2024-08-13 10:09
A look at the day ahead in U.S. and global markets from Mike Dolan Much like Wall Street's rapid healing on Friday, Japanese stocks completed their week-long, hair-raising round trip on Tuesday as Tokyo markets returned from holiday, wiped out the remainder of last week's losses and nudged the yen lower. The 3.5% surge in the Nikkei 225 (.N225) , opens new tab - a source of much of last week's wild volatility - brought it back above the close on Friday Aug 2. The post-mortems now get underway. Japan's parliament plans a special session on Aug. 23 to discuss the Bank of Japan's decision last month to raise interest rates for the second time and signal more to come. But the renewed calm on world markets was evident in Monday's modest moves in U.S. trading too. The VIX 'fear index' (.VIX) , opens new tab is now back close to its 30-year mean just under 20 - levels likely more sustainable than the pressure cooker readings so far this year and ones which should work against the reflating of the sort of speculative bubbles that burst last week. Attention now shifts back to the U.S. inflation picture and whether this week's consumer and producer price updates give a green light to the Fed to start easing next month. The PPI is first out of the traps today, with subdued 0.2% monthly gains expected for both headline and core measures and a retreat in annual headline factory gate inflation to just 2.3%. As always, key components of the PPI basket that feed directly to the Fed's favored PCE gauge - healthcare, airfares and fund management fees - will be watched closely. But whatever the outcome, the Fed will be reasonably pleased that it appears to have anchored inflation expectations again and this alone may be enough to allow it to start cutting rates in September. U.S. consumers' medium-term inflation expectations eased substantially in July, with the New York Fed's monthly household survey showing the median three-year view dropping 0.6 percentage point to 2.3% - the lowest reading in the 11 year history of the survey. Financial markets tend to agree, with 10-year 'breakeven' inflation readings from inflation-protected Treasuries hovering just above 2.1% after hitting 3-1/2 year lows near 2% last week. A regular fly in the ointment could be energy prices, with crude prices perking up to three-week highs just under $80 per barrel amid trepidation in the Middle East about possible Iranian retaliation. But the move in crude is modest so far in context, with the year-on-year oil price still negative to the tune of more than 3%. The upshot ahead of today's bell is that Treasury yields , the dollar index (.DXY) , opens new tab and U.S. stock futures , are all marginally higher. Home Depot tops the earnings calendar, in a week that sees big retailers update alongside the July retail sales report. Overseas, sterling rose as Britain's unemployment rate unexpectedly fell in June. But the Bank of England will likely be encouraged by accompanying numbers that showed regular wage growth ebbing to its lowest in two years. The euro was a touch lower too after Germany's ZEW sentiment index for August fell much more than forecast - likely hampered by the market volatility last week. In China, economic and credit worries persisted. Chinese banks extended 260 billion yuan ($36.26 billion) in new yuan loans in July, down from the previous month and undershooting analysts' forecasts - highlighting weak demand as a prolonged property downturn and job insecurity drag on business and consumer confidence. Key developments that should provide more direction to U.S. markets later on Tuesday: * US NFIB July small business survey, July producer price index * Atlanta Federal Reserve President Raphael Bostic speaks * US corporate earnings: Home Depot, XP, Telesat, Kimball Electronics etc Sign up here. https://www.reuters.com/markets/us/global-markets-view-usa-2024-08-13/
2024-08-13 07:45
Aug 13 (Reuters) - South African petrochemicals company Sasol (SOLJ.J) , opens new tab has promoted Walt Bruns to chief financial officer, it said on Tuesday, replacing Hanre Rossouw from the start of next month. Sasol said Rossouw resigned to pursue a different career opportunity after two years with the company. He leaves on Aug. 31. Bruns, who is currently finance chief of Sasol's southern African operations, steps up at a challenging time for the company, which delivered a profit warning on Monday after weaker prices prompted heavy writedowns on the carrying value of its chemicals and fuel assets. Sasol, which produces chemicals and synthetic fuels from coal, said it will report a basic loss per share of between 68.82 rand and 71.48 rand for the year to June 30, compared with basic earnings per share of 14 rand the previous year. The company's shares opened with a 1% decline on the Johannesburg Stock Exchange and have slid by 31% since the start of the year. Sign up here. https://www.reuters.com/business/energy/sasol-names-insider-walt-bruns-new-cfo-2024-08-13/
2024-08-13 07:39
FTSE 100 up 0.35, FTSE 250 adds 0.1% Pharma and biotech, industrial support stocks lead gains Dowlais Group explores unit sale, cuts annual forecast, shares fall Aug 13 (Reuters) - London's FTSE 100 inched higher on Tuesday amid broader gains in the run-up to crucial inflation numbers in the United States and the UK, while cart parts supplier Dowlais Group lagged the mid-caps. The blue-chip FTSE 100 index (.FTSE) , opens new tab was up 0.3%, while the mid-cap FTSE 250 index (.FTMC) , opens new tab added 0.1% by 0712 GMT. The indexes were set to extend their rally for a third consecutive session after closing lower for a second straight week on Friday. Pharma and biotech (.FTNMX201030) , opens new tab and industrial support services (.FTNMX502050) , opens new tab led broader gains in London with a 0.7% rise each. Most sectors trended upwards, while automobile and parts (.FTNMX401010) , opens new tab lead declines, pulled down by a 10.2% fall in Dowlais Group (DWL.L) , opens new tab. The company sank to the bottom of the FTSE 250 after it said it was exploring a potential sale of its GKN Powder Metallurgy unit, among other options, and cut its annual revenue forecast. The sectoral index fell to its lowest level since early 2009. Industrial metal miners (.FTNMX551020) , opens new tab dipped 0.5% on easing copper prices as investors turned to profit-taking. Meanwhile, data out of the UK showed a slowdown in average earnings growth and an unexpected fall in the unemployment rate, pushing the pound up against the dollar. "The further easing in wage growth will be welcomed by the BoE as a sign that labour market conditions are continuing to cool, but we think it will pause in September," said Ruth Gregory, deputy chief UK economist at Capital Economics in a note. Investor focus has returned to a slew of economic data this week in the U.S. and at home, after weak data stoked recessionary fears in the U.S. and had, in part, triggered an equity sell-off last week. Among other stocks, Just Group (JUSTJ.L) , opens new tab surged 10% to top the FTSE 250 after it said it expected to exceed its previous 2024 profit forecast after its first-half earnings surpassed market expectations. Sign up here. https://www.reuters.com/markets/europe/londons-ftse-100-set-extend-rally-third-session-dowlais-group-falters-2024-08-13/
2024-08-13 06:57
Greece's worst wildfire of year fades after reaching Athens Around 10,000 hectares of land estimated burned One woman dies, government announces relief measures ATHENS, Aug 13 (Reuters) - Greece's worst wildfire of the year eased on the outskirts of the capital Athens on Tuesday thanks to weaker winds, pausing progress of a destructive blaze that killed one person and torched cars, buildings, fields and forests. Hundreds of firefighters backed by 10 waterbombing aircraft battled the blaze since Sunday as it barrelled from a forest into Athens' northern suburbs, torching homes and stirring panic in neighbourhoods that had not seen such a fire so close to the centre in decades. "The situation has improved, but there are random blazes. At the time being we don't have any new fronts, only some rekindlings, but we remain on high alert," said a fire brigade official. The government has announced compensation and relief measures for victims of a fire that Greece's National Observatory said had damaged around 10,000 hectares of land. Prime Minister Kyriakos Mitsotakis was expected to chair a ministerial meeting about the fire on Tuesday evening. As the smoke-filled skies cleared above Athens, firefighting aircraft arrived from France and Italy as part of a European civil protection mechanism, a government official said. The Czech Republic sent 75 firefighters and 25 engines to assist ground teams. The blaze on Monday reached the suburb of Vrilissia, about 14 km (8 miles) from central Athens, where a 64-year-woman was found dead inside a local business, witnesses said. The cause of the wildfire was not yet determined. With high winds expected to pick up again, Greece will remain on high fire alert until Thursday, with temperatures forecast up to 40 degrees Celsius (104 degrees Fahrenheit). SUMMER CYCLE Wildfires have been a common feature of Greek summers for years: its deadliest blaze killed 104 people in the seaside town of Mati in 2018. But climate change has brought hotter weather and less rain, heightening the risk. Greece had its warmest winter on record this year and was on track for its hottest summer with scant rain in many areas. "The wildfire had all the characteristics that we, as firefighters, don't want a forest fire to have. A combination of hot, dry and windy (conditions)," Nikos Lavranos, head of the Greek federation of fire service employees, told Greek TV. "It was extremely aggressive, difficult to manage and unpredictable," he said. Blazes have broken out across southern Europe this summer, including in Spain and the Balkans. Residents and firefighters returned to some areas of Athens on Tuesday to assess the damage - kitchens and living rooms blackened by fire, ceilings caved in, cars reduced to sooty frames. "My house was utterly destroyed, even the walls fell down. There's nothing left," said Sakis Morfis, 70. "The only thing I cared about was saving my dogs, so I left everything (else) behind." More than 30 areas evacuated, along with at least three hospitals, with power cuts in parts of the wider Athens region. Measures announced by the climate crisis and civil protection ministry on Tuesday include rent subsidies, a three-year property tax exemption, and financial aid. Opposition parties accused the government of not doing enough to prevent the disaster. Sign up here. https://www.reuters.com/world/europe/one-dead-greek-wildfire-burns-athens-suburbs-2024-08-13/
2024-08-13 06:38
Aug 13 (Reuters) - German chemicals distributor Brenntag (BNRGn.DE) , opens new tab cut its outlook for 2024 late on Monday and said it expected markets to remain highly competitive, with sustained pressure on the selling prices of industrial chemicals. "The overall trends and chemical industry expectations observed recently make us more cautious for the remainder of the year. We expect a less supportive volume development and sustained price pressure in industrial chemicals," CEO Christian Kohlpaintner said in a statement. The energy-intensive chemical sector has faced an unprecedented drop in order volumes as customers reduced stocks in a high inflationary environment that dampens the demand. Brenntag's shares were down 1.8% at 0631 GMT in early Frankfurt trade, the worst performer on Germany's blue chip index (.GDAXI) , opens new tab. The group forecast operating earnings before interest, tax and amortisation (EBITA) of between 1.10 billion and 1.20 billion euros ($1.20 billion and 1.31 billion) for the full year. It had previously expected them at the lower end of its original 1.23-1.43 billion euro range. Analysts were expecting it to reach an operating EBITA of 1.18 billion euros this year, a poll by Vara Research showed. Brenntag still beat expectations for second quarter core profit on Tuesday, citing pricing initiatives without providing details. Its operating EBITA fell 10.6% to 297.1 million euros in the April-June quarter, mainly due to volume-driven increases in transport costs. That was above analysts' forecast of 289.8 million. In March, Brenntag said the Red Sea crisis had added extra two to three weeks to travelling times of its containers out of Asia-Pacific and caused freight costs to more than double. The company said on Tuesday it would accelerate and expand its cost cutting efforts in the second half of the year. "The cost measures announced at our Capital Markets Day are on track and we will continue to focus on our cost development with strict discipline," finance chief Kristin Neumann said in a statement. ($1 = 0.9142 euros) Sign up here. https://www.reuters.com/markets/commodities/brenntag-beats-profit-expectations-q2-trims-outlook-2024-08-13/
2024-08-13 06:32
U.S. CPI data due on Wednesday Spot gold prices rose 1.7% on Monday Tensions in the Middle East provide support Gold ETFs have seen 3 consecutive months of inflows LONDON, Aug 13 (Reuters) - Gold prices fell on Tuesday as investors locked in profits after the metal closed at an all-time high in the previous session and ahead of key U.S. inflation data that could influence bets around the Federal Reserve's monetary policy path. Spot gold was down 0.3% at $2,465.42 per ounce by 1201 GMT. Prices on Monday rose 1.7% to $2,472, a record high for the closing price. Non-yielding gold is up 19% so far this year after spot prices touched a record high of $2,483.60 on July 17 on improved market confidence that the Fed would cut interest rates in September. "There is for sure some taking money off the table as we got close to $2,480. If the selling does not go below $2,430, then we have a solid base to try $2,500 as volatility in the geopolitical spectrum is still quite high," a trader said. Fears that the conflict in Gaza could turn into a broader Middle East war have escalated after the killing of Hamas leader Ismail Haniyeh in Iran last month. Traders are awaiting U.S. July consumer price index (CPI) data, due on Wednesday, and the retail sales data on Thursday. Both sets of the data are a major risk event for gold that are likely to shape expectations around what the Fed does in September, said FXTM senior research analyst Lukman Otunuga. Analysts at ANZ raised their year-end price target for bullion to $2,550 betting that the start of the Fed's cutting cycle would attract strategic investment in gold. With the expected nearing of rate cuts, global physically backed gold exchange-traded funds (ETFs), a crucial category of demand, started purchases again after several years of outflows and so far have seen three consecutive months of inflows. Gold ETFs, storing bullion for investors, saw net inflows of 48.5 metric tons ($3.7 billion) in July, the largest monthly inflow since March 2022, according to the World Gold Council. Meanwhile, retail jewellery demand in China, the world's top consumer, has been muted by high prices. There has also been a pause in gold buying by China's central bank. Among other metals, spot silver fell 0.8% to $27.79 per ounce, platinum lost 0.3% to $933.45 and palladium was down 0.2% at $918.26. Sign up here. https://www.reuters.com/markets/commodities/gold-dips-investors-book-profits-us-inflation-data-focus-2024-08-13/
