2024-08-13 20:31
US producer prices rise less than expected in July Starbucks posts biggest one-day percentage gain after naming new CEO BuzzFeed jumps on smaller second-quarter loss Indexes up: S&P 1.68%, Nasdaq 2.43%, Dow 1.04% Aug 13 (Reuters) - U.S. indexes closed up on Tuesday and hit a near two-week high after softer producer prices data reinforced bets of an interest-rate cut by the Federal Reserve in September. U.S. producer prices increased less than expected in July as a rise in the cost of goods was tempered by cheaper services, indicating that inflation continued to moderate. In the 12 months through July, the PPI increased 2.2% after climbing 2.7% in June. Investors now await all-important consumer-price figures for July on Wednesday and retail sales data on Thursday to firm bets on an aggressive rate cut by the U.S. central bank. “The core PPI number furthers the narrative that the Fed has done an excellent job of keeping inflation relatively under control and that the more likely move is going to be a rate cut sooner rather than later,” said Michael James, managing director of equity trading at Wedbush Securities. “You have the CPI print tomorrow morning. Any data point is going to have an outsized influence on the market because people are so jittery right now.” Traders now see a 55% chance of a 50-basis-point rate cut by the U.S. central bank, from less than 50% before the report, according to CME's FedWatch Tool. Stocks wobbled on Monday with the S&P 500 (.SPX) , opens new tab nearly flat and the Nasdaq (.IXIC) , opens new tab eking out modest gains, following a turbulent week marked by mixed economic reports and a rate hike by Japan's central bank. The S&P 500 (.SPX) , opens new tab gained 90.04 points, or 1.68%, to end at 5,434.43 points, while the Nasdaq Composite (.IXIC) , opens new tab gained 407.00 points, or 2.43%, to 17,187.61. The Dow Jones Industrial Average (.DJI) , opens new tab rose 408.63 points, or 1.04%, to 39,765.64. Information technology (.SPLRCT) , opens new tab and consumer discretionary (.SPLRCD) , opens new tab were the top sector performers. Energy shares (.SPNY) , opens new tab dipped on lower oil prices as OPEC's move to cut its forecast for demand growth in 2024 tempered fears of supply risks posed by widening conflict in the Middle East. The Russell 2000 Index (.RUT) , opens new tab, focused on small companies, rose 1.6%. Starbucks (SBUX.O) , opens new tab was the top performer on the S&P 500, jumping 24.5%, its biggest one-day percentage gain ever, after the coffee seller appointed Chipotle Mexican Grill's (CMG.N) , opens new tab head Brian Niccol as chairman and CEO. Chipotle shares fell 7.5%. Home Depot (HD.N) , opens new tab reversed losses and climbed 1.2%. The home-improvement chain forecast a decline in annual profit and a bigger drop in its annual comparable sales. BuzzFeed (BZFD.O) , opens new tab jumped 25.9% after the digital media company narrowed its net loss in the second quarter to $6.6 million from $22.5 million a year earlier. Advancing issues outnumbered decliners by a 4.36-to-1 ratio on the NYSE. On the Nasdaq, advancing issues outnumbered decliners by a 2.59-to-1 ratio. The S&P 500 posted 17 new 52-week highs and three new lows while the Nasdaq Composite recorded 55 new highs and 128 new lows. Sign up here. https://www.reuters.com/world/us/futures-rise-ppi-set-kick-off-data-deluge-2024-08-13/
2024-08-13 20:21
WASHINGTON, Aug 13 (Reuters) - John Podesta, the White House's senior adviser for international climate policy, touted the benefits on Tuesday for Republican states and districts of incentives offered by the Biden administration's signature climate law, the Inflation Reduction Act. Podesta said in a speech in Washington he was confident that the law, which provides billions of dollars in tax credits to help consumers buy electric vehicles and companies produce renewable energy, could continue to succeed if Republicans take control of the White House and Congress in the November elections. U.S. House Republicans have attempted to repeal part or all of the law 42 times, Podesta said, despite the majority of its jobs being created in congressional districts represented by Republicans. "Understandably, people are asking if that investment can really stick regardless of who is in power here in Washington. My answer to the question of whether the Inflation Reduction Act has staying power is 'yes,'" Podesta said at an event hosted by think-tank Third Way. He said despite no Republicans voting for the IRA when it passed in 2022, districts and states led by those lawmakers accounted for 58% of new jobs created due to investments from the law, according to advocacy group Climate Power. Podesta mentioned several states such as Oklahoma and South Carolina where Republican politicians have publicly celebrated in-state investments that emerged as a result of IRA tax incentives. He referred to a letter by House Republicans who have urged party leadership to protect IRA provisions. The letter to House Speaker Michael Johnson this month by 18 Republican representatives urged him against revoking all of the IRA if the party wins control of the House and Senate. "A full repeal would create a worst-case scenario where we would have spent billions of taxpayer dollars and received next to nothing in return,” the letter said. Podesta told the event that more than 90% of IRA funding available this fiscal year has been awarded and that he has been meeting with cabinet secretaries to ensure the money is distributed by year-end. He said the Treasury Department aims to complete its final guidance for the IRA's hydrogen tax credit, as well as guidance for existing nuclear power plants by the end of the year. Sign up here. https://www.reuters.com/world/us/white-house-climate-adviser-touts-key-laws-benefits-red-states-2024-08-13/
2024-08-13 19:31
NEW YORK, Aug 13 (Reuters) - The World Bank issued a $225 million, principal-protected nine-year bond linked to reforestation in the Amazon, the global lender said on Tuesday, calling it the biggest outcome bond it has ever priced. The 2033 bond offers investors a return linked to the creation of carbon removal units from reforestation initiatives in Brazil's Amazon rainforest, said the bank. The World Bank said this issuance marks the first bond to link investors' financial returns to carbon removal, a departure from previous deals tied to the sale of carbon credits from avoided emissions. Close to $36 million will be directed to support the reforestation activities of Mombak, a Brazilian company working with local landowners to replant native tree species in the Amazon. Separately, Microsoft (MSFT.O) , opens new tab agreed to purchase the carbon removal units. The bond is 100% principal-protected, with the $225 million proceeds used to back the World Bank's sustainable development initiatives worldwide, the lender said. The issue has a minimum guaranteed annual return of about 1.745%, and up to 4.362% if the projects perform as expected, according to the World Bank. "As demonstrated by the historic level of participation in today's transaction, private investors are eager to connect their financial return to positive development outcomes in the Amazon region," said Jorge Familiar, vice president and treasurer at the World Bank. "With this largest ever outcome bond we continue to be encouraged by the growing interest in the structure as well as the expanded list of sectors supported." The bond, issued by the International Bank for Reconstruction and Development, was priced at par and will mature on July 31, 2033. Settlement is scheduled for Aug. 20. Sign up here. https://www.reuters.com/sustainability/sustainable-finance-reporting/world-bank-prices-225-million-bond-linked-amazon-reforestation-2024-08-13/
2024-08-13 19:18
SANTIAGO, Aug 13 (Reuters) - Mining giant BHP (BHP.AX) , opens new tab said on Tuesday it had started removing workers on strike at its Escondida copper mine in Chile, deepening tensions at the site after a powerful union rejected the company's latest invitation for talks on pay. The strike at the world's largest copper mine was declared hours earlier after negotiations collapsed and could lead to a major hit to production. "After a new invitation from the company to reach an agreement, Union No. 1 declined to restart talks," BHP said in a statement, referring to the labor group that represents about 2,400 people. Escondida, which produced 1.1 million metric tons of copper last year, said the mine was continuing to operate but did not specify how much operations had been scaled down. BHP said it began removing striking workers when it activated a contingency plan that allows for "minimum services" and for non-union members to keep working. Mines typically have plans to reduce operations without affecting facilities or equipment. Workers walked out as they demanded a bigger slice of copper profits, which have been buoyed by recent high prices. The union maintains it is willing to return to negotiations, and accused BHP of violating strike terms by replacing workers who walked out, who it said were essential to basic operations. "We demand the company immediately end this grave anti-union practice," the union said in a statement. The strike, after the union encouraged members to reject BHP's offer, has stirred up memories of the last major Escondida walkout in 2017, which hit BHP's copper production and pushed up global prices of the metal, which is used to make wiring and nearly every single electronic device. Analysts said the market was so far staying calm, with hopes for a quick resolution and weaker demand from top copper consumer China dampening the impact. BHP's U.S.-listed shares edged down and copper futures were stable. "The market is taking it in its stride," said Chris LaFemina, a metals and mining analyst at Jefferies, though he flagged the potential for the strike to encourage other labor disputes in Chile. "If you get a series of mine disruptions, that can have an impact on the market." London-listed shares of BHP and copper prices each fell less than 1% on Tuesday. Workers from one of three unions at Lundin Mining's (LUN.TO) , opens new tab Caserones copper mine in Chile also went on strike on Tuesday over failed pay negotiations. While the Escondida strike is unlikely to affect Caserones, the outcome could influence future negotiations at other mines, said Benchmark Mineral Intelligence, a UK-based provider of critical minerals pricing and data. They also noted that Escondida processes 400,000 tons of ore a day, a pipeline that could be disrupted shortly after workers walk out. BHP offered a $28,900 bonus per worker, compared with the union's demand of 1% of shareholder dividends for the mine, which would amount to roughly $36,000. "We made every responsible effort to reach an agreement, but that wasn't possible," the union said in a statement ahead of the strike's start at 8 a.m. (1200 GMT). FOUR PROPOSALS BHP defended its contract as one of the best in the industry, and said it had offered four proposals in response to points raised by the union. The labor group "on the last day of mediation presented new requirements," BHP said in a statement. BHP, one of the world's biggest miners, owns more than half of Escondida in northern Chile, along with Rio Tinto (RIO.L) , opens new tab and JECO Corp. Rio Tinto declined to comment. Representatives for Mitsubishi, the controlling shareholder in JECO, were not immediately available. Some 60% to 70% of Escondida's copper concentrates are shipped to China, a source with knowledge of the matter said. A cutoff of Escondida concentrates could hit supply chains of Chinese smelters, which produce half the world's refined copper. Union President Patricio Tapia told Reuters previously that a strike would see BHP unable to produce copper, because replacement workers are prohibited by law. Along with seeking higher pay, the union, which has repeatedly clashed with BHP, is pressing for better conditions for workers who lose their jobs due to outsourcing and automation as well as health benefits, bonuses and more. Sign up here. https://www.reuters.com/markets/commodities/workers-bhps-escondida-copper-mine-will-strike-after-failing-reach-agreement-2024-08-13/
2024-08-13 19:00
SAN JUAN, Puerto Rico, Aug 13 (Reuters) - Tropical Storm Ernesto threatened on Tuesday to bring heavy rainfall, dangerous storm surges and strong winds to the U.S. and British Virgin Islands and Puerto Rico, leading the U.S. territory to close schools and prepare for power outages. Hurricane conditions were possible as the storm passes over or near the Virgin Islands, Culebra and Vieques on Tuesday evening on a route that would likely bring it just northeast of Puerto Rico, the National Hurricane Center said. It was packing sustained winds of 65 mph (105 kphour) as of Tuesday night, when it was centered 60 miles (96 kilometers) east-northeast of San Juan and moving to the northwest at 17 mph (28 kph). A storm is considered a hurricane when its sustained winds reach 74 mph (119 kph), which could come early Wednesday morning. President Joe Biden late Tuesday approved an emergency declaration for Puerto Rico, which facilitates federal support for the island in any recovery. Ernesto will strengthen further after passing over Puerto Rico and veering north into the Atlantic, the hurricane center said. Later it is expected to buffet Bermuda, but the center said it was too early to forecast the impact it would have on that British island territory. "We anticipate a rapid intensification ... over the next 12 hours to potential Category I hurricane," said Daryl Jaschen, director of the U.S. Virgin Islands Emergency Management Agency, during a briefing. He said the territory could get up to 8 inches (20 cm) of rain. Airports and seaports were closed on Tuesday afternoon, Jaschen said. Schools will also remain closed through Wednesday. Ernesto is the second named Atlantic storm in a week. Slow-moving Debby hit Florida's Gulf Coast as a Category 1 hurricane last week before soaking some parts of the Carolinas with up to 2 feet (0.6 meter) of rain. LUMA Energy, the private operator of Puerto Rico's transmission and distribution system, said on X it had activated its emergency operations, mobilized crews ahead of the storm, and advised residents to brace for power outages. The company said on its website that just after 10 p.m., nearly 11,300 clients were without power. Joseph Niskar, a lawyer who moved to Puerto Rico from Michigan after Hurricane Maria struck the island in 2017, said he was preparing for extended periods without water or electricity. "I bought a generator big enough to run my refrigerator and fans to keep cool, but will need gasoline that can be hard to get because a lot of people wait until the last minute and there can be long lines," Niskar said. Like Debby, Ernesto's greatest threat is torrential rain, which could spur flash floods and landslides, especially in the mountainous interior of Puerto Rico and nearby Caribbean islands. Total rainfall in some spots in Puerto Rico could reach up to 10 inches (25 cm), the NHC said. Storm surges could bring water levels as much as 3 feet (1 meter) above ground level on Puerto Rico's eastern coast and in the Virgin Islands. On Monday, Puerto Rico Governor Pedro Pierluisi activated more than 200 National Guard members and expedited food benefits for families ahead of the storm's arrival. Government workers were given the day off, with the exception of essential personnel. Officials also postponed the first day of school from Tuesday to later in the week. Puerto Rico, with its fragile power grid, has a history of highly destructive storms. In 2022, Hurricane Fiona knocked out power for about 80% of the island's 1.5 million homes and businesses for as long as a month. Since Fiona, Congress has approved $1 billion in funds to modernize and stabilize the grid in Puerto Rico. Five years earlier, Hurricanes Irma and Maria destroyed the island's power grid and caused outages in some areas that lasted nearly a year. Sign up here. https://www.reuters.com/business/environment/tropical-storm-ernesto-threatens-drench-puerto-rico-power-outages-possible-2024-08-13/
2024-08-13 18:39
NEW YORK, Aug 13 (Reuters) - Talen Energy (TLN.O) , opens new tab is focused on capturing surging demand from data center developers as the independent power company looks to pivot away from its crypto mining operation, company executives said on Tuesday. Talen is among a group of U.S. electric companies benefiting from the power needs of artificial intelligence and cloud computing data centers, with shares of Talen up nearly 100% since the start of the year. "It's not a strategic asset for us and we are looking at... other alternatives," Talen Energy Chief Executive Officer Mark McFarland said of the crypto mining business on a second-quarter earnings call. Reuters reported earlier this month that Talen was looking to sell its stake in a bitcoin mining center at the site of a Pennsylvania nuclear power plant Talen raised its earnings and free cash flow forecasts for the year as it benefits from higher power use and prices, bigger payments from regional grid operator PJM Interconnection and a payout for a data center sold to Amazon.com (AMZN.O) , opens new tab early this year. Talen revised up its adjusted EBITDA range for 2024 to $720 million to $780 million, from $600 million to $800 million previously. Its free cash flow estimate for the year was revised to $245 million to $285 million, from $160 million to $310 million previously. The company benefited from unseasonably warm weather in the three months ended on June 30, among other factors. Talen expects to receive $670 million from capacity revenues for the 2025/2026 planning year, or $470 million more than the previous year, following a capacity auction in the PJM market. Talen also plans on $300 million of Amazon data center campus escrow to be released in the third quarter. The data center is at the center of a battle between Talen and regulated electric utilities, American Electric Power and Exelon, which say the build-out to connect the center could raise costs for everyday power customers. The Federal Energy Regulatory Commission (FERC) is reviewing the amended interconnection service agreement for the center, and will hold a technical conference this fall more broadly on what are known as co-located data centers, in which data centers are located at the power plant sites that fuel them. McFarland said he was optimistic that FERC would approve the amended agreement. Sign up here. https://www.reuters.com/business/energy/talen-focused-data-center-demand-it-considers-axing-crypto-business-2024-08-13/
