2024-07-11 00:18

July 10 (Reuters) - The Federal Reserve is closely watching changes in the unemployment rate and would respond if it starts a quick climb, Fed Governor Lisa Cook said on Wednesday. With a 4.1% unemployment rate "the labor market is still robust," Cook said at an event in Australia. "But we are very attentive to what is happening with the unemployment rate ... The situation could change very quickly and we would be responsive." Sign up here. https://www.reuters.com/markets/us/cook-says-fed-would-respond-if-unemployment-starts-rise-more-quickly-2024-07-11/

2024-07-10 23:09

S&P 500 crosses 5,600 mark for first time TSMC up on strong Q2 revenue growth Intuit to cut about 1,800 jobs; shares fall S&P 500 +1.02%, Nasdaq +1.18%, Dow +1.09% July 10 (Reuters) - The Nasdaq and S&P 500 rallied to record high closes on Wednesday, fueled by gains in Nvidia and other Wall Street heavyweights ahead of inflation data and quarterly earnings reports due this week. It was the Nasdaq's seventh straight record-high close and the S&P 500's sixth straight. The S&P 500 crossed 5,600 for the first time after Federal Reserve Chair Jerome Powell stoked expectations for an interest-rate cut in September. Powell said in his second day of Congressional testimony that he was not ready to conclude that inflation was moving sustainably down to 2%, although he expressed "some confidence of that". The Philadelphia semiconductor index (.SOX) New Tab, opens new tab surged 2.4% to a record high after contract manufacturer Taiwan Semiconductor Manufacturing Co posted strong quarterly revenue. "TSMC's report supported the AI narrative, so that more than anything else today is a pretty important data point," said Thomas Martin, senior portfolio manager at Globalt Investments in Atlanta. Micron Technology (MU.O) New Tab, opens new tab jumped 4%, Nvidia (NVDA.O) New Tab, opens new tab climbed 2.7% and Advanced Micro Devices (AMD.O) New Tab, opens new tab added 3.9%. Apple (AAPL.O) New Tab, opens new tab climbed 1.9% to a record high, lifting its stock market value to $3.6 trillion. With just a handful of large-cap stocks fueling Wall Street's rally this year, some investors worry about a potential selloff if those companies' earnings fail to meet high expectations. The S&P 500 climbed 1.02% to end the session at 5,633.91 points. The Nasdaq gained 1.18% to 18,647.45 points, while the Dow Jones Industrial Average rose 1.09% to 39,721.36 points. The S&P 500 has now gained 18% in 2024, and the Nasdaq is up 24%. All 11 S&P 500 sector indexes rose on Wednesday, led by information technology (.SPLRCT) New Tab, opens new tab, up 1.63%, followed by a 1.34% gain in materials (.SPLRCM) New Tab, opens new tab. Volume on U.S. exchanges was relatively light, with 10 billion shares traded, compared to an average of 11.5 billion shares over the previous 20 sessions. U.S. inflation data due this week include the Consumer Price Index on Thursday and the Producer Price Index report on Friday. Expectations of a 25-basis-point rate cut by September ticked up to 74% from around 70% on Tuesday and 45% a month ago, according to CME's FedWatch. Second-quarter earnings season, which kicks off this week with major banks reporting on Friday, will test whether high-flying megacaps can justify expensive valuations and extend their strong runs. Intuit (INTU.O) New Tab, opens new tab dropped 2.6% after the TurboTax owner said it plans to lay off about 10% of its workforce. Gene-sequencing equipment maker Illumina (ILMN.O) New Tab, opens new tab jumped over 6% after it said it was acquiring privately held Fluent BioSciences. Advancing issues outnumbered falling ones within the S&P 500 (.AD.SPX) New Tab, opens new tab by a 4.3-to-one ratio. The S&P 500 posted 33 new highs and 11 new lows; the Nasdaq recorded 65 new highs and 117 new lows. Sign up here. https://www.reuters.com/markets/us/futures-higher-nvidia-other-megacaps-build-gains-2024-07-10/

2024-07-10 23:06

LONDON, July 11 (Reuters) - London overtook Paris last year as Europe's top region for new foreign direct investment but many other UK areas saw FDI fall, according to data that underscores the challenge facing the new government to spread development across the country. Accountancy firm EY said regional figures from its annual FDI survey showed London attracted 359 projects, up 20% from 2022 and its highest annual total since 2019, led by technology and financial services. That made the UK capital Europe's leading region for new FDI projects in 2023, edging ahead of Paris and its surrounding areas which recorded 300. Scotland - helped by the growth of the wind power industry - and the West Midlands saw increases of 14% and 72% in the number of FDI projects. By contrast, Wales, Northern Ireland and the East Midlands saw big falls and regions across the north of England also attracted less new investment from abroad than in 2022. Peter Arnold, UK chief economist at EY, said a 6% increase in FDI into the UK overall - a figure previously released - could reflect the easing of the political turmoil in 2023 after Britain had three different prime ministers in 2022. Britain's new leader Keir Starmer has said his government will increase the investment needed to boost slow economic growth through a combination of stability, reforms of the often restrictive planning system and targeted state support. Arnold said the new government should consider the impact of incentives, grants and skills-building on attracting FDI to different parts of the UK. "Enhancing the attractiveness of its diverse regions will be key to elevating the UK's national investment profile," he said. "The progress of Scotland and the West Midlands shows that there is a clear appetite for investing outside London." Sign up here. https://www.reuters.com/world/uk/london-leads-europe-new-fdi-while-much-uk-sees-drop-survey-shows-2024-07-10/

2024-07-10 23:05

July 10 (Reuters) - Canadian oil producer Strathcona Resources (SCR.TO) New Tab, opens new tab said on Wednesday it has partnered with Canada Growth Fund (CGF) to build carbon capture and sequestration (CCS) infrastructure in Saskatchewan and Alberta provinces. Strathcona and CGF, a federal clean-tech financing agency, will each invest up to C$1 billion ($734.38 million) to fund the project that will seek to capture and permanently store up to 2 million tonnes of carbon dioxide annually. Carbon capture is a process through which carbon dioxide generated from industrial activity is stored underground. CONTEXT CGF will initially commit C$500 million in funding the project, with the option to upsize its commitment to C$1 billion. The partners will each fund 50% of the capital costs to build CCS infrastructure on the energy producer's oil sands facilities. Strathcona will build, own and operate the CCS projects and receive all investment tax credits. The company expects to eliminate a substantial part of its future carbon tax liability through this project. WHY IT'S IMPORTANT Last year, Canada said it will finance investment tax credits for CCS and net-zero energy technologies, following through on previously announced subsidies meant to attract more green investment. Canada, the world's fourth-biggest petroleum producer, sees the process as the key to decarbonizing the country's oil sands. Last year, Prime Minister Justin Trudeau had said he wanted his country to be a leading global supplier of green technology. ($1 = 1.3617 Canadian dollars) Sign up here. https://www.reuters.com/business/energy/oil-producer-strathcona-partners-with-canada-growth-fund-carbon-capture-2024-07-10/

2024-07-10 21:50

July 11 (Reuters) - A look at the day ahead in Asian markets. Thursday's U.S. inflation report could test markets, with consensus coalescing around the first Federal Reserve rate cut of this cycle in September. The consumer price report for June is expected to show an annual change of 3.1%, moderating from 3.3% the prior month. As it stands, Fed funds futures are showing a 70% chance that the central bank eases at its September meeting, according to CME FedWatch. But rate-cut expectations have swung wildly this year, and a surprise inflation spike could further jolt projections and rattle asset prices. Fed Chair Jerome Powell, back on Wednesday for his second day of testimony before Congress, said the central bank will make rate decisions "when and as" they are needed. He pushed back on a suggestion that a September rate cut could be seen as a political act ahead of the Nov. 5 U.S. presidential election. Ahead of the CPI report, the mood was buoyant on Wall Street. The S&P 500 (.SPX) New Tab, opens new tab and Nasdaq Composite (.IXIC) New Tab, opens new tab both gained slightly over 1% and finished at record highs. Nvidia (NVDA.O) New Tab, opens new tab shares added to their monster run for the year, rising 2.7% with all of the "Magnificent 7" megacaps posting gains. Second-quarter earnings season is soon to heat up, with major banks led by JPMorgan (JPM.N) New Tab, opens new tab reporting on Friday. The dollar edged lower on Wednesday while U.S. Treasury yields slipped as traders assessed Powell's comments. Rate decisions were a hot topic elsewhere around the globe. Bank of England Chief Economist Huw Pill undercut hopes for an August interest rate cut, noting price pressures in Britain's economy. New Zealand's central bank held its cash rate steady on Wednesday, but opened the door to monetary policy easing over time should inflation slow as expected. The Bank of Korea is expected to keep its policy rate on hold at a 15-year high on Thursday, with a cut seen in next quarter, a Reuters poll found. In China, meanwhile, the fears were of deflation and weak demand. Data on Wednesday showed China's consumer prices grew for a fifth month in June but missed expectations. China shares closed lower after the data, with the blue-chip CSI300 index (.CSI300) New Tab, opens new tab dropping 0.3%. Japan's Nikkei (.N225) New Tab, opens new tab, meanwhile, closed up 0.6% at a record high as its 2024 run rolled on. Here are key developments that could provide more direction to markets on Thursday: - Bank of Korea meeting - Malaysia central bank meeting - U.S. consumer price index report (June) Sign up here. https://www.reuters.com/markets/asia/global-markets-view-asia-graphic-pix-2024-07-10/

2024-07-10 21:30

Source at U.S. FTC says move shows Microsoft sees potential antitrust exposure Apple will not take an observer role on OpenAI's board, Financial Times reports Microsoft's OpenAI partnership still a merger issue with UK antitrust watchdog BRUSSELS, July 10 (Reuters) - Microsoft (MSFT.O) New Tab, opens new tab has given up its board observer seat at OpenAI in a move aimed at easing U.S. and UK antitrust regulators' concerns about the extent of its control over the AI startup amid the soaring popularity of generative artificial intelligence. But the change was unlikely to resolve concerns by the U.S. Federal Trade Commission, a source at the agency said on Wednesday. The FTC is conducting an antitrust review of deals by Big Tech firms and top AI companies. The move shows Microsoft sees significant potential antitrust exposure and is trying to get ahead of it, the FTC source said. A spokesperson for Microsoft did not immediately reply to a request for comment on Wednesday. Meanwhile, Apple (AAPL.O) New Tab, opens new tab, which said last month it was bringing OpenAI's chatbot, ChatGPT, to its devices, will not take an observer role on OpenAI's board after being widely expected to do so, according to a person with direct knowledge of the matter. The person added that OpenAI has no future plans to offer any board observer roles. Apple did not respond to a request for comment. An OpenAI spokesperson said the company would establish a new approach to engaging with stakeholders by hosting regular meetings with strategic partners such as Microsoft and Apple, and investors such as Thrive Capital and Khosla Ventures. Microsoft took a non-voting, observer position on OpenAI's board in November after OpenAI CEO Sam Altman took back the reins of the company. The seat meant Microsoft could attend OpenAI's board meetings and access confidential information but had no voting rights on matters including electing or choosing directors. The observer seat and Microsoft's more than $10 billion investment in OpenAI have triggered unease among antitrust watchdogs in the European Union, Britain and the U.S. over how much control it exerts over OpenAI. The position provided insights into the board's work without compromising its independence, Microsoft said in a letter to OpenAI dated July 9. It cited OpenAI's new partnerships, innovation and growing customer base since Altman's return to the startup as reasons for giving up its observer seat. "Over the past eight months we have witnessed significant progress by the newly formed board and are confident in the company's direction. Given all of this we no longer believe our limited role as an observer is necessary," it said in the letter. EU antitrust regulators last month said the partnership would not be subject to the bloc's merger rules because Microsoft does not control OpenAI, but they would instead seek third-party views on the exclusivity clauses in the agreement. In contrast, British and U.S. antitrust watchdogs continue to have concerns as well as questions about Microsoft's influence over OpenAI and the latter's independence. Bill Baer, a former U.S. antitrust official and visiting fellow at the Brookings Institution, said on Wednesday that it seemed the risk of simultaneous antitrust investigations outweighed the benefit of being an observer on the OpenAI board. "That looks like the right call," he said, but added that regulators' concerns seem to go beyond the board seat. Microsoft is making a smart move by removing the only tangible evidence of possible control/influence over OpenAI, making it very difficult for antitrust regulators to prove otherwise, said an antitrust lawyer who declined to be named due to industry sensitivities. Britain's Competition and Markets Authority declined to comment. Microsoft and OpenAI are increasingly competing to sell AI technology to enterprise customers, aiming to generate revenue and demonstrate their independence to regulators to address antitrust concerns. Additionally, Microsoft is expanding its AI offerings on the Azure platform and has hired the CEO of tech company Inflection to head its consumer AI division, a move widely interpreted as an effort to diversify beyond OpenAI. Sign up here. https://www.reuters.com/technology/microsoft-ditches-openai-board-observer-seat-amid-regulatory-scrutiny-2024-07-10/