2023-10-31 22:14

Caterpillar drops on signs of slowing machinery demand Pinterest rises on quarterly profit, revenue beat Sarepta slumps on muscle disorder therapy failure Indexes advance: Dow 0.38%, S&P 0.65%, Nasdaq 0.48% Oct 31 (Reuters) - Wall Street's main indexes ended Tuesday's session with gains as investors looked ahead to the Federal Reserve's monetary policy update while they digested a mixed batch of earnings reports. The Fed kicked off a two-day monetary policy meeting. The central bank is widely expected to hold interest rates steady on Wednesday, and investors will monitor its statement and Fed Chair Jerome Powell's comments for clues about its plans. Optimism that the Fed would pause rate hikes was offset by reactions to disappointing earnings reports and jitters over geopolitics. Shares in heavy-machinery maker Caterpillar (CAT.N) sank 6.7% as signs of slowing demand overshadowed a quarterly earnings beat. And drugmaker Amgen's (AMGN.O) stock fell 2.8% as third-quarter sales of some high-profile medicines were below expectations. But with 10-year Treasury yields up just slightly for much of the day, some investors looked for bargains in light of recent weakness in stocks, said Sameer Samana, Senior Global Market Strategist at Wells Fargo Investment Institute. "All roads right now lead back to long-term rates which impact equities," said Samana, adding that in stocks some investors may be encouraged by the idea that, "the recent sell-off brings us back to fairly valued from over-valued levels." However the strategist was wary of upcoming events that could be huge catalysts for bonds and in turn equities. Along with the Fed's policy update, he is also waiting for the U.S. Treasury Department's financing plans due out on Wednesday. Analysts have said it is likely to boost the size of auctions for bills, notes, and bonds in the fourth quarter to fund a widening budget deficit. This would cause rates to rise further and hurt stocks, according to Wells Fargo's Samana. On Friday, investors will also monitor the October U.S. jobs report and the Treasury market's reaction. The Dow Jones Industrial Average (.DJI) rose 123.91 points, or 0.38%, to 33,052.87, the S&P 500 (.SPX) gained 26.98 points, or 0.65%, to 4,193.8 and the Nasdaq Composite (.IXIC) added 61.76 points, or 0.48%, to 12,851.24. All 11 of the S&P 500's major industry sectors advanced, with real estate (.SPLRCR) up 2% and leading gains, while the biggest laggard, communication services (.SPLRCL), gained 0.2%. "Today's move back into positive territory is on the growing consensus the Fed is more likely to hold off on any more rate hikes this year," said Greg Bassuk, chief executive of AXS Investments in New York. Bassuk also pointed to mixed earnings reports and companies "messaging concerns about upcoming quarters with energy prices rising and increasing uncertainty" around wars in Israel and Ukraine that are "showing no end in sight." All three of Wall Street's major averages registered their third monthly loss in a row. For the S&P 500, down 2.2% for the month, and the Dow, off 1.4%, it was the longest monthly losing streak since the pandemic roiled markets in early 2020. Nasdaq which lost 2.8% in October, last fell for three straight months in the period ending June 2022. Earlier in the day, data showing a solid increase in U.S. labor costs in the third quarter prompted some concerns the Fed could keep interest rates higher for longer. Of the 279 companies in the S&P 500 that have reported earnings to date, over 78% have beaten analyst estimates, per LSEG data. Analyst expect earnings growth of 4.9% for S&P 500 companies in the third quarter. In individual stocks, Nvidia (NVDA.O) shares closed well above their session low but still down 0.9%, after a report said the latest U.S. curbs could force the chip designer to cancel billions of dollars of orders to China. Pinterest (PINS.N) shares ralled 19% after the image-sharing platform beat third-quarter revenue and profit estimates. VF Corp (VFC.N) shares sold off almost 14% after the Vans sneaker maker withdrew its annual forecast. But Arista Networks (ANET.N) stock rallied 14% after it gave an upbeat fourth-quarter revenue outlook. Sarepta Therapeutics (SRPT.O) shares plummeted 37.5% on the failure of its muscle disorder gene therapy in a late-stage trial. Shares of Sarepta's client, Catalent (CTLT.N), fell 13.9%. Advancing issues outnumbered declining ones on the NYSE by a 2.31-to-1 ratio; on Nasdaq, a 1.69-to-1 ratio favored advancers. The S&P 500 posted 1 new 52-week highs and 15 new lows; the Nasdaq Composite recorded 16 new highs and 262 new lows. On U.S. exchanges 10.67 billion shares changed hands compared with the 10.64 billion average for the last 20 sessions. https://www.reuters.com/markets/us/futures-mixed-after-previous-sessions-rally-fed-meet-focus-2023-10-31/

2023-10-31 21:52

Nov 1 (Reuters) - A look at the day ahead in Asian markets from Jamie McGeever, financial markets columnist. It promises to be another dramatic day in Asia on Wednesday, as investors digest the huge moves in Japan's government bond and currency markets and brace for a raft of potentially market-moving economic indicators from across the continent. The U.S. Federal Reserve policy decision and details from the U.S. Treasury outlining its $776 billion fourth quarter borrowing needs are the two major global events on Wednesday. But Asian markets' first chance to react to that will be Thursday. Before then, purchasing managers index reports for several countries, including India, South Korea and Indonesia are on tap, as well as Indonesian inflation, South Korean trade, Hong Kong retail sales and Australian housing data. Particular attention will be paid to China's 'unofficial' Caixin PMI report, a day after 'official' PMI data showed that factory activity unexpectedly contracted in October. Not only that, it shrank faster than the most pessimistic prediction in a Reuters poll had forecast. This calls into question the strength of China's recovery. Economic surprises had recently risen to the highest since May, and stocks had rallied five days in a row. That run was brought to a halt on Tuesday. A gloomy 'official' PMI report would likely intensify that downward pressure on stocks, and the currency. The yuan is languishing near September's 16-year low, and selling pressure bearing down on the offshore yuan, in particular, is strong. But if the yuan is under pressure, it is nothing compared to the onslaught Japan's yen is facing. After the Bank of Japan on Tuesday scrapped the 1% ceiling for the 10-year government bond yield, the yen sank to a new one-year low against the dollar and a fresh 15-year low against the euro. The currency and bond market reactions to the BOJ's policy tweak could not have been more different - the yen fell the most since April, while Japanese bond yields surged to a fresh decade-high. This suggests investors are not sure what the longer term implications are, or they are not fully convinced by the BOJ's actions. Or both. World and U.S. stocks ended the month with a flourish on Tuesday, Wall Street volatility fell back below long-term averages, the Treasuries market was pretty steady, and oil prices fell more than 1%. All this bodes well for the Asian market open on Wednesday. But it was a bruising start to the fourth quarter. World, U.S. and Asian stocks all fell for a third month in a row, bond yields surged and financial conditions tightened significantly. Investors will be hoping for some respite in November. Here are key developments that could provide more direction to markets on Wednesday: - China PMI (Caixin, October) - Indonesia CPI inflation (October) - South Korea trade (October) https://www.reuters.com/markets/asia/global-markets-view-asia-graphics-pix-2023-10-31/

2023-10-31 21:14

Oct 31 (Reuters) - New England will require large amounts of clean energy alongside some traditional power resources and robust transmission to maintain reliable supply of electricity while making the energy transition, a study by the U.S. region's grid operator found. The transition from planet-warming fossil fuels to renewable sources of energy "promises far-reaching changes" to the power grid, said Robert Ethier, vice president of system planning for ISO New England (ISO-NE). Resources like solar and wind, which are weather-dependent and more geographically scattered, cannot mitigate sudden changes in demand like thermal power plants that run on fossil fuels or nuclear reactors, the study said. "Immense resource and transmission buildouts, along with flexible loads and modifications to our grid planning processes, are required to meet the changed needs," the ISO-NE's 2023 Regional System Plan added. ISO-NE said around $12 billion had been spent to upgrade transmission since 2022, and another $1.5 billion of investment was expected through 2027. "A significant increase in the demand for electricity is coming," the study warned, with the electrification of heating and transportation seen pushing peak loads from summer into the winter months as soon as 2031. The study expected sufficient power capacity through the end of the 10-year planning horizon, noting state-supported renewable resources and anticipated growth in solar power and energy efficiency programs. Last month, ISO-NE's president and CEO Gordon van Welie proposed carbon pricing to U.S. lawmakers as a way to compensate carbon-free energy sources and incentivize other resources to cut their emissions. ISO-NE was also among power grid operators that in June backed a proposal by eight Northeast states to expedite the clean energy transition and improve transmission planning across regional borders. https://www.reuters.com/sustainability/climate-energy/new-england-needs-lots-clean-energy-new-power-lines-grid-operators-study-says-2023-10-31/

2023-10-31 21:03

Oct 31 (Reuters) - Chesapeake Energy (CHK.O) beat Wall Street estimates for third-quarter profit on Tuesday, as lower overall costs helped offset the impact of falling natural gas prices, sending its shares 3.4% higher in extended trading. The company's production expenses fell to 23 cents per thousand cubic feet of gas equivalent (mcfe) for the third quarter, below its 2023 expectations. That helped it against falling natural gas prices , which were down 60% in the third quarter, compared with a year earlier, as U.S. production continued to rise and concerns eased over energy security in Europe. "Results beat expectations driven by lower cash costs and better revenue," RBC Capital Markets analysts said. On an adjusted basis, the company reported a profit of $1.09 per share, beating analysts' estimates of 60 cents per share, according to LSEG data. Chesapeake's total production fell about 15% to 3,495 million cubic feet equivalent (mmcfe) per day, as it completed its exit from the Eagle Ford basin earlier this year following pressure from activist investment firm Kimmeridge Energy Management to shift toward solely producing natural gas. It, however, lifted its forecast for 2023 gas production in the range of 3,425 to 3,525 mmcfe per day from the earlier forecast of 3,400 to 3,500 mmcfe per day, boosted by higher volumes in Haynesville. The company also announced an agreement with energy trader Vitol, under which Chesapeake would supply up to 1 million tonnes of liquefied natural gas (LNG) per annum for 15 years starting 2028. Once the agreement is executed, the companies would jointly select the liquefaction facility in the U.S. to produce the contracted LNG, the company said. https://www.reuters.com/business/energy/chesapeake-energy-posts-lower-quarterly-profit-2023-10-31/

2023-10-31 20:56

WASHINGTON, Oct 31 (Reuters) - A group representing major automakers on Tuesday said the industry opposes steelmaker Cleveland-Cliffs' (CLF.N) proposed acquisition of U.S. Steel (X.N), saying it would increase auto industry costs and slow electric vehicle sales. The Alliance for Automotive Innovation, representing General Motors (GM.N), Toyota Motor (7203.T), Volkswagen (VOWG_p.DE), Hyundai(005380.KS) and other major automakers, in a letter to Congress and U.S. regulators cited the combined steel companies' dominant market share for steel used to produce vehicle structural frames, for automotive surface panels like doors, hoods and fenders, as well as steel used for electric vehicle (EV) motors. The letter from Alliance for Automotive Innovation CEO John Bozzella said a merger would "increase costs across the industry for both materials and finished vehicles," and noted 100% of the metal for EV motors known as e-steel would be concentrated in the combined company. "Without competition in the U.S. for the production of e-steel, automakers face an increase in the cost of materials which could ultimately increase the cost of finished EVs for customers," the letter to lawmakers said. The letter, which was also sent to Federal Trade Commission chair Lina Khan and Justice Department Antitrust chief Jonathan Kanter, said the "government should examine the potential for anti-competitive pricing of materials used by steel-reliant automotive manufacturers." Neither steel company immediately responded to requests for comment. U.S. Steel in August rejected Cleveland-Cliff's proposed $7.25 billion price. Cleveland-Cliffs CEO Lourenco Goncalves last week during an earnings call declined to discuss the issue, citing restrictions. In August, U.S. Steel said it had entered into confidentiality agreements with "numerous third parties" and started to review multiple unsolicited proposals ranging from partial acquisition to an entire buyout. https://www.reuters.com/markets/commodities/automakers-oppose-cleveland-cliffs-push-buy-us-steel-2023-10-31/

2023-10-31 20:54

TSX ends up 0.1%, at 18,873.47 For the month, the index loses 3.4% Sell-off continues in First Quantum Minerals Canada's economy flatlines in August Oct 31 (Reuters) - Canada's main stock edged higher on Tuesday but was down for the month of October, as oil prices fell and domestic data added to evidence of a weaker economy. The Toronto Stock Exchange's S&P/TSX composite index (.GSPTSE) ended up 16.71 points, or 0.1%, at 18,873.47. For the month it lost 3.4%, its third straight month of declines. An uncertain outlook for oil and signs of a weaker Canadian economy have pressured the Toronto market, including bank stocks, said Philip Petursson, chief investment strategist at IG Wealth Management "It's pretty much a foregone conclusion that Canada is in recession," Petursson said. "While the Bank of Canada is (likely) done raising rates ... the impact of the rate increases will still flow through the economy in a negative fashion over the course of the next six to 12 months." The Canadian economy stalled in August and likely slipped into a shallow recession in the third quarter, data showed on Tuesday, a sign the central bank's 10 interest rate hikes since last year are weighing on growth. The Toronto market's technology sector rose nearly 1% on Tuesday, while heavily weighted financials added 0.2%, clawing back some recent losses. The sector was down 4.7% in October. The price of oil settled 1.6% lower at $81.02 a barrel as markets worried less about potential supply disruptions from the Middle East conflict and on data showing rising output from OPEC and the United States. Still, energy added 0.3%, faring better than the materials sector, which ended down 2.2%. The sector, which includes precious and base metals miners and fertilizer companies, was pressured by a decline of 19.7% for the shares of First Quantum Minerals Ltd (FM.TO). It was the second straight day of steep losses, as the uncertainty over the future of the company's key Panama copper mine encouraged investors to cut their exposure. https://www.reuters.com/markets/tsx-futures-rise-higher-commodity-prices-gdp-tap-2023-10-31/