2023-11-07 21:27

LISBON, Nov 7 (Reuters) - Portugal's Prime Minister Antonio Costa stepped down on Tuesday after the prosecutor's office announced it was investigating alleged corruption in multi-billion dollar lithium, "green" hydrogen and data center deals. Prosecutors said in a statement that five people had been detained as part of the investigation, including Vitor Escaria, Costa's chief of staff, and a business consultant. The prosecutors' investigation is targeting two lithium exploration concessions in northern Portugal, and a green hydrogen plant and large-scale data center in Sines. Here are the projects, and the national and foreign companies, targeted by investigations: LITHIUM: - With 60,000 metric tonnes of known reserves, Portugal is already Europe's biggest producer of lithium, although miners are only now preparing to produce the higher-grade lithium that is used in electric cars and to power electronic appliances. - The investigation targets two mining concessions awarded to Portuguese company Lusorecursos to dig for lithium, and another given to London-based mining company Savannah Resources (SAVS.L). - Lusorecursos said in 2019 that it planned to invest around 400 million euros ($427 million) in the projects, including 300 million euros to build an on-site refinery. - Savannah Resources wants to build four open-pit mines in Barroso, producing enough lithium each year for around half a million EV batteries. - Savannah Resources said in a statement it was cooperating with the authorities who visited some of its locations, but that neither the company nor any of its staff were the targets of the investigation. Work at the Barroso Lithium Project continued unencumbered. - Both concessions in northern Portugal have faced strong opposition from local communities and environmental activists. 'GREEN' HYDROGEN: - Another deal being scrutinised is the creation of a 100 megawatt (MW) hydrogen production hub in Sines, a seaside municipality south of Lisbon, by the H2Sines consortium, which was launched in 2020 and whose partners initially included EDP (EDP.LS), Galp (GALP.LS), Engie (ENGIE.PA), Vestas (VWS.CO), Bondalti and Martifer. - In 2021, EDP and Galp announced they would leave the H2Sines consortium and then formed a new consortium called GreenH2Atlantic. - H2Sines aims to produce green hydrogen and transport it by sea to Rotterdam in the Netherlands, and it applied for Important Projects of Common European Interest status. Their goal is to build an electrolyzer to produce green hydrogen with 100 MW power. LARGE-SCALE DATA CENTER: - Under investigation is also a large-scale data center in Sines created to tap demand from global tech firms. - The project was launched by U.S. investment fund Davidson Kempner and British investment firm Pioneer Point Partners, which expected to invest up to 3.5 billion euros by 2025. - The two companies said the campus in Sines would include five buildings with the capacity to supply up to 450 megawatts of cheap energy from renewable sources to servers. ($1 = 0.9367 euros) (This story has been corrected to clarify that the 'green' hydrogen consortium is H2Sines and not GreenH2Atlantic; adds paragraph to clarify that EDP and Galp left H2Sines consortium in 2021 and created a new one) https://www.reuters.com/world/europe/deals-targeted-corruption-probe-that-led-portugal-pm-step-down-2023-11-07/

2023-11-07 21:23

Fed speakers keep focus on inflation Uber gains after Q3 results Datadog jumps on annual forecast raise Dow up 0.17%, S&P 500 up 0.28%, Nasdaq up 0.90% Nov 7 (Reuters) - U.S. stocks rose on Tuesday, with the S&P 500 and Nasdaq notching their longest streak of gains in two years, as a retreat in U.S. Treasury yields buoyed megacap growth stocks while investors sought more clarity on interest rates from the Federal Reserve. The benchmark 10-year Treasury note yield was on pace for its fifth decline in six sessions on expectations the Fed is done with its rate hike cycle. Yields extended losses after a solid auction of $48 billion in 3-year notes with auctions of the 10-year note and 30-year bond due later this week. Expectations that the Fed's rate hike cycle is at an end have increased in recent days, but the market remains sensitive to the possibility of more hikes, and central bank officials have been cautious in comments on the future rate path. Markets are pricing in a 90.2% chance the Fed will once again hold rates steady at its December policy meeting, up from 68.9% a week ago, according to CME's FedWatch Tool. Fed Governor Christopher Waller said on Tuesday that third-quarter U.S. economic growth, at an annualized 4.9% rate, was a "blowout" performance that warrants watching as the central bank considers its next policy moves. Fellow Governor Michelle Bowman said she took the recent Gross Domestic Product number as evidence the economy not only "remained strong," but might have gained speed and requires a higher Fed policy rate. Federal Reserve Bank of Minneapolis President Neel Kashkari and Chicago Fed President Austan Goolsbee also refused to rule out rate cuts. Fed Chair Jerome Powell is set to speak on Wednesday and Thursday. "That is the story today, that the Fed is done, but yesterday it was maybe not. Powell is going to speak on Thursday so that is going to leave the door open," said Ken Polcari, managing partner at Kace Capital Advisors in Boca Raton, Florida. "But what the market is telling you - the market, traders - are pushing for is we're all done, it's a rate cut, almost as if they are trying to force the hand." The pullback in yields helped lift megacap growth names such as Microsoft (MSFT.O), up 1.1%, Apple (AAPL.O), up 1.5%, and Amazon, which gained 2.1% as the biggest boosts to both the S&P 500 and Nasdaq. The Dow Jones Industrial Average (.DJI) rose 56.94 points, or 0.17%, to 34,152.8; the S&P 500 (.SPX) gained 12.40 points, or 0.28 %, at 4,378.38 and the Nasdaq Composite (.IXIC) added 121.08 points, or 0.90 %, at 13,639.86. The S&P 500 (.SPX) scored its seventh straight day in the green, with the Nasdaq (.IXIC) recording its eighth straight advance, the longest such streak for each index in two years. The Dow gained for a seventh straight session, its longest since a 13-session run in July. Energy (.SPNY), the worst performing sector on the session, fell 2.2% as crude prices settled down more than 4% on demand concerns and a firmer dollar. Dallas Federal Reserve Bank President Lorie Logan also chimed in, saying that while she supported leaving the Fed's policy rate on hold last week to assess if financial conditions are sufficiently tight to bring down inflation, it still remains too high. Uber Technologies (UBER.N) rose 3.7% as the ride-hailing firm projected fourth-quarter adjusted core profit above estimates. Datadog (DDOG.O) surged 28% after raising its forecast for annual adjusted profit and revenue. Declining issues outnumbered advancers by a 1.2-to-1 ratio on the NYSE, while on the Nasdaq declining issues outnumbered advancers by a 1.1-to-1 ratio. The S&P 500 posted 15 new 52-week highs and three new lows while the Nasdaq recorded 48 new highs and 145 new lows. Volume on U.S. exchanges was 10.08 billion shares, compared with the 10.94 billion average for the full session over the last 20 trading days. https://www.reuters.com/markets/us/futures-dip-rate-cut-optimism-wanes-more-fed-speakers-tap-2023-11-07/

2023-11-07 21:22

Nov 7 (Reuters) - Occidental Petroleum (OXY.N) on Tuesday beat analysts' third-quarter profit estimates on strong U.S. oil production, but its results were well below a year ago due to lower energy prices and weaker chemical and pipeline results. The oil and gas company reported a $1.18 a share profit compared to Wall Street analysts forecast for an 84-cent profit, according to LSEG. Adjusted earnings of $1.13 billion were below the year-ago's $2.47 billion. U.S. oil producers are reporting weaker third-uarter profits on a drop in oil and gas prices from a year ago. The company sold its oil last quarter for an average $80.70 per barrel, down from $83.64 per barrel a year-ago. Shares were up 70 cents a share in late trading after closing down 2.5% at $60.20 apiece. The U.S. oil and gas producer pumped 1.22 million barrels of oil and gas per day (mboed), well above the 1.19 mboed midpoint it was forecast in August. It also raised its full-year production guidance by 11,000 bpd. Results were also helped by asset sales of $142 million after tax, including properties in the Permian Basin. Its chemical and midstream units fell compared to a year ago. Midstream swung to a loss of $130 million from a $104 million profit a year ago. Profit in its chemicals business fell to $373 million from $580 million a year ago. Separately, Occidental said investment firm BlackRock (BLK.N) agreed to invest $550 million in a proposed direct air capture carbon project in Texas. WTI crude prices increased 9.4% on a sequential basis during the quarter, on the back of the extension of production cuts by OPEC+ members led by Saudi Arabia and Russia. On an adjusted basis, the company earned $1.18 per share, compared with average analysts' estimate of 84 cents per share, according to LSEG data. https://www.reuters.com/business/energy/occidental-petroleum-beats-quarterly-profit-estimates-2023-11-07/

2023-11-07 21:16

Nov 7 (Reuters) - Robinhood Markets (HOOD.O) missed Wall Street estimates for third-quarter revenue on Tuesday, weighed by a slowdown in trading activity, sending shares of the online brokerage down more than 9% in extended trading. Robinhood was at the center of the 2021 retail trading frenzy, driven by mom-and-pop investors who used the company's commission-free platform to pump money into so-called "meme stocks" during the pandemic-era lockdowns. The boost has since faded as Americans grappling with a cost-of-living crisis, high interest rates and elevated levels of inflation put trading on the back foot. Robinhood's transaction-based revenue decreased 11% year-over-year to $185 million amid a 13% decline in equities and a 55% decrease in cryptocurrencies. Monthly active users dropped 16% to 10.3 million from a year earlier. According to company executives, Robinhood often sees lower trading volumes around the holidays in November and December. The company also expects its interest revenue to decline in the current quarter on a sequential basis. "If the current levels of securities lending and free credit balances continue, we anticipate Q4 net interest revenue will be roughly $20 million lower than Q3 levels," said CFO Jason Warnick in a call with analysts. Robinhood's net interest revenue, however, nearly doubled to $251 million in the quarter as it charged customers a higher interest on their loans against the backdrop of the U.S. Federal Reserve's rapid monetary policy tightening. It allows eligible customers to borrow money to purchase securities and charges an interest on the debt. The feature, known as "margin investing", has provided sanctuary to the retail investor-focused firm in recent quarters amid a deceleration in trading. Robinhood's net revenue rose 29% to $467 million in the three months ended Sept. 30, but missed analysts' expectations of $478.4 million, as per LSEG data. Its loss per share narrowed to 9 cents versus 20 cents a year earlier. https://www.reuters.com/business/finance/robinhood-revenue-jumps-higher-rates-boost-interest-income-2023-11-07/

2023-11-07 21:14

WASHINGTON, Nov 7 (Reuters) - Federal Reserve policymakers fresh from last week's decision to hold the policy rate steady are weighing strong economic data, some signs of a slowdown, and the impact of higher long-term bond yields as they consider if they will need to hike rates further to bring down inflation. Third-quarter U.S. economic growth, at an annualized 4.9% rate, was a "blowout" performance that warrants "a very close eye when we think about policy going forward, Fed Governor Christopher Waller said on Tuesday. An ardent advocate of aggressive Fed rate hikes to battle high inflation, Waller did not include a policy recommendation in his remarks to an economic data seminar at the St. Louis Fed. His presentation also noted signs that job growth was slowing, and what he called the "earthquake" wrought by higher and potentially growth-dimming long-term bond yields. But in comments to the Ohio Bankers League, Fed Governor Michelle Bowman said she took the recent GDP number as evidence the economy not only "remained strong," but may have gained speed and require a higher Fed policy rate. "I continue to expect that we will need to increase the federal funds rate further," Bowman said. At yet another event, Dallas Fed President Lorie Logan noted that "all of us" have been surprised at how strong the economy has been, and that despite some progress inflation is trending toward 3% rather than the Fed's goal of 2%. The labor market despite cooling remains "very tight," she said, and longer-term bond yields, whose rise helped convince she and others to leave rates on hold last week, have fallen. "We're going to continue to need to see tight financial conditions in order to bring inflation to 2% in a timely and sustainable way," Logan said, adding that she'll watch both economic and financial conditions as the Fed's next meeting, in December, approaches. Explicit endorsements for higher rates have become rarer among Fed officials since July, when the Fed raised the benchmark rate by a quarter point, to the current 5.25% to 5.5% range, in what many analysts expect will prove the last move in a monetary tightening cycle that began in March of 2022. Indeed more recent data suggest the outsized pace of growth in the July-September period may prove an outlier for the year, with manufacturing and job growth both cooling in October, a bank loan officers survey showing continued credit tightening and a drop in loan demand in recent months, and a New York Fed report on Tuesday noting a rise in consumer loan delinquencies. That combination of data potentially shows the sort of economic slowing that Fed officials have expected as the sometimes slow-moving impact of central bank interest rate hikes is felt more broadly. Based on incoming economic data, the Atlanta Fed's GDPNow model suggests fourth-quarter gross domestic product will grow at an annualized rate of just 2.1%, edging towards a pace Fed officials might view as allowing inflation to continue slowing to their 2% target. By the Fed's preferred personal consumption expenditures price index inflation was 3.4% as of September. 'CLEARLY CALMING DOWN' Many economists expect the Fed to hold interest rates steady at the upcoming Dec. 12-13 policy meeting, in part due to that anticipated slowdown and the ongoing tightening of borrowing and credit conditions. In comments on Monday, Fed Governor Lisa Cook took particular note of rising debt stress. While it was not broadly apparent among "resilient" U.S. households, she said, "we are seeing emerging signs of stress for households with lower credit scores, and individual borrowers may struggle with debt burdens in the face of economic hardships," a dynamic that at the margin will begin to trim consumer spending and, in the extreme, could make banks even more reluctant to lend. In comments to CNBC on Tuesday, Chicago Fed President Austan Goolsbee noted that inflation has been slowing, and that the rise in market-based interest rates, "if ... sustained at high levels" most likely represents a tightening of credit for families and businesses. The yield on the 10-year Treasury note, which had risen about a full percentage point since July, was still up about 75 basis points from then despite a drop since last week. "We have got to take that into account ... We should expect to see that, with a lag, working its way through the economy. So we're all paying attention and trying to figure out what the driver is," Goolsbee said. However neither Goolsbee nor Minneapolis Fed President Neel Kashkari, who spoke to Bloomberg Television on Tuesday, ruled out further Fed rate increases. Noting, as Waller did, the recent "hot" readings on economic activity, Kashkari said "that makes me question if policy is as tight as we assume it currently is." "If you saw inflation tick back up and you saw continued very strong economic activity in the real side of the economy, that would tell me we might need to do more," Kashkari added. https://www.reuters.com/markets/us/feds-waller-calls-q3-us-gdp-growth-blowout-number-that-warrants-watching-2023-11-07/

2023-11-07 21:12

TSX ends down 0.9%, at 19,575.59 Energy falls 3.8%; oil settles 4.3% lower Materials sector loses 1.9% Crescent Point Energy drops after acquisition deal Nov 7 (Reuters) - Canada's main stock index fell on Tuesday, extending its pullback from a six-week high, as a sharp decline in commodity prices led to a sell-off in the materials and energy sectors. The Toronto Stock Exchange's S&P/TSX composite index (.GSPTSE) ended down 168.35 points, or 0.9%, at 19,575.59. It was the second straight day of declines for the index after it posted on Friday its highest closing level since Sept. 20. In contrast, U.S. benchmark the S&P 500 notched its longest streak of gains in two years as long-term borrowing costs eased. "Oil is at a multi-month low, much to the surprise of those that were concerned about energy prices with the conflict in the Middle East," said Barry Schwartz, a portfolio manager at Baskin Financial Services. "I think the market is pricing in lower growth for the worldwide economy going forward ... Energy is a commodity based on a strong economy." U.S. crude oil futures fell to their lowest level since July, settling down 4.3% at $77.37 a barrel, as mixed Chinese economic data and rising OPEC exports eased fears about tight markets. The energy sector fell 3.8%, while the materials sector, which includes precious and base metals miners and fertilizer companies, lost 1.9% as gold and copper prices also declined. Heavily-weighted financials were down 0.7%, giving back some recent sharp gains. Crescent Point Energy Corp (CPG.TO) was among the biggest decliners. Its shares fell 9.9% as the company announced a deal to acquire Hammerhead Energy (HHRS.TO), potentially creating Canada's seventh biggest energy producer. Shares of Stella-Jones (SJ.TO) rose 7.4%, leading gains, after the wood products maker reported higher revenue and profit in the third quarter. https://www.reuters.com/markets/tsx-futures-slip-lower-commodity-prices-weigh-2023-11-07/