2024-08-06 11:12

Aug 6 (Reuters) - Molson Coors (TAP.N) , opens new tab beat Wall Street expectations for second-quarter sales and profit on Tuesday, driven by strong demand for its premium Coors Light and Miller Lite beers in the European and Asian regions. Shares of the beer maker rose 2.7% in premarket trading. Molson Coors, just like Corona beer maker Constellation Brands (STZ.N) , opens new tab, is seeing that customers are more than willing to spend on their favorite beers since they have started to cut back spending on wine and spirits to save dollars. The Europe, Middle East and Africa region along with its Asia-Pacific region saw a 2% increase in volumes during the second quarter while Americas brand volumes fell 7.3% mainly due to lower sales of its premium brands, which became more expensive following attempts to pass on rising costs to customers. The company's second-quarter net sales fell 0.4% to $3.25 billion, compared to analysts' expectations of $3.18 billion, according to LSEG estimates. Molson Coors' underlying profit came in at $1.92 per share, beating estimates of $1.68 apiece. The company continues to expect full-year 2024 net sales to rise in the low single-digit percentage range and underlying profit to grow in the mid-single-digit percentage range. Sign up here. https://www.reuters.com/business/retail-consumer/molson-coors-tops-quarterly-results-strong-beer-demand-europe-asia-2024-08-06/

2024-08-06 11:10

DUBAI, Aug 6 (Reuters) - Saudi Aramco Chief Executive Amin Nasser said on Tuesday he expected oil demand growth of between 1.6 and 2 million barrels per day (bpd) in the second half of this year, adding that fundamentals do not support the current drop in oil prices. Nasser, who heads the world's most profitable oil company, said he expects global oil demand of 104.7 million bpd in 2024 and that some forecasts saw demand of more than 106 million bpd in the second half of the year. Brent crude was trading at about $76.6 on Tuesday, its lowest since January. Traders said selling had been driven by expectations slower economic growth would reduce demand even as supply concerns mount because of tension in the Middle East. "The market in my view is overreacting and the fundamentals do not support the drop in prices that we are witnessing today," Nasser said on an earnings call. "The U.S. is pointed (to) as a concern driving the current reaction that we are seeing in the market. Yet, the amount of finished gasoline supplies in the U.S., a proxy of demand, jumped to 9.4 million barrels a day in May, the highest since 2019." He also said he expected demand in China to increase in the second half of the year to 17.5 million bpd. "I would also add there seems to be continued upward revision of demand by various forecasters and agencies, which makes it difficult to make informed investment decisions as the revisions keep surprising to the upside," Nasser said. Nasser also said he expected governments would replenish strategic crude inventories and that would further contribute to "healthy oil demand for the next few months". He did not specify which ones. Sign up here. https://www.reuters.com/business/energy/aramco-ceo-expects-demand-growth-16-2-mln-bpd-second-half-2024-08-06/

2024-08-06 11:02

BEIJING, Aug 6 (Reuters) - China's eastern Shandong province reported five people were infected with anthrax and a beef cattle farm was shut after an outbreak was discovered in the agricultural province. All of the livestock on the farm were culled, the disease control and prevention centre of Yanggu county in Shandong said in a statement on WeChat. Five farm workers with direct contact with the infected animals were diagnosed with cutaneous anthrax and are undergoing treatment in isolation, it said. "Cutaneous anthrax is a zoonotic infectious disease that is preventable, controllable and treatable, and transmission between humans is rare," the centre wrote. Anthrax is a bacteria found naturally in soil and commonly affects animals that come in contract with spores in contaminated soil, plants, or water. It mostly infects susceptible herbivores, such as cattle, mules, sheep, horses, and donkeys. Anthrax is not contagious and humans can only get infected by ingesting the bacteria. Sign up here. https://www.reuters.com/business/healthcare-pharmaceuticals/china-shuts-cattle-farm-after-anthrax-outbreak-five-human-infections-2024-08-06/

2024-08-06 10:35

NEW YORK, Aug 6 (Reuters) - Investors said the aftershocks of a massive carry trade that has reverberated through global financial markets wasn't done yet, with more unwinding in the days ahead raising the risk of shake-outs to other assets. The Nasdaq Composite (.IXIC) , opens new tab and the S&P 500 (.SPX) , opens new tab trimmed losses by the close on Monday, capping off a brutal three-day selloff while Tokyo markets rebounded from a similar rout in trading on Tuesday. The massive selloffs had come after a higher-than-expected U.S. unemployment rate on Friday sparked worries the U.S. economy was heading for a recession. Concerns about the markets were exacerbated by investors winding down yen-funded trades that had been used to finance the acquisition of stocks for years after a surprise Bank of Japan rate hike last week. The so-called 'carry trade' is commonly used in currency markets where investors borrow money from economies with low interest rates such as Japan or Switzerland, to fund investments in higher-yielding assets - this time stocks - elsewhere. Despite the easing off in selling, investors were worried about more volatility ahead. "We expect the sell-off to continue for maybe a few more days as usually these... trades are pretty large," said Zhe Shen, head of diversifying strategies at TIFF Investment Management. "People said 'wait, we're losing too much money from unwinding. Let's just hold and we'll unwind some more tomorrow." The complete unwind of this yen-funded trade is likely to take days, potentially extending the market rout, Zhe said. "There's tons and tons of yen carry trades that still have to be closed out," said Ulf Lindahl, CEO at institutional investors advisory firm Currency Research Associates. Investors are still scrambling to figure out the size of those trades and how much of the cheap funding was deployed in equities. Calculations made by hedge fund research firm PivotalPath show that hedge fund strategies most affected by a yen rally are global macro quantitative and managed futures, as they have short exposure to the Japanese currency. A spike in the yen this month indicates a loss of between 1.5% and 2.5% in August for those funds' indexes, according to the firm's exposure model. "It's very, very hard to know what the actual size of those positions are and how much is hedged and how much isn't hedged, and therefore how much pressure is on," said Kathy Jones, chief fixed income strategist at Schwab. "When you get hedge funds that are leveraged, and maybe there are derivatives involved, you get a pretty sizable reaction." UNWIND OF RISK Some money managers or trading strategies had already been reducing risk in the past few days. "Momentum certainly has been unwinding quite a bit in the past few days, and that's cutting across all asset classes," said Mike Gleason, director of equity alternative strategies at Acadian. "So, you have this response mechanism of multiple asset classes responding in kind.” Steve Sosnick, head trader at IBKR Securities Services, said trading Sunday night and on Monday's open "had the feel of forced selling." “There was a certain ‘get me out’ quality to the pre-market and opening trades that since have subsided," said Sosnick. Hedge funds started unwinding risk roughly two weeks ago, when stocks started to fall. Morgan Stanley estimated on June 25 that macro hedge funds could sell $110 billion in the coming weeks if markets further deteriorated. For some investors, the fact that the Nasdaq fell 10% below its record of 18,647.45 points on July 10 poses another challenge for a quick and sustainable bounce back. "Most of the people haven't unwound anything yet because they think it's just a regular correction," Currency Research Associates' Lindahl said. "This is a serious thing, it’s not just the regular correction. You don't have gap openings for 4% or 5% in major indexes, and then they recover. There's a serious collapse that's coming." On Monday evening, U.S. indexes futures opened in the black, pointing to investors taking advantage of lower valuations. "We're seeing fair number of people who are looking to be buyers on this setback. I think that's probably going to give us more of a two-way market," said Schwab's Jones. Sign up here. https://www.reuters.com/markets/aftershocks-carry-trade-heart-market-rout-could-still-have-reverberations-2024-08-06/

2024-08-06 10:25

Aug 6 (Reuters) - Wall Street expects Robinhood's (HOOD.O) , opens new tab revenue to hit record highs in the second quarter as retail investors flock to its commission-free app to trade so-called 'meme stocks' and cryptocurrencies. The return of influencer Keith Gill, known online as "Roaring Kitty", rekindled investor appetite for retail favorites like GameStop (GME.N) , opens new tab, luring mom-and-pop investors back to Robinhood. Its equity trading volumes surged 82% in April and 76% in May compared with a year ago. "I expect the company to show growth leveraged to and correlated with stock and crypto markets," said Michael Ashley Schulman, partner and CIO at Running Point Capital Advisors. The company's popularity is immortalized in the retail trading saga of 2021, when it became the platform of choice for people to pump money into meme stocks during the pandemic-era lockdowns. The 11-year-old trading app has been chasing growth and looking to mature into a full-fledged financial services provider. "The fundamental story has been improving in recent periods with healthy growth in deposits, margin balances, options/equities trading," Citigroup analysts said. Meanwhile, sentiment in the crypto markets has also got a boost from signs of easing regulatory constraints after the approval of the first spot bitcoin exchange-traded funds by the U.S. Securities and Exchange Commission. Shrugging-off regulatory roadblocks and heavy volatility in the sector, the company is betting on crypto to be its next big avenue for growth. Its crypto trading volume surged 238% in May, while April recorded a 173% jump compared with a year earlier. Even as Robinhood benefits from frenetic trading activity, analysts have cautioned the levels may not be sustainable over the long-term. "Things like Keith Gill's return to social media and crypto ETF euphoria look like trading blips and might not be sustainable trends that analysts can build into their financial models for Robinhood," Schulman said. The company is set to report results after markets close on Wednesday. THE FUNDAMENTALS * Revenue is expected to climb about 32% to $643.34 million in the second quarter, with a 51% surge in transaction-based revenues, per LSEG data. * Analysts see Robinhood reporting second-quarter earnings per share of 15 cents versus 3 cents a year ago. WALL STREET SENTIMENT * Six of 17 brokerages rate the stock "buy" or higher, nine "hold" and two "sell" STOCK PERFORMANCE Sign up here. https://www.reuters.com/technology/robinhoods-second-quarter-benefit-meme-stock-revival-crypto-trading-2024-08-06/

2024-08-06 10:24

A look at the day ahead in U.S. and global markets from Mike Dolan The speed and scale of Tuesday's 10% Tokyo bounce after its worst day in 37 years suggests the wild global market swings of the past week are more rooted in speculative churn than economic fright. While that's only partly reassuring - as persistent market turbulence can itself sap economic activity - there's good reason to believe a slowing U.S. labor market and factory sector do not automatically presage recession. July service sector readings show other parts of the economy are doing just fine. Any worries about employment weakness through next year should be tempered by the fact the Federal Reserve seems ready to take its foot off the brake and support the expansion. Chicago and San Francisco Fed chiefs on Monday said all options were now on the table for the central bank. Which leaves investors pondering the real cause of the truly hair-raising moves in market prices since last Wednesday - which saw the VIX 'fear index' of stock volatility jump by its most in one day to its third-highest peak ever. LOW-VOLATILITY TRADES BUILD The finger points squarely at the build-up of low-volatility trades, variously involving currency 'carry' plays funded by Japan's yen, short positioning in stock options and even Treasury futures arbitrage involving leveraged 'basis trades'. Those trades had built a head of steam during a period of peculiarly calm markets, which had seen the S&P 500 (.SPX) , opens new tab go 356 sessions without a 2% drop until last Wednesday. Yesterday it recorded its second such drop in a week. All flushed out? Probably not, but the boil may have been lanced at least and allow a more fundamental examination of the state of markets while a holiday-thinned August plays out. The 10% bounceback in Tokyo's Nikkei 225 (.N225) , opens new tab - after Monday's 12% drop aped the worst day of the 1987 crash - showed how quickly things can calm as the yen cooled even without much new information. Having plunged more than 8% in a week to its lowest since January, the dollar/yen exchange rate has bounced back from Monday's trough under 142 to more than 144 today. The VIX, meantime, has almost halved again from Monday's peaks above 65 and hovered about 34 before Tuesday's bell. Recalibrating slightly panicked Fed easing bets since the weak July payrolls print on Friday, U.S. fixed income markets also found a level. Futures markets now see about 112 basis points of Fed cuts by year-end, compared to more than 130bp at one point a day earlier. Ahead of Tuesday's $58 billion 3-year note sale and 10-year auction on Wednesday, 10-year Treasury yields regained a foothold above 3.8% compared with a low of 3.66% a day ago, and the 2-to-10 year yield curve stayed inverted after Monday's brief pop positive. The dollar index (.DXY) , opens new tab perked up, while the Swiss franc fell back and bitcoin caught a toehold, too. Bruised Wall St stocks saw futures back in positive territory - with gains of more than 0.5% across the S&P500 , , . VOLATILITY What now? The still-high level of implied volatility means big market swings are likely until full calm is restored - but attention will refocus quickly on underlying economic and earnings readouts. A resumption of the busy earnings diary may be first port of call, with Super Micro Computer out on Tuesday to test the recently wobbly reception for AI developments, and other household tech names like Uber and Airbnb are up alongside energy firms and industrial giant Caterpillar. On the broader economy, the soundings through the second quarter at least continue to show little sign of the sort of sudden economic heart attack suggested by recent market moves. U.S. banks reported no change in demand for commercial and industrial loans in the most recent quarter, the strongest showing on that measure in two years, according to a Fed survey of senior loan officers published late on Monday. And in the middle of frenetic rate cut speculation around the world, Australia's central bank ruled out a cut this year, saying core inflation is expected to come down only slowly after it held interest rates steady for a sixth straight meeting. Key developments that should provide more direction to U.S. markets later on day: * US June international trade, Canada June international trade. New York Fed's Q2 Household Debt and Credit Report; New York Fed's global supply chain pressure index for July * US corporate earnings: Super Micro Computer, Amgen, Caterpillar, Uber, Airbnb, Mosaic, Fox, Wynn Resorts, Molson Coors Beverage, Assurant, Progressive, Fortinet, Marathon, Duke Energy, Devon Energy, Constellation Energy, Sempra, Vulcan, DaVita, Kenvue, Zoetis, International Flavors & Fragrances, Henry Schein, Axon, Baxter, Jacobs Solutions, STERIS, Fidelity National Information Services, Trimble, IDEXX, Yum! Brands, etc * US Treasury sells $58 billion of 3-year notes, $46 billion of 12-month bills Sign up here. https://www.reuters.com/markets/us/global-markets-view-usa-2024-08-06/