weight loss drug Dow up 0.16%, S&P dips 0.08%, Nasdaq down 0.22% Nov 13 (Reuters) - The S&P 500 closed Monday's session slightly lower as investors held their breath before a crucial inflation reading that could provide clues as to how long the U.S. Federal Reserve will keep interest rates elevated. After the indexes enjoyed a solid rally on Friday, the market turned its focus on Monday to Consumer Price Index (CPI) data, due out Tuesday morning. Economists expect a headline increase of 3.3% for October, easing from 3.7% in September. But core prices are expected to be unchanged from the previous month. The CPI reading, along with labor market, "are clearly in the driver's seat for what matters to financial markets, because it dictates where Fed policy goes from here," said Matt Stucky, chief portfolio manager for equities at Northwestern Mutual Wealth Management Company in Milwaukee, Wisconsin. "The market has the expectation the Fed is done with interest rate hikes and for that to be true, you need to have continued progress on the inflation front," along with labor market cooling, he said. Traders have priced in a nearly 86% chance the Fed holds interest rates steady in December, according to the CME Group's FedWatch tool. While the CPI reading was the key issue keeping investors "in a holding pattern" on Monday, Michael O’Rourke, chief market strategist at JonesTrading in Stamford, Connecticut said they were also digesting a weaker U.S. credit outlook issued. Moody's late on Friday lowered its outlook on the U.S. credit rating to "negative" from "stable", citing large fiscal deficits and a decline in debt affordability. This added to investor reluctance to make big decisions ahead of a weekend deadline that could potentially result in a U.S. government shutdown, O'Rourke said. U.S. House of Representatives Speaker Mike Johnson unveiled a Republican stopgap spending measure on Saturday aimed at averting a shutdown, but the measure quickly met opposition from lawmakers from both parties in Congress. However on Monday afternoon, top U.S. Senate Democrat Chuck Schumer expressed tentative support for Johnson's short-term funding bill that would keep the government open past the weekend. The Dow Jones Industrial Average (.DJI) rose 54.77 points, or 0.16%, to 34,337.87, the S&P 500 (.SPX) lost 3.69 points, or 0.08%, to 4,411.55 and the Nasdaq Composite (.IXIC) dropped 30.37 points, or 0.22%, to 13,767.74. The major U.S. stock indexes had rebounded so far this month, fueled by a stronger-than-expected earnings season and hopes that U.S. interest rates are near their peak. Among the S&P 500's 11 major sectors energy (.SPNY) was the biggest gainer, ending up 0.7% while utilities (.SPLRCU) was the biggest loser, falling 1.2%. Helping keep the Dow afloat, Boeing (BA.N) rallied 4% on Monday after Bloomberg News reported that China is considering resuming purchases of 737 Max aircraft. And, Dubai's Emirates placed an order for 90 more Boeing 777X jets at the opening of the Dubai Airshow on Monday. The S&P healthcare index (.SPXHC) was the benchmark's second biggest percentage gainer, adding 0.6%. It's biggest percentage gainer was dialysis company Davita Inc (DVA.N), which rose 6.5%. Other medtech companies rallying included Insulet (PODD.O), which added 5.6% and Dexcom (DXCM.O), up 4.6%, along with Abbott's (ABT.N) 1.9% gain as analysts reacted to data about the cardiovascular benefits for Novo Nordisk's (NOVOb.CO) weight-loss drug Wegovy. While Tesla (TSLA.O) shares, finishing up more than 4%, added some support to the consumer discretionary index (.SPLRCD) declines in heavyweight stocks such as Apple (AAPL.O) and Microsoft (MSFT.O) helped weigh down the S&P 500 technology index (.SPLRCT). Advancing issues outnumbered declining ones on the NYSE by a 1.08-to-1 ratio; on Nasdaq, a 1.03-to-1 ratio favored decliners. The S&P 500 posted 24 new 52-week highs and 7 new lows; the Nasdaq Composite recorded 52 new highs and 227 new lows. On U.S. exchanges 9.34 billion shares changed hands compared with the 10.97 billion after for the last 20 sessions. https://www.reuters.com/markets/us/futures-dip-focus-shifts-economic-data-2023-11-13/

2023-11-13 23:13

BRASILIA, Nov 13 (Reuters) - Brazil raised $2 billion on Monday with its first-ever 'green' bond issuance, part of an effort to set a benchmark for the private market while channeling funds toward the government's ambitious sustainability agenda. The seven-year bonds featured a 6.5% yield, said Finance Minister Fernando Haddad, confirming details reported earlier by Reuters. Speaking to reporters, Haddad described the outcome as "quite significant," emphasizing that the spread of the operation was comparable to those obtained by investment-grade countries. Demand for the bond far outstripped its volume, with the order book nearing $6 billion, the Treasury said in a statement. The final allocation saw substantial participation from non-resident investors, it added, with approximately 75% originating from Europe and North America, while Latin America, including Brazil, accounted for the remaining 25%. A source familiar with the operation, who had spoken on condition of anonymity, stressed that the spread was much lower than what the government got for its conventional $2.25 billion issuance in April. "At this rate of 6.5%, we are trading only 15 points above … a Mexican bond, which is investment-grade," said the source. By early 2016, Brazil had lost all its investment-grade scores after a deep economic recession and political crisis at the end of a global commodity boom. Although ratings agency Fitch upgraded Brazil's credit rating in July and S&P improved its outlook for the country in June, the country has yet to reclaim its coveted investment-grade rating. Brazil's Treasury announced earlier on Monday that the environment, sustainability and governance (ESG)-linked bonds, maturing in 2031, would be issued in dollars, and the outcome would be disclosed at the end of the day. The operation was led by banks Itau BBA, JPMorgan and Santander. In late August, the Finance Ministry's executive secretary Dario Durigan said the government was gearing up to issue "something around $2 billion" that was intended to serve as the financing base for Lula's ambitious ecological transition plan. Government officials have indicated that the proceeds from the operation would primarily bolster the so-called Climate Fund under the oversight of state development bank BNDES. Leftist Lula, who took office in January, has been trying to improve Brazil's environmental track record. His green plan also involves the establishment of a regulated carbon credit market, part of a wider push to attract investment to Latin America's largest economy. https://www.reuters.com/sustainability/sustainable-finance-reporting/brazil-prices-2-bln-first-ever-esg-bond-65-yield-source-2023-11-13/

2023-11-13 22:56

SAO PAULO, Nov 13 (Reuters) - BRF SA (BRFS3.SA), the Brazilian pork and poultry processor, widened its third-quarter loss from the year-ago period as it continued to deal with a chicken oversupply while also trying to rein in grain prices, it said on Monday. BRF reported a 262 million real ($53.37 million) net loss in the third quarter, larger than the 136.7 million loss a year ago but slightly better than an LSEG consensus forecast of a 279 million real loss. Despite the hit, BRF said improvements in the company's operating performance were already showing results. Management hailed a double-digit earnings before interest, tax, depreciation and amortization (EBITDA) margin of 11.9%, "close to historical profitability levels," despite price pressure in the fresh meat segment. BRF also said net revenue was 13.8 billion reais in the quarter, nearly the same as in the year-ago period. Regarding recurring cost pressure from corn, which is used as animal feed, management said the worst may be over. "This quarter, the drop in the cost of grains begins to impact the company's results as we had predicted," said CEO Miguel Gularte in a statement accompanying the results. "Our predictive models, as well as the grain purchasing strategy, are a competitive differentiator for BRF and are proving to be highly efficient," he added. BRF's results, however, still reflect the pain of dealing with a global chicken oversupply, which depressed prices in some markets and affected the sector in general, including rivals like JBS SA. In comments to reporters, management said chicken production has shown signs of slowing in large suppliers like the U.S. and Brazil, while on the demand side, prices are recovering in some markets, bolstering the company's export prospects. BRF said EBITDA came in at 1.2 billion reais ($244.45 million), slightly above LSEG consensus estimates of 1.17 billion reais. ($1 = 4.9089 reais) https://www.reuters.com/business/brazil-food-processor-brf-posts-534-mln-net-loss-q3-2023-11-13/

2023-11-13 22:31

SAO PAULO, Nov 13 (Reuters) - Brazilian car rental firm Localiza (RENT3.SA) said on Monday it recorded a 56.9% growth in third-quarter profit, in line with analysts' estimates as its fleet management business grew. The firm posted a net profit of 664.7 million reais, compared to the consensus estimate of analysts polled by LSEG of 664.52 million reais. Net revenue for Localiza's fleet management division, which rents out and services entire fleets of vehicles to clients, grew 49.2% from the year-ago quarter to 1.73 billion reais. Earnings before interest, taxes, depreciation and amortization (EBITDA) for the quarter reached 2.68 billion reais, up 12.5% from a year earlier. https://www.reuters.com/business/autos-transportation/brazils-localiza-sees-q3-profit-up-57-fleet-management-demand-2023-11-13/

2023-11-13 22:26

WASHINGTON, Nov 13 (Reuters) - Leaders from the United States and Indonesia held discussions on Monday that will set the stage for U.S. President Joe Biden's first in person meeting in a year with Chinese leader Xi Jinping later this week. Biden greeted Indonesian President Joko Widodo at the White House as the two leaders prepare for a Asia-Pacific Economic Cooperation (APEC) summit in San Francisco, where Washington hopes to reduce friction with Beijing. Biden is due to meet Xi on Wednesday. The United States and Indonesia agreed to new cooperation in defense areas including cybersecurity, space, combined exercises and nuclear threats, the White House said. On climate, they agreed on efforts to support the electrical grid and improve air quality. Reuters reported on Sunday that the two countries are working to advance a potential minerals partnership focused on the electric vehicle (EV) battery metal nickel, citing three people with direct knowledge of the conversations. But the Biden administration is still concerned about environmental, social and governance (ESG) standards in Indonesia and is examining how such a deal might work. Biden and Jokowi, as the Indonesian president is popularly known, agreed to form a work plan towards the establishment of a trade agreement on critical minerals, after which Indonesia will supply minerals for U.S. electric vehicle batteries, Indonesian Foreign Minister Retno Marsudi said in a statement after the meeting. Retno said both sides also agreed to immediately implement the Just Energy Transition Partnership (JETP), a $20 billion funding pledged by the U.S. and other G7 countries last year to help Indonesia clean up its energy sector. Indonesia also called for the renewal of the Generalized System of Preferences, Retno said, referring to a U.S. trade facility that Indonesian exports had benefited from before it expired at the end of 2020. INDONESIA MAKES APPEAL TO U.S. ON GAZA Jokowi pressed Biden on steps to end Israel's war with Hamas. "Indonesia appeals to the U.S. to do more to stop the atrocities in Gaza. Ceasefire is a must for the sake of humanity," Widodo said in the Oval Office at the start of talks with the U.S. president. Indonesia, an archipelago of 270 million people, is the largest Muslim-majority nation. Many Muslims have been outraged by Biden's support for Israel after Hamas militants killed about 1,200 people and took more than 200 hostages on Oct. 7, according to Israeli officials. Palestinian officials have said Israeli strikes have killed more than 11,000 Gaza residents. "The president will look to ask Indonesia to a play a larger role and to assist us," in the Middle East, a U.S. official said, without elaborating on what such an expanded role might entail. Like several of its neighbors in Southeast Asia, Indonesia is economically intertwined with China as it navigates territorial disputes with its larger neighbor and wants to avoid getting caught in the middle by hostile Washington-Beijing relations. Jakarta and Washington formally upgraded relations to the highest diplomatic tier as part of the leaders' meeting. The two leaders were expected to discuss Indonesia's diplomatic efforts to resolve the conflict in Myanmar, where the military took control in a 2021 coup and has been engaged in clashes with rebel alliances, one of the officials said. "It's going to be time soon for us to think about what our next steps are together to deal with a situation that is untenable," the person said. Jokowi, first elected in 2014, will leave office next year after serving the maximum two terms. https://www.reuters.com/world/biden-meet-with-indonesia-president-ahead-xi-summit-2023-11-13/

2023-11-13 22:23

Nov 13 (Reuters) - The U.S. needs more natural gas pipeline capacity to maintain reliable gas supply during extreme cold weather, a trade group representing pipeline companies said on Monday in support of regulators who last week urged sought new rules to prevent a repetition of last winter's power outages. The Federal Energy Regulatory Commission (FERC) and the North American Electric Reliability Corp (NERC) urged lawmakers to fill a regulatory blind spot to maintain reliable supply of natural gas that was highlighted by an inquiry into power outages during Winter Storm Elliott in December 2022. Elliott delivered sub-freezing temperatures and extreme weather warnings to almost two-thirds of the U.S., resulting in unforeseen energy generation supply losses. Speaking for operators of around 200,000 miles (322,000 km) of pipelines, the Interstate Natural Gas Association of America (INGAA) said the regulators' report confirmed that its members "used all possible flexibility and storage withdrawals to deliver as much natural gas through the system as possible." Declining production reduced flows of gas into pipelines during Elliott, while demand for the fuel for heating and power generation increased, dramatically lowering line pressures. Falling pressure levels put the pipeline system at risk of collapse, the INGAA said, forcing operators to implement scheduling restrictions and reduce previously confirmed nominations for transporting the fuel. The report had found that in New York City, Consolidated Edison (ED.N) declared an emergency because it faced a system collapse that would have taken "many months" to restore service in the middle of the winter. "The United States needs more natural gas pipeline capacity to maintain a resilient system that affords homes and the power grid access to multiple sources of this critical fuel," the INGAA said. In its 2023-24 winter outlook, the NERC said last week that prolonged, wide-area cold snaps threaten the availability of fuel supplies for natural gas-fired generation, warning there is not enough natural gas pipeline and infrastructure for the U.S. Midwest, Mid-Atlantic, and Northeast regions. https://www.reuters.com/business/energy/us-needs-more-pipeline-capacity-reliable-gas-supply-trade-group-2023-11-13/