2024-07-08 22:53

Boeing rises after plea deal in 737 MAX probe Paramount Global drops after Skydance merger deal Fed's Powell to testify in Congress on Tuesday and Wednesday Indexes: S&P 500 up 0.10%, Nasdaq up 0.28%, Dow down 0.08% July 8 (Reuters) - The S&P 500 and Nasdaq notched record-high closes on Monday as investors awaited fresh inflation data, commentary from Federal Reserve Chair Jerome Powell and the start of quarterly earnings season. Nvidia (NVDA.O) New Tab, opens new tab rose nearly 2%, Intel (INTC.O) New Tab, opens new tab rallied over 6% and Advanced Micro Devices (AMD.O) New Tab, opens new tab added 4%, lifting the Philadelphia semiconductor index (.SOX) New Tab, opens new tab 1.9%. Traders will scrutinize consumer price data due on Thursday and producer price data expected on Friday to gauge the Fed's progress in fighting inflation. Investors worry that waiting too long to cut interest rates could damage the labor market and push the economy into a recession. They will closely monitor Powell's semiannual testimony before U.S. Senate and House committees on Tuesday and Wednesday. "What investors want to hear is a dovish tone and an acknowledgement that the two-sided risks are more evenly balanced today, in particular, with respect to the labor market," said Ross Mayfield, an investment strategy analyst at Baird. Expectations for interest rate cuts as early as September grew after Friday's nonfarm payrolls report showed U.S. job growth slowed in June - the latest data to point to weakness in labor market conditions. Traders now see a greater than 75% chance of a rate cut of at least 25 basis points by September, up from last week's 60%, according to CME's FedWatch. Citigroup (C.N) New Tab, opens new tab, JPMorgan Chase (JPM.N) New Tab, opens new tab and Wells Fargo (WFC.N) New Tab, opens new tab are slated to kick off Wall Street's second-quarter earnings season on Friday. Citigroup shares gained 1.1%, while Wells Fargo lost 1%. Analysts on average see S&P 500 companies increasing their aggregate earnings per share by 10.1% in the second quarter, up from an 8.2% increase in the first quarter, according to LSEG I/B/E/S. The S&P 500 climbed 0.10% to end the session at 5,572.85 points. The Nasdaq gained 0.28% to 18,403.74 points, while the Dow Jones Industrial Average declined 0.08% to 39,344.79 points. It was the Nasdaq's fifth straight record-high close and the S&P 500's fourth straight. Of the 11 S&P 500 sector indexes, six declined, led lower by communication services (.SPLRCL) New Tab, opens new tab, down 1.01%, followed by a 0.59% loss in energy (.SPNY) New Tab, opens new tab. Paramount Global (PARA.O) New Tab, opens new tab fell 5.3% after it agreed on Sunday to merge with Skydance Media, scripting a new chapter for one of Hollywood's oldest studios. Boeing (BA.N) New Tab, opens new tab gained 0.55% after the planemaker agreed to plead guilty to a criminal fraud conspiracy charge and pay a fine of $243.6 million to resolve a U.S. Justice Department investigation into two fatal 737 MAX crashes. Advancing issues outnumbered falling ones within the S&P 500 (.AD.SPX) New Tab, opens new tab by a 1.3-to-one ratio. Volume on U.S. exchanges was relatively light, with 10.1 billion shares traded, compared with an average of 11.6 billion shares over the previous 20 sessions. Sign up here. https://www.reuters.com/markets/us/futures-flat-with-inflation-data-earnings-focus-2024-07-08/

2024-07-08 22:11

SAO PAULO, July 8 (Reuters) - Brazilian state-run oil company Petrobras on Monday announced its first gasoline price hike in almost a year, and also hiked the price of gas used for cooking and heating. In a statement, the oil giant announced it will boost gasoline prices for distributors by 7% starting on Tuesday. Petrobras shares closed up more than 2% on Monday following the announcement, while Brazil's benchmark Bovespa index was up 0.2%. The announcement marks the first Petrobras gasoline price tweak since Magda Chambriard replaced Jean Paul Prates as chief executive in May. The company last raised gasoline prices 16% last August as global oil prices surged. In October, Petrobras cut gasoline prices by 4%. Last year, Petrobras ditched a more market-based pricing policy in favor of one that gave it more flexibility to smooth out price swings. Analysts at Goldman Sachs wrote in a note to clients that the price paid by gasoline distributors in Latin America's biggest economy will still be about 14% lower than market prices. "On the one hand, we continue to see gasoline prices below international parity and with crack spread margins on the negative side," according to the note, which added that the price hike should allay investor concerns over potential political intervention in pricing. Gasoline will now rise 0.20 reais ($0.0366) per liter to 3.01 reais/liter. Average prices for Liquefied Petroleum Gas, used mostly for cooking and heating, will also go up, by 3.10 reais to reach 34.70 reais per 13-kg cylinder, according to a company statement. Andrea Angelo, a strategist at brokerage Warren Investimentos, said the fuel hikes could push up 2024 inflation by 18 basis points, with the benchmark IPCA consumer price index now forecast to rise to 4.28%. ($1 = 5.4639 reais) Sign up here. https://www.reuters.com/business/energy/brazils-petrobras-hikes-gasoline-prices-first-time-11-months-2024-07-08/

2024-07-08 21:50

July 9 (Reuters) - A look at the day ahead in Asian markets. The global markets spotlight moves from Paris to Capitol Hill on Tuesday as Federal Reserve Chair Jerome Powell testifies before the U.S. Congress and a busy week of events revs up. Politics were front and center on Monday as investors digested the surprise election in France that saw the leftist New Popular Front alliance unexpectedly coming first. French stocks (.FCHI) New Tab, opens new tab gave up early gains to drop 0.6% as investors mulled chances of a hung parliament, while the pan-European STOXX 600 index (.STOXX) New Tab, opens new tab ended little changed. The euro waffled against the dollar, at one point touching a multi-week high against the greenback before moving lower. U.S. politics were also a hot topic, with President Joe Biden under pressure to drop out of the presidential race after his shaky debate performance. Biden refused to abandon his reelection campaign on Monday, but investors were preparing to game out scenarios if another Democratic candidate emerges. Despite the political turmoil, the benchmark U.S. S&P 500 stock index (.SPX) New Tab, opens new tab and MSCI's all-country index (.MIWD00000PUS) New Tab, opens new tab both logged record highs on Monday. Japan's Nikkei (.N225) New Tab, opens new tab hit a record intraday high on Monday before closing down 0.3%. Meanwhile, mainland China and Hong Kong stocks ended lower on Monday, with the blue-chip CSI300 index (.CSI300) New Tab, opens new tab dropping 0.85% for its fifth-straight session of losses. Powell stands as the next test for assets. The Fed chief is set to deliver his semi-annual monetary policy testimony before the banking committee of the U.S. Senate. He will also be grilled by the other chamber of Congress the next day, appearing before a House of Representatives panel. Investors have been solidifying their view for the Fed to start rate cuts in September, with roughly 75% odds of a cut at that meeting, according to Fed Funds futures pricing. Will Powell give any hints? In Portugal last week, the Fed chair said the central bank still needs more data to ensure inflation has moderated sufficiently. Thursday's consumer price index report will provide the next evidence on the path of inflation. Here are key developments that could provide more direction to markets on Tuesday: - Taiwan import/export (June) - Australia business confidence (June) - Fed Chair Powell testifies at Senate committee Sign up here. https://www.reuters.com/markets/asia/global-markets-view-asia-graphic-pix-2024-07-08/

2024-07-08 21:21

TSX closes up 0.3% Critical miners fall US CPI due on Thursday July 8 (Reuters) - Canada's main stock index eked out a slight gain on Monday as declines in resources shares were more than offset by gains in the real estate and healthcare sectors. The Toronto Stock Exchange's S&P/TSX composite index (.GSPTSE) New Tab, opens new tab closed up 0.3%. Copper miners were the biggest drag, weighing down the materials sector (.GSPTTMT) New Tab, opens new tab that slipped 0.5% over concerns about Canadian restrictions against future M&A critical mineral deals. The biggest loser was First Quantum Minerals (FM.TO) New Tab, opens new tab, which fell nearly 5% as investors booked profits on the volatile stock. Lundin Gold (LUG.TO) New Tab, opens new tab was the top gainer with a 5% jump even as gold prices declined on profit-booking after bullion crossed a one-month high in the previous session. Healthcare real estate firm NorthWest Healthcare Properties (NWH_u.TO) New Tab, opens new tab closed up 4%. Healthcare (.GSPTTHC) New Tab, opens new tab, which rose more than 1%, and real estate (.GSPTTRE) New Tab, opens new tab, which gained nearly 2%, were the day's best-performing sectors. Lower oil prices weighed on the energy sector (.SPTTEN) New Tab, opens new tab, which eased as hopes for a ceasefire in Gaza eased supply disruption worries. Wall Street indexes also rose on Monday, with the S&P 500 (.SPX) New Tab, opens new tab and Nasdaq (.IXIC) New Tab, opens new tab hitting intraday record highs. U.S. jobs data on Friday showed job growth was moderating, firming bets of an interest-rate cut by the Federal Reserve in September. Markets will closely assess Fed Chair Jerome Powell's comments during his semi-annual testimony, alongside the U.S. Consumer Price Index (CPI) reading, expected later this week. "(The Fed would) rather make a mistake on holding rates higher for longer and tipping the economy into somewhat of a recession versus cutting too early and having inflation kind of pick up on them again", said Denis Taillefer, senior portfolio manager at Caldwell Investment Management. Earnings season is set to commence with big U.S. banks scheduled to report their quarterly earnings on Friday. After the Bank of Canada trimmed rates last month, market participants are now pricing in a 61.5% chance of another cut at its next meeting on July 24. 0#BOCWATCH Sign up here. https://www.reuters.com/markets/tsx-futures-muted-commodities-decline-amid-rate-cut-hopes-2024-07-08/

2024-07-08 20:51

Boeing's planned guilty plea could impact its ability to secure government contracts Boeing to pay $243.6 million fine, invest $455 million in safety and compliance Families of crash victims oppose plea deal, call for public trial WASHINGTON/PARIS, July 8 (Reuters) - Boeing is in talks with the U.S. Defense Department over how the planemaker's planned guilty plea could affect its extensive government contracts, a person briefed on the matter said. On Sunday, the Justice Department said in a court filing that Boeing had agreed to plead guilty to a criminal fraud conspiracy charge to resolve an investigation linked to two 737 MAX fatal crashes in 2018 and 2019 that killed 346 people. A guilty plea potentially threatens the company's ability to secure lucrative government contracts with the likes of the U.S Defense Department and NASA, although government agencies can waive any restrictions. Final details of the deal are expected to be filed by July 19. Pentagon spokesperson Air Force Major General Patrick Ryder told reporters the agency would make an assessment to decide the impact of the guilty plea on Boeing's contracts. He did not address whether the agency was in talks with the planemaker. "DOD will assess the company's remediation plans and agreement with the Department of Justice to make a determination as to what steps are necessary and appropriate to protect the federal government," Ryder said, adding any actions would be under U.S. government contracting regulations. Boeing and the Justice Department had no immediate comment. NASA declined to comment. Boeing shares pared early gains and closed up 0.6%. Boeing's Defense and Space unit is vital to its business, with $7 billion in first-quarter sales, up 6% from a year ago. In its annual report, Boeing said U.S. government contracts represented 37% of last year's revenue including foreign military sales. A government report said Boeing had $14.8 billion in Pentagon contracts in 2022. The financial costs tied to the plea appear "manageable relative to the company’s scale and overall obligations," said Ben Tsocanos, airlines director at S&P Global Ratings. "We expect that Boeing will likely continue to be a key supplier of defense and space products following the guilty plea," he added. The deal is also likely to be scrutinized outside the United States where Boeing is a key player on global markets, defense industry experts said. The Canadian government said it is "awaiting a decision on these legal proceedings and will assess implications once confirmed" and said the planned acquisition of the Poseidon P-8A is proceeding. All this comes at a time when geopolitical tensions are rising, pushing up defense spending. On paper, Boeing faces possible restrictions on future exports to a swathe of international markets, though whether it is actually excluded could depend on discretion allowed to local agencies and the realities of the defense market, they added. FOREIGN SALES For example, Britain, which operates Boeing's P-8A maritime patrol plane, and the European Union both have rules barring contractors with definitive criminal convictions from bidding for public contracts across many sectors for certain periods. "That is the letter of the law," said Keith Hayward, a fellow of the UK's Royal Aeronautical Society whose published research include works on localization in the defense industry. "The worst case analysis is that they would simply be barred from bidding, but this is a highly political as much as a legally defined business," Hayward said. "It depends how much the customer wants the product and whether Boeing control a particular product line - P-8 is a good example - where there aren't many alternatives." As part of the plea deal, Boeing will pay a criminal fine of $243.6 million, doubling an earlier agreement. Boeing has also agreed to invest at least $455 million over three years to strengthen safety and compliance programs and to have the Justice Department appoint an independent monitor to oversee compliance for three years. On Monday, the Justice Department opposed a bid by the families of those killed to force the government to immediately appoint a monitor that would oversee Boeing for five years. The DOJ said it generally takes "a number of months" to identify and vet candidates. Under Sunday's deal, Boeing is set to plead guilty to making knowingly false representations to the FAA about having expanded a key software feature used on the MAX to operate at low speeds that was tied to both fatal crashes. Family members intend to appear at a future hearing to object to the plea deal. Paul Cassell, an attorney for the families, described the proposed deal as the result of "crafty lawyering between Boeing and DOJ" and called for a public trial. In 2023, U.S. District Judge Reed O'Connor, who will decide whether to accept the plea, leveled harsh criticism at Boeing, citing what he called "egregious criminal conduct". But he said he was limited in what actions he could take. U.S. Senator Tammy Duckworth said on Monday that despite the expected guilty plea, Congress "must not let up on its own oversight of both Boeing and the FAA, and that is something I plan to continue to pursue." Boeing’s bonds were trading higher Monday. Their credit spreads, or premium over risk-free bonds, were trading slightly tighter than their levels last week, according to data from BondCliq which tracks secondary trading of corporate bonds. Sign up here. https://www.reuters.com/business/aerospace-defense/boeing-talks-with-us-defense-department-impact-guilty-plea-source-2024-07-08/

2024-07-08 20:49

TORONTO, July 8 (Reuters) - Shares of Canadian companies that mine critical minerals such as copper and uranium fell on the Toronto Stock Exchange (TSX)on Monday as investors assessed the potential impact of Canada's announcement last week that it would restrict large mergers and acquisitions in the sector. Last Thursday, Industry Minister Francois-Philippe Champagne cleared London-listed Glencore's (GLEN.L) New Tab, opens new tab takeover of the coal unit of Teck Resources under strict conditions after taking into account the "net benefit" that the deal would carry for Canadians. But he added Canada in future would allow large mergers and acquisitions in the sector only under the "most exceptional circumstances." Champagne said the ministry would set a high bar for clearing deals involving large Canadian companies in the critical minerals sector, reflecting the strategic importance of critical minerals and the need for Canada to protect its interests. Dean McPherson, head of global mining at TSX, said the government's announcement was not a "positive development," describing the new policy as "concerning." On Monday six critical mineral companies were among the top losers in opening trade on the Toronto Stock Exchange. Copper miners, including Capstone Copper (CS.TO) New Tab, opens new tab Hudbay Minerals (HBM.TO) New Tab, opens new tab, Teck Resources (TECKb.TO) New Tab, opens new tab, First Quantum Minerals (FM.TO) New Tab, opens new tab, Ivanhoe Mines (IVN.TO) New Tab, opens new tab were all down by over 3% around 1 p.m. Eastern Time, while uranium miner Cameco Corp (CCO.TO) New Tab, opens new tab was down 2.13%. "This updated policy significantly compresses M&A optionality and potentially restricts financing options for Canadian miners. As a result, we now anticipate most Canadian miners to trade at lower valuation multiples vs. global peers," said an analyst note led by Scotiabank analyst Orest Wowkodaw. Canada has identified 31 minerals, including copper, uranium, lithium and nickel, that it considers critical for their strategic uses in modern technology and the transition from fossil fuels, such as in electric vehicle batteries. "The door has not been closed but narrowed even further on investments in critical minerals," said Calvin Goldman, former head of Canada's Competition Bureau, who now runs an independent practice on advising clients in foreign investments. "So business community, get ready because you have to be fully prepared, as now they have to satisfy increasingly quiet strict criteria," Goldman added. Under the Investment Canada Act, the government can reject a proposed acquisition or inbound foreign investment if the government believes the deal represents a threat to national security or if it fails to satisfy the criteria for bringing a "net benefit" to Canadians. In the last two years, Canada has asked Chinese investors to divest from Canadian critical mining companies after a national security review, signaling that investments from certain countries such as China will come under tougher scrutiny. Some of the largest investors in leading Canadian copper companies are Chinese. Teck Resources counts China Investment Corp as its biggest shareholder. First Quantum's largest shareholder is China's state-owned copper miner Jianxi Copper (600362.SS) New Tab, opens new tab and Ivanhoe Mines has Hong Kong-headquartered CITC Metal Group has its leading shareholder. Sign up here. https://www.reuters.com/markets/commodities/canadian-critical-mineral-shares-fall-concern-after-tighter-ma-announcement-2024-07-08/