2024-06-25 20:08

June 25 (Reuters) - Norwegian solar energy company NorSun will invest $620 million in Tulsa, Oklahoma, for its first U.S. factory, the state's department of commerce said on Tuesday. The facility will produce silicon ingots and wafers needed to make solar cells that are the building blocks of panels. President Joe Biden's administration has sought to incentivize a homegrown clean energy manufacturing sector that can compete with China. NorSun will begin construction in late 2024, after it receives all regulatory approvals, and production is anticipated to come online in 2026, according to the statement. The facility will create 320 direct jobs. "I’m proud to welcome NorSun to Oklahoma, and I'm thrilled that Oklahomans will benefit from hundreds of new jobs in the Tulsa area and a $620 million capital investment," Oklahoma Governor Kevin Stitt said in a statement. "Our pro-growth policies, workforce development efforts, and ‘more of everything’ energy approach makes us an incredible state to invest in, and I’m glad NorSun can be a part of it." NorSun's ingots and wafers will help meet growing demand from solar cell and panel manufacturers, who must meet stringent domestic content requirements for their products to qualify for a new tax credit included in Biden's landmark climate change law, the Inflation Reduction Act. Sign up here. https://www.reuters.com/business/energy/norwegian-solar-firm-norsun-invest-620-mln-tulsa-oklahoma-2024-06-25/

2024-06-25 18:15

Canada's annual inflation rate accelerates to 2.9% BoC July rate cut chances fall below 50% Price of U.S. oil declines 0.7% Canada-US 10-year spread narrows 5.6 basis points TORONTO, June 25 (Reuters) - The Canadian dollar was little changed against its broadly stronger U.S. counterpart on Tuesday, as investors priced in a less than even chance the Bank of Canada would cut interest rates next month after hotter-than-expected inflation data. Canada's annual inflation rate unexpectedly accelerated to 2.9% in May from 2.7% in April while key measures of core inflation edged up for the first time in five months. "It's difficult to say at this juncture if the May CPI print is simply giving back a more rapid pace of inflation deceleration exhibited over the last four months, or if new price pressures are emerging," Geoff Phipps, a trading strategist and portfolio manager at Picton Mahoney, said in a note. "Whether or not July is a live meeting for a further cut will depend on upcoming data, of which there is plenty before the July meeting." Investors see a 45% chance that the BoC will cut rates at its next policy decision on July 24, down from 65% before the inflation report, swaps market data showed. Earlier this month, the BoC became the first G7 central bank to begin easing, lowering its benchmark rate by 25 basis points to 4.75%. The Canadian dollar was trading nearly unchanged at 1.3650 per U.S. dollar, or 73.26 U.S. cents, after trading in a range of 1.3632 to 1.3680. It was the only currency other than sterling not to lose ground against the U.S. dollar (.DXY) New Tab, opens new tab after hawkish comments from a Federal Reserve official. The price of oil , one of Canada's major exports, was down 0.7% at $81.08 a barrel, while Canadian bond yields climbed across the curve. The 10 year was up 5 basis points at 3.382%, with the gap between it and the U.S. equivalent narrowing by 5.6 basis points to 86 basis points in favor of the U.S. note. Sign up here. https://www.reuters.com/markets/currencies/canadian-dollar-gains-cpi-data-crimps-july-rate-cut-prospects-2024-06-25/

2024-06-25 16:29

June 25 (Reuters) - For investors in France, a left-wing alliance could be a bigger risk than a far-right leadership, some analysts say. President Emmanuel Macron's shock decision to call parliamentary elections this month and Marine Le Pen's far-right National Rally (RN) leading the polls have exacerbated concerns about France's fiscal sustainability. The spread French debt pays over Germany surged and shares in French banks and companies (.FCHI) New Tab, opens new tab slumped in the days after the election was announced. The selloff has eased but assets are far from recovering. Spending plans by the leftist New Popular Front (NFP) alliance, which is polling second behind the RN, have added to those fiscal worries. Some investors and analysts now say the risk that the NFP may perform better than expected in the second election round on July 7 due to tactical voting, and even form part of a new government, may be a bigger worry for financial markets. "The worst outcome for the market would be if the left wing would get in with the majority... that's the tail risk," said Gareth Hill, a portfolio manager at Royal London Asset Management. The NFP wants to progressively ramp up spending to an extra 150 billion euros ($160.44 billion) annually by 2027 to cover policies ranging from a 10% civil servant pay rise this year to cutting the retirement age to 60 from 64 currently. It says the spending would be fully offset by hikes on taxes ranging from inheritance to wealth and multinational corporations. While the NFP would not increase France's budget deficit if able to form a government, it also wouldn't reduce it, an official said last week. That's a worry for investors. France's deficit was at 5.5% of output last year - far above the European Union's 3% limit - already prompting the EU executive to recommend disciplinary steps. In contrast, the far-right RN's financial pointman Jean-Philippe Tanguy told Reuters in an interview published on Monday that the party won't "let the deficit run out of control" and would retain current plans to reduce it to 3% by 2027 to respect EU rules. It has also pledged an audit of public finances. While it remained to be seen what it would do if in government, the RN at least speaking of fiscal responsibility is "reassuring", said Hill at Royal London Asset Management. NEGATIVE FOR THE EURO There's no doubt the RN's costly plans have spooked markets. They include cutting value-added tax on energy and lowering the retirement age to 60 for workers, though the party now says that would only apply to those who started working before the age of 20. It says the cost of its plans can be offset by cutting red tape, closing tax loopholes and reducing welfare spending benefiting immigrants. Yet, compared to an NFP lead, an RN majority would be welcomed by financial markets, economists at Nomura said in a note distributed on Tuesday. "In our view, NFP forming the government, whether outright or as a minority, would be most adverse for financial markets and result in (French-German bond) spreads widening further," they wrote, adding it would also be negative for the euro . "In many ways, the NFP is openly rejecting the institutions that govern fiscal prudence, akin to the UK's Liz Truss," Nomura wrote, referring to the former British Prime Minister's unfunded tax cuts that led to a UK government bond rout in 2022. Economists at investment bank Jefferies said a left-wing government would be the "worst outcome" for markets if it was the result of Jean-Luc Melenchon's far-left France Unbowed party, part of the NFP, doing well and prompting a far-left policy agenda. "We could see increased clashes with the EU," Jefferies wrote, expecting the French spread over Germany - currently around 70 basis points - to widen to as much as 120 in such a scenario, assigning it a 20-25% chance. "The negative reaction in the market could last longer, and it's not obvious to us that this scenario would be consistent with a buy the dip view," they wrote, a position they recommend for most other scenarios including an RN absolute majority. ($1 = 0.9349 euros) Sign up here. https://www.reuters.com/markets/europe/markets-wake-up-left-wing-french-election-risk-2024-06-25/

2024-06-25 15:50

NEW YORK, June 25 (Reuters) - Hedge fund Coatue Management's founder Philippe Laffont said on Tuesday that he is concerned about how geopolitical conflicts could affect the chip industry and the development of artificial intelligence, including Nvidia(NVDA.O) New Tab, opens new tab. Speaking at the Bloomberg Invest conference, Laffont said if China invaded Taiwan, it would disrupt chip production, as most of the industry capital expenditure is concentrated in the island with Taiwan Semiconductor Manufacturing Company (2330.TW) New Tab, opens new tab, which has Nvidia as one of its major clients. "That's very risky because the highest market capitalization is dependent on production in Taiwan," he said about the risks posed to AI chipmaker Nvidia. Last week, Nvidia became the most valuable company at $3.3 trillion. On Tuesday, it was the third biggest company by market capitalization, behind Microsoft and Apple. Coatue ended March with roughly $1.3 billion invested in Nvidia, according to a securities filing. Laffont did not mention his current position. Sign up here. https://www.reuters.com/technology/coatues-laffont-says-geopolitics-is-threat-nvidia-chip-industry-2024-06-25/

2024-06-25 14:25

Inflation accelerates to 2.9% from 2.7% in Apr Markets see below 50% chance of July rate cut Core inflation up for first time in five months OTTAWA, June 25 (Reuters) - Consumer prices in Canada took an unexpected turn and rose in May, data showed on Tuesday, after showing signs of an almost consistent cooling since the start of the year, forcing markets to trim hopes of a rate cut in July to below 50%. The Bank of Canada, which cut interest rates for the first time in four years this month, has repeatedly maintained that the path towards further easing of rates would be data dependent, and May's inflation data dampens the chance of an immediate rate cut. "No bones about it, this is not what the Bank of Canada wanted to see at this point, and clearly shaves the odds of a follow-up July rate cut," said Douglas Porter, chief economist at BMO Capital Markets, adding that the next rate cut is likely to be in September. The annual inflation rate accelerated to 2.9% in May from 2.7% a month ago, while key measures of core inflation - closely tracked by the BoC - edged up for the first time in five months, Statistics Canada said. Money markets heavily trimmed their bets and now see a 45% chance of a rate cut in July, from over 70% seen on Monday. The Canadian dollar pared early losses and firmed by 0.07% to 1.3663 against the U.S. dollar, or 73.28 U.S. cents. Analysts polled by Reuters had forecast inflation to cool to 2.6%. Month-over-month, the consumer price index was up 0.6%, exceeding a 0.3% rise forecast. The surprise acceleration in headline inflation was driven by prices for services including cellular services, travel tours, rent and air transportation, Statscan said. CPI-median and CPI-trim, the Bank of Canada's preferred measures of underlying inflation, rose for the first time since December, contrary to market expectations. CPI-median sped up to 2.8% from 2.6% in April while CPI-trim accelerated to 2.9% from 2.8%. Economists had forecast CPI-median to remain at 2.6% and CPI-trim to be 2.8%. Citing progress in bringing down inflation, the central bank lowered its policy rate to 4.75% earlier this month and said decisions to ease further would be taken one meeting at a time. Its next meeting is on July 24 before which it will have the benefit of one more inflation reading, along with the GDP number for May and jobs report for June. But economists and analysts believe the BoC might want to slow down. "We suspect an abundance of caution will see the next move land in September, matching the timing of the first rate cut from the Federal Reserve," said Karl Schamotta, chief market strategist at Corpay. In May, grocery price growth accelerated for the first time since June 2023, Statscan said, noting that prices for groceries have risen 22.5% compared with May 2020. Annual energy price inflation slowed to 4.1% from 4.5% in April. Excluding volatile food and energy, prices rose 2.9% compared with a 2.7% rise in April. Overall, service prices increased 4.6% in May, compared with a 4.2% rise in April, while goods inflation remained at 1%. Mortgage costs, owing to higher interest rates, continued to rise but its pace slowed marginally to 23.3%. Rental inflation, however soared to 8.9% after slowing to 8.2% in April. Sign up here. https://www.reuters.com/markets/inflation-canada-unexpectedly-sped-up-may-clouding-july-rate-cut-chances-2024-06-25/

2024-06-25 12:55

Walmart falls after CFO flags Q2 as challenging Nvidia climbs after three-session sell-off Indexes: Dow down 0.76%, S&P up 0.39%, Nasdaq up 1.26% June 25 (Reuters) - The Nasdaq rallied 1.3% on Tuesday, buoyed by strength in Nvidia (NVDA.O) New Tab, opens new tab and other tech megacaps, while the Dow slipped as retailers weighed and investors waited for crucial inflation data due out this week. AI chip firm Nvidia climbed 6.8%, bouncing back after a three-session sell-off, and the broader chip sector outperformed with the Philadelphia Semiconductor index (.SOX) New Tab, opens new tab adding 1.8%. Chips were among the biggest boosts for the S&P 500 technology index's (.SPLRCT) New Tab, opens new tab recovery from a three-day slide while companies such as Alphabet (GOOGL.O) New Tab, opens new tab, up 2.7%, and Meta Platforms (META.O) New Tab, opens new tab, rising 2.3%, were the biggest boosts to the communication services index (.SPLRCL) New Tab, opens new tab. The rest of the S&P 500's 11 major industry sectors were much weaker by comparison on Tuesday in contrast with the prior day's session when previously lagging sectors such as energy (.SPNY) New Tab, opens new tab and utilities (.SPLRCU) New Tab, opens new tab were the biggest gainers. "Seeing the tech stocks perking up has been a key driver" for Tuesday's market, said Emily Roland, co-chief investment strategist at John Hancock Investment Management. She added that after a few days of weakness, "investors that have scooped up some of those names today were looking for a better entry point." Potentially adding to the bias for megacaps was the Conference Board's survey, which showed U.S. consumer confidence easing slightly in June amid worries about the economic outlook. Its consumer confidence index fell to 100.4 from a downwardly revised 101.3 in May. "In an environment where economic growth is potentially decelerating, which we're seeing signs of, that would tend to benefit higher-quality stocks that have less sensitivity to the economic cycle," Roland said. The Dow Jones Industrial Average (.DJI) New Tab, opens new tab fell 299.05 points, or 0.76%, to 39,112.16, the S&P 500 (.SPX) New Tab, opens new tab gained 21.43 points, or 0.39%, to 5,469.30 and the Nasdaq Composite (.IXIC) New Tab, opens new tab gained 220.84 points, or 1.26%, to 17,717.65. The Dow pulled back from a one-month high hit on Monday and home improvement retailer Home Depot (HD.N) New Tab, opens new tab was its biggest percentage decliner, dropping 3.6% Creating some jitters was retail giant Walmart (WMT.N) New Tab, opens new tab, whose shares fell 2.2% after its CFO flagged the second quarter as the "most challenging quarter" at the NYSE 2024 European Investor Conference in London. After three straight sessions of gains, the Dow Jones Transport Average (.DJT) New Tab, opens new tab closed down 0.8% after falling around 1.6% earlier in the day. Freight rail company Norfolk Southern (NSC.N) New Tab, opens new tab was its second-biggest decliner after an analyst cut the price target and the National Transportation Safety Board reviewed a derailment last year and recommended safety changes. However, after dipping 0.05% in the regular session, transport heavyweight FedEx (FDX.N) New Tab, opens new tab rallied 15% in after-the-bell trading when it forecast 2025 profit above analysts' estimates. It said it expected planned cost reductions to deliver margin gains, even as revenue remains challenged by lackluster demand for parcel shipping. The most anticipated economic data due this week is the personal consumption expenditures (PCE) price index - the Fed's preferred inflation gauge - on Friday. Spirit AeroSystems (SPR.N) New Tab, opens new tab shares fell 3.96% to $31.76 after a media report on Monday said Boeing (BA.N) New Tab, opens new tab offered to buy the airplane fuselage maker in a mostly stock deal valuing its key supplier at about $35 per share. Boeing shares also fell 2.2%. Cruise operator Carnival Corp (CCL.N) New Tab, opens new tab advanced 8.7% after raising its annual profit forecast for the second time this year. Declining issues outnumbered advancers by a 1.62-to-1 ratio on the NYSE where there were 122 new highs and 87 new lows. On the Nasdaq, 1,681 stocks rose and 2,589 fell as declining issues outnumbered advancers by a 1.54-to-1 ratio. The S&P 500 posted 20 new 52-week highs and 4 new lows while the Nasdaq Composite recorded 45 new highs and 178 new lows. On U.S. exchanges 10.01 billion shares changed hands compared with the 11.90 billion moving average for the last 20 sessions. Sign up here. https://www.reuters.com/markets/us/nasdaq-futures-rise-nvidia-stabilizes-after-ai-stocks-rout-2024-06-25/