2024-07-24 13:50

OTTAWA, July 24 (Reuters) - The Bank of Canada on Wednesday trimmed its growth forecast for 2024, citing lower consumption, and reiterated that it expected inflation to return sustainably to its 2% target in the second half of 2025. In its quarterly monetary policy report, the central bank said 2024 growth would be 1.2%, down from the 1.5% it forecast in April. The bank said consumption had dipped on the back of slowing demand for motor vehicles and foreign travel as well as the fact households were allocating a larger share of their income to servicing debt payments. It estimated that on an annualised basis the economy had expanded by 1.7% in the first quarter, well below the 2.8% it predicted in April. The bank said overall inflation would dip below core inflation in the second half of 2024, in part due to base-year effects on gasoline prices. By the first half of next year this effect will have faded and inflation will settle sustainably at 2% in the second half of 2025. The bank cut its key policy rate by 25 basis points to 4.50% on Wednesday, the second consecutive reduction. Sign up here. https://www.reuters.com/markets/bank-canada-trims-2024-growth-forecast-sees-inflation-hitting-target-2nd-half-2024-07-24/

2024-07-24 13:02

S&P 500 snaps 356-session run without a 2% decline Worst single-day performance for Nasdaq since October 2022 Tesla posts largest daily fall since Sept. 2020 on earnings Indexes down: Dow 1.25%, S&P 2.31%, Nasdaq 3.64% July 24 (Reuters) - The S&P 500 and Nasdaq ended at multi-week lows on Wednesday, with the S&P snapping one of its longest streaks without a daily decline of more than 2%, as lackluster Alphabet and Tesla earnings undermined investor confidence in megacap names. As the first of the Magnificent Seven stocks reported quarterly numbers, investors had been awaiting new data to see if lofty valuations were justified. With these seven companies having such sway over markets, their performance was bound to have wide repercussions. Investor reactions to the numbers contributed to the benchmark S&P 500 (.SPX) , opens new tab posting its worst one-day performance since December 2022. Its 2.3% fall marked the first time it had closed more than 2% off in 356 sessions, its longest streak since 2007. The Nasdaq Composite (.IXIC) , opens new tab was also beaten down, posting its largest single-day percentage decline since October 2022 to finish at its lowest point since June 10. Meanwhile, the Dow Jones Industrial Average (.DJI) , opens new tab closed below 40,000 points for the first time in two weeks. Dave Grecsek, managing director in investment strategy and research at Aspiriant, noted that the upward momentum of the first two weeks of July in equity markets had now disappeared over the last week. "There's a little bit of profit-taking, and then people are a little apprehensive about earnings announcements upcoming," he said. Tesla (TSLA.O) , opens new tab weighed heavily on Wednesday, slumping 12.3% in its worst single-day fall since September 2020. This came after the electric-vehicle maker reported its lowest profit margin in more than five years and missed second-quarter earnings estimates. Google parent Alphabet (GOOGL.O) , opens new tab dropped 5%, to its worst finish since May 31, despite a second-quarter earnings beat, as investors focused on an advertising-growth slowdown and the company flagged high capital expenses for the year. Tesla and Alphabet dragged the S&P 500 Communication Services (.SPLRCL) , opens new tab and Consumer Discretionary (.SPLRCD) , opens new tab sector indexes down by 3.8% and 3.9% respectively, with the Consumer Discretionary index posting its largest single-day decline since September 2022. Information Technology (.SPLRCT) , opens new tab was the weakest performer of the 11 S&P sectors though, and its 4.1% decline was its largest daily drop since October 2022. Alphabet's losses underscored the high earnings bar for the so-called Magnificent Seven, a set of megacap tech stocks that have notched double- and triple-digit percentage gains in 2024, riding on optimism around AI adoption and expectations of an early start to the Federal Reserve's interest-rate cuts. "When you put everything in an earnings context, you can really understand why those Mag 7 stocks have been performing so great because the earnings have been there," said Grecsek. Any doubts, however, about the stocks meeting expectations will induce selling pressure. The other megacaps, Apple (AAPL.O) , opens new tab, Microsoft (MSFT.O) , opens new tab, Amazon.com (AMZN.O) , opens new tab, Meta Platforms (META.O) , opens new tab and Nvidia (NVDA.O) , opens new tab, all closed down between 2.9% and 6.8%. Meanwhile, the blue-chip Dow (.DJI) , opens new tab did not escape the negativity. Visa (V.N) , opens new tab was among the stocks that weighed on it, dropping 4% after its third-quarter revenue growth fell short of expectations. As stocks tumbled, the Cboe Volatility Index (.VIX) , opens new tab - known as Wall Street's fear gauge - closed at 18.04, the highest since April 19. The S&P 500 lost 128.61 points, or 2.31%, to 5,427.13 points, while the Nasdaq lost 654.94 points, or 3.64%, to 17,342.41. The Dow Jones Industrial Average fell 504.22 points, or 1.25%, to 39,853.87. Among others, AT&T (T.N) , opens new tab gained 5.2% after beating forecasts for wireless subscriber additions, while solar inverter maker Enphase Energy (ENPH.O) , opens new tab jumped 12.8% after reporting a second-quarter operating profit beat. Meanwhile, Roper Technologies (ROP.O) , opens new tab dropped 7.4% after it signaled third-quarter profit would fall below estimates. Boston Scientific (BSX.N) , opens new tab traded 1.1% down, despite lifting its 2024 profit target and beating second-quarter earnings estimates. Volume on U.S. exchanges was 12.94 billion shares, compared with the 11.48-billion average for the full session over the last 20 trading days. Sign up here. https://www.reuters.com/markets/us/nasdaq-futures-slide-first-big-tech-results-disappoint-2024-07-24/

2024-07-24 12:46

LONDON, July 24 (Reuters) - Anglo American (AAL.L) , opens new tab investors will keenly scrutinize CEO Duncan Wanblad on Thursday as he gives an update on the London-based miner's strategy, just months after fighting off a $49 billion takeover bid from bigger rival BHP Group (BHP.AX) , opens new tab. Delivering first-half earnings results for the first time after rebuffing the world's No. 1 miner, Wanblad and his team need to convince investors that the strategy to refocus on copper, iron ore and a fertilizer project is on track. While Wanblad pinned his approach on getting an early start with selling Anglo's coking coal assets in Australia, which the company said has drawn huge interest, an unexpected and unwieldy fire at its Grosvenor mine at one of the mines could torpedo the well-laid plans, setting the timing back with a possible hit to the deal's valuation. "Clearly, any updates on the simplification strategy will be closely watched," said Richard Hatch, analyst at Berenberg. "Our key questions center around the challenges of selling the coal business ... and whether Anglo would accept payments in contingent form due to operational issues," Hatch added. Anglo has already cut its output forecast for steelmaking coal, because of the June 29 fire at its Grovesnor mine that has rendered the affected sections inaccessible. Damage assessment and re-opening is going to take several months, Anglo said. Investors also expect Anglo to write off the value of its Woodsmith fertiliser project in northern England, having earlier said it would slow down development but still invest $800 million this year. Anglo already wrote down $1.7 billion on the project a year ago. The restructuring plan, which also includes the demerger of its South African platinum unit, closure or sale of its nickel mines and the divestment of diamonds business De Beers, could be completed by 2025. Unless, BHP (BHP.AX) , opens new tab resumes its pursuit or other suitors, join the hunt. "BHP could come back after six months, or could wait for the Amplats unbundling to be complete," said Ian Woodley, portfolio manager at Old Mutual. "If I were them, I would wait at least until the unbundling has moved along a bit further," he added. The main prize in Anglo's portfolio are its world class and long-life copper assets in Latin America. Copper is seen as a draw-card to deals in the mining sector, with investors expected to demand that even the most profitable companies show plans on how to grow the metal's portfolio. "Having an exposure to the copper sector, to the copper price, is attractive for investors," said Erik Belz, president and chief operating officer at hedge fund Engine No. 1. "Consolidation can get our (investors) costs down. If we get our costs down, we can expand our margin. And if the price goes up on top of that, then that's sort of two ways to win," Belz added. Sign up here. https://www.reuters.com/markets/commodities/anglo-face-investors-with-wary-eye-bhps-potential-return-2024-07-24/

2024-07-24 12:42

BENGALURU, July 24 (Reuters) - Jindal Steel and Power (JNSP.NS) , opens new tab reported a drop in first-quarter profit on Wednesday as a string of higher expenses added to the dent caused by weak steel demand in a quarter that included the general elections. The steelmaker's consolidated profit after tax fell 21% to 13.38 billion rupees (around $160 million) in the April-June quarter. Raw material costs surged 22%, leading to a 8% rise in expenses at 117.93 billion rupees, the company said , opens new tab. KEY CONTEXT Jindal Steel's coal mines have helped it offset rising iron ore costs for the past few quarters, while its results also got a lift from buoyant steel demand due to the government's sustained spending on manufacturing and infrastructure ahead of the general elections. In April-June however, the general elections, which lasted for nearly half the quarter, led to muted steel demand, analysts said, which was compounded by higher costs of rebar, a key raw material for steelmakers. Last week, bigger peer JSW Steel (JSTL.NS) , opens new tab reported a bigger-than-expected fall in profit. PEER COMPARISON * The mean of analyst ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell ** The ratio of the stock's last close to analysts' mean price target; a ratio above 1 means the stock is trading above the PT APRIL-JUNE STOCK PERFORMANCE -- All data from LSEG -- $1 = 83.6820 Indian rupees Sign up here. https://www.reuters.com/markets/commodities/indias-jindal-steel-posts-smaller-q1-profit-general-elections-hits-demand-2024-07-24/

2024-07-24 12:38

SINGAPORE, July 24 (Reuters) - Ship owner Hafnia (HAFNI.OL) , opens new tab, operator of the Hafnia Nile oil tanker, is in discussion with Singapore's Maritime and Port Authority (MPA) about transferring the damaged ship's cargo of naphtha to a safe location, the MPA said on Wednesday. The Singapore-flagged Hafnia Nile and the Sao Tome and Principe-flagged Ceres I collided and caught fire about 55 km (35 miles) northeast of the Singaporean island of Pedra Branca early on July 19. The Hafnia Nile, a Panamax tanker chartered by Spanish energy firm Cepsa (CPF.GQ) , opens new tab, was carrying about 300,000 barrels of naphtha which had been purchased by Japanese refiner Eneos (5020.T) , opens new tab. Naphtha is a raw material for making petrochemicals. Hafnia said on Wednesday that experts are conducting inspections of the damaged areas of the tanker which remains connected to tugs in Malaysian waters. An initial assessment by the team of specialists showed the Hafnia Nile's engine room had suffered damage from the fire, Hafnia said in a statement. "Further inspections have confirmed a light oil sheen which is seen emanating from the damaged area," it added. "A salvage team that has boarded the vessel has meanwhile transferred equipment from one of the attending tugs on site to contain and stop any localised seepage." Hafnia said it is in discussion with the Malaysia Marine Department (MMD) and Singapore's MPA to develop a towage plan for the vessel and assess a location for cargo transfer and repairs. MPA said Hafnia, will also arrange for clean-up for the tanker which is currently located about 100 kilometres from Singapore. Singaporean and Malaysian authorities are still investigating the collision. Sign up here. https://www.reuters.com/world/asia-pacific/hafnia-singapore-port-authority-transfer-oil-cargo-fire-hit-tanker-2024-07-24/

2024-07-24 12:38

OTTAWA, July 24 (Reuters) - Canadian factory sales most likely fell 2.6% in June from May, largely due to the chemical product and transportation equipment subsectors, Statistics Canada said in a flash estimate on Wednesday. The estimate was calculated based on a weighted response rate of 71.0%. The average weighted response rate for the survey over the previous 12 months has been 94.4%. NOTE: All figures are seasonally adjusted. Sign up here. https://www.reuters.com/markets/canada-june-factory-sales-most-likely-fell-26-statscan-flash-estimate-shows-2024-07-24/