2024-08-15 10:08

DUBAI, Aug 15 (Reuters) - Dubai-owned DP World reported a 59% drop in first-half profit on Thursday as the ports and logistics company grappled with shipping disruptions in the Red Sea as tensions flare in the Middle East due to the ongoing Israel-Hamas war in Gaza. Missile and drone attacks in the Red Sea since October by Yemen's Houthi militants, who say they are acting in solidarity with Palestinians in the Gaza war, have forced many ocean freight firms to re-route vessels away from the Suez Canal to around the Cape of Good Hope on the southern tip of Africa. Analysts say Middle East ports like those in the Gulf have lost out on trans-shipment traffic as ships sail around Africa. Overall profit attributable to DP World's owners was $265 million in the six months to June 30, down from $651 million a year earlier, the company said, adding that its operations had been "partially impacted" by Red Sea disruptions. Revenue rose 3.3% to $9.34 billion, driven by the company's logistics as well as ports and terminals divisions, with consolidated container volumes up 3.7% on a like-for-like basis. DP World, which manages ports from Britain to Peru, also operates warehousing and logistics parks. Revenue from the company's logistics business fell 2%, while marine services saw a half-year revenue decline of 4.1%. In the Middle East, Africa and Europe, DP World recorded a 1.9% like-for-like decline in container volumes, while profit from the region fell 7%. The state-owned conglomerate said volumes rose at the flagship Jebel Ali port in Dubai, but it did not disclose volumes for other Middle East ports such as Jeddah. The company's overall adjusted core profit fell by 4.3% to about $2.5 billion for the six months due to the crisis and investments to expand its logistics platform, but DP World said it expects an improved performance for the second half of the year. Sign up here. https://www.reuters.com/world/middle-east/dp-world-profit-more-than-halves-first-half-amid-middle-east-tensions-2024-08-15/

2024-08-15 10:08

A look at the day ahead in U.S. and global markets from Mike Dolan With the inflation picture under control and market volatility back in its box, summer trading doldrums may well resume as long as the U.S. retail picture holds up later on Thursday. The extraordinary round-trip for Wall Street's VIX volatility gauge (.VIX) , opens new tab was more or less complete on Wednesday as a benign U.S. consumer price report underscored bets the Federal Reserve will start easing next month - even if that is more likely just a quarter point rate cut rather than a half. The VIX closed at just 16.2 on Wednesday, taking just seven trading days to return below its historic median after Aug 5's blistering 38.6 finish. To put the speed of that about-face in context, historically it has taken 170 sessions on average for the index to return below median after any close above 35. And that puts the early August episode more in line with the brief "volmageddon" flurry in early 2018 than any more durable and pernicious disturbances. All of which puts markets back on a more fundamental footing -- and that remains reasonably sound still ahead of another screed of U.S. economic updates later on Thursday. The CPI and preceding producer price report this week both give the Fed a green light to start cutting rates next month, with any longer-term signals from its annual Jackson Hole symposium next week now on the radar. Although readouts on rent remain irksome - with some arguing a Fed rate cut may actually help resolve that - three-month annualised CPI on a headline and core basis is now running well below the Fed's 2% target. CHINA PROPERTY SECTOR While futures have baked in a quarter-point cut for September, there is now just a one-in-three chance the Fed will opt for a 50 basis point move. But 100bps of easing remains in the curve by year-end and almost 200bps through next June. Atlanta Fed President Raphael Bostic told Thursday's Financial Times he was open to an rate cut in September and added the Fed could not "afford to be late" to ease policy. Even though they ticked up a notch on Thursday, Treasury yields are subdued and the two-year is still below 4%. And after the S&P500's (.SPX) , opens new tab best close of the month so far on Wednesday, futures on the main stock indexes , are higher again ahead of the open. The dollar (.DXY) , opens new tab remains on the back foot, although the euro has recoiled from 2024 highs above $1.10 as still-unnerving Chinese economic updates jar in Europe too. While Chinese industrial and retail reports for July were mostly a mixed bag, the elephant in the room remains the ailing housing sector and Thursday's data showed China's new home prices fell at the fastest pace in nine years in July. With 70% of Chinese household wealth held in real estate, a sector that at its peak accounted for a quarter of the economy, consumers have kept their wallets shut tight as property values deflate. Propping up Chinese stocks (.CSI300) , opens new tab from six-month lows on Thursday was the hope that the latest economic news would increase the chance of further monetary easing, and the offshore yuan fell back. The central bank injected cash through a short-term bond instrument and said it would roll over its medium-term lending facility later this month as it extends liquidity support. By contrast, Japan's economy expanded by a much faster-than-expected annualised 3.1% in the second quarter, rebounding from a slump at the start of the year and backing the case for another near-term rate hike. In Europe, sterling nudged higher after solid British GDP data for the second quarter. Globally, however, economic surprise indexes are running at their most negative in more than two years. Switching back to the day's diary on Wall Street, the heavy economic data schedule probably gets topped with by the July retail sales report and the still highly sensitive weekly jobless readout. WalMart (WMT.N) , opens new tab adds corporate flavour to the national retail aggregate with its quarterly earnings. Dow component Home Depot (HD.N) , opens new tab warned of a decline in annual profit and a bigger drop in its annual sales earlier this week as weak discretionary spending dampened expectations. But its shares help up nonetheless. In deals news, Kellanova (K.N) , opens new tab surged 7.8% on Wednesday after family owned candy giant Mars said it would buy the Cheez-It and Pringles maker in a nearly $36 billion deal. Key developments that should provide more direction to U.S. markets later on Thursday: * U.S. weekly jobless claims, July retail sales and industrial production, August NAHB housing market index, Philadelphia Fed's Aug business survey, NY Fed's Aug manufacturing survey, June TIC data on Treasury flows * St. Louis Federal Reserve President Alberto Musalem and Philadelphia Fed President Patrick Harker both speak * U.S. corporate earnings: Walmart, Amcor, Applied Materials, Deere, Tapestry etc * U.S. Treasury sells 4-week bills Sign up here. https://www.reuters.com/markets/us/global-markets-view-usa-pix-2024-08-15/

2024-08-15 09:53

LONDON, Aug 15 (Reuters) - The Bank of England allotted a record 34.292 billion pounds ($44.1 billion) in seven-day funds in its weekly short-term repo on Thursday, up from 27.464 billion pounds last week and a previous record of 34.015 billion pounds set on Aug. 1. ($1 = 0.7783 pounds) Sign up here. https://www.reuters.com/markets/europe/bank-england-allots-record-343-billion-pounds-short-term-repo-2024-08-15/

2024-08-15 08:41

LONDON, Aug 15 (Reuters) - British workers produced 0.1% less per hour worked in the three months to June, compared with their output a year earlier, the Office for National Statistics said on Thursday. Output per hour worked was 2.1% higher than its average in 2019, the ONS added. Sign up here. https://www.reuters.com/world/uk/uk-productivity-01-lower-than-year-earlier-ons-says-2024-08-15/

2024-08-15 07:11

JOHANNESBURG, Aug 15 (Reuters) - South Africa's rand was not deterred by dollar gains on Thursday, firming after stronger-than-expected U.S. economic data and as markets look toward Federal Reserve comments at a meeting of global central bankers next week, analysts said. At 1535 GMT, the rand traded at 18.00 against the dollar , about 0.4% firmer than its previous close. The dollar rose against a basket of global currencies on Thursday after U.S. economic data eased fears of a recession risk and dampened expectations for aggressive interest rate cuts in the world's biggest economy. "Despite the dollar firming across the board against most major currencies... EM (emerging market) currencies have still been able to grind out gains," said Wichard Cilliers, head of market risk at TreasuryONE. "Tomorrow's data calendar has little to be wary of, and markets are likely waiting for FOMC comments at the Jackson Hole symposium later this month," Cilliers added. Like other risk-sensitive currencies, the rand often takes cues from global drivers like U.S. economic data and monetary policy, in addition to local data points. On the Johannesburg Stock Exchange, the blue-chip Top-40 index (.JTOPI) , opens new tab closed up over 1%. South Africa's benchmark 2030 government bond was weaker, as the yield gained 9.5 basis points to 9.23%. Sign up here. https://www.reuters.com/markets/currencies/south-african-rand-pauses-after-modest-gains-us-data-2024-08-15/

2024-08-15 06:59

Q2 EBITDA up 59%, beats expectations Books impairments of U.S. project delay Keeps full-year profit forecast, says will lower investments Shares end down 7% COPENHAGEN, Aug 15 (Reuters) - Renewable energy group Orsted (ORSTED.CO) , opens new tab booked 3.9 billion Danish crowns ($575 million) in impairment losses in the second quarter, due partly to a delay in construction of a major U.S. offshore wind project, sending its shares down as much as 9% on Thursday. The world's biggest offshore wind developer pushed back the start of commercial operations at its 704 megawatt (MW) Revolution Wind project off Rhode Island and Connecticut to 2026 from 2025, it said in its quarterly results statement. The announcement was the latest blow to the fledgling U.S. offshore wind industry, which is a major part of President Joe Biden's climate change agenda but has been struggling with soaring costs. In the last month alone, U.S. officials have cancelled a planned Gulf of Mexico offshore wind auction due to lacklustre industry demand, and construction on the nation's first major project was halted due to a shattered turbine blade that sent pieces of fiberglass washing up on nearby beaches. Orsted's impairment losses also related to its Ocean Wind project in the United States whose development it halted last year, an increase in U.S. interest rates, and its decision to cease development of its green e-methanol FlagshipOne project, which was due to open in Sweden next year. Shares in Orsted, once a green investor favourite, ended down 7.2%, having fallen as much as 9.3% earlier. They remain at less than one-third of their value since peaking in early 2021. The company last year found itself at the centre of a perfect storm of rising inflation, higher interest rates and supply chain delays, forcing it to cancel offshore projects in the United States, and related impairments surged above $4 billion. In February, it trimmed its investment and capacity targets and paused dividend payouts following a strategic review of its business. 'FRUSTRATING AND UNSATISFACTORY' The delay at Revolution Wind, which Orsted is developing in partnership with Eversource Energy (ES.N) , opens new tab, was due to soil contamination at an onshore transformer station. The onshore facilities are being developed on the site of a naval air station that was decomissioned in the 1970s. The land includes buried waste from the demolished former facility, according to project planning documents filed with the federal government. "This is not supply chain related. It is related to a specific challenge, which of course is frustrating and unsatisfactory," CEO Mads Nipper told journalists on a call, adding that offshore installation was going according to plan. Impairment losses related to the project alone amounted to 2.1 billion crowns. Still, the company beat analyst expectations with a 59% rise in second-quarter profit before interest, tax, depreciation and amortisation and excluding new partnerships of 5.27 billion Danish crowns. That topped an average forecast of 4.41 billion crowns in a poll of analysts provided by Orsted. Orsted kept its full-year profit forecast unchanged, but said it would lower investments this year. Orsted said it halted FlagshipOne, which was the largest e-methanol project under construction in Europe, because the green fuels market was developing slower than expected. "We have decided to de-prioritize our green fuels business and focus our efforts on renewable hydrogen in northern Europe which is closer to our strategic core," Nipper said. ($1 = 6.7768 Danish crowns) Sign up here. https://www.reuters.com/business/energy/orsted-posts-q2-profits-above-expectations-keeps-guidance-unchanged-2024-08-15/