2024-06-24 21:56
June 25 (Reuters) - A look at the day ahead in Asian markets. The wave of profit-taking in U.S. Big Tech and AI stocks appears to be gathering momentum, which could depress investor sentiment and risk appetite in Asia on Tuesday even if it is offset by a rotation into cheaper, beaten down sectors. The Dow's rise to a one-month high on Monday as the Nasdaq declined for a third day will be well-received, of course. But ahead of U.S. inflation figures on Friday, which is also the last trading day of the quarter, caution may prevail. Otherwise, the macroeconomic backdrop to the start of the week seems fairly supportive for Asian and emerging markets - Treasury yields edged lower on Monday and the dollar had its biggest fall in nearly two weeks. Tuesday's regional economic calendar is light, with the highlights being consumer price inflation from Malaysia, service sector producer prices from Japan, the latest measures of consumer confidence in South Korea and Australia, and trade figures from Hong Kong. The market tone across Asia on Tuesday could be set by the tempest brewing in tech. Nvidia shares slumped 6.7% on Monday, bringing their decline in the last three days to 16%, and weighing heavily on semiconductor and tech shares more broadly. Taiwan's benchmark index New Tab, opens new tab lost nearly 2% on Monday, its biggest fall in two months, and blue chip issue Taiwan Semiconductor Manufacturing Co lost more than 3%. And that was before Nvidia's slump on Tuesday. Hong Kong's Hang Seng Tech index scraped a two-month low on Monday before recovering most of these losses to end down only 0.6%. Again, the weakness in U.S. tech and semiconductor stocks on Monday - especially the accelerated selloff at the close - doesn't bode well for the sector in Asia on Tuesday. Back in the macro world, minutes of the Bank of Japan's last meeting on Monday showed that Japanese policymakers discussed a near-term interest rate hike, with one calling for an increase "without too much delay" to help get inflation back down. Currency traders, however, seem unimpressed. The yen appreciated a bit on Monday but only marginally, and it remains within touching distance of the 160 per dollar level that recently pushed Japanese authorities to spend billions of dollars in yen-buying intervention. The next big inflation number from Japan will be Tokyo consumer price inflation on Friday. This is usually seen as a good barometer of nationwide price pressures, and with the yen so weak and oil prices up 12% in the last three weeks, officials may be getting twitchy. Annual inflation in Malaysia, meanwhile, is expected to have accelerated slightly to 1.9% in May from 1.8% in April, according to a Reuters poll of economists. Here are key developments that could provide more direction to markets on Tuesday: - Japan services PPI (May) - Malaysia CPI (May) - Australia consumer sentiment (June) Sign up here. https://www.reuters.com/markets/asia/global-markets-view-asia-graphic-pix-2024-06-24/
2024-06-24 21:52
NEW YORK, June 24 (Reuters) - John Hess, CEO of Hess Corp (HES.N) New Tab, opens new tab, has joined the board of Goldman Sachs (GS.N) New Tab, opens new tab as independent director, the Wall Street firm said on Monday. He is the latest addition to the board after senior banking executive Tom Montag joined as an independent director last year. He will also become a member of the Goldman board's compensation, governance and risk committees, the statement said. Hess Corp did not offer a comment on the matter. Since 1995, Hess has served as chief executive officer of Hess Corp, which is being sold to Chevron (CVX.N) New Tab, opens new tab in a $53 billion deal, which is still under review by U.S. regulators. The deal is also embroiled in an arbitration battle with Exxon Mobil (XOM.N) New Tab, opens new tab and CNOOC (0883.HK) New Tab, opens new tab, Hess' partners in a lucrative Guyana oil-production joint venture. Goldman Sachs is advising Hess on the deal. "Advising companies and their management teams is a core part of our business, and we’re thrilled to have John Hess, a long-standing client, join our board," Goldman said in an email. Hess will retire from his company roles and join the board of directors of Chevron. He has also served as an independent director at KKR & Co (KKR.N) New Tab, opens new tab and Dow Chemical in the past. Goldman Sachs CEO David Solomon said in the statement the company's board, management team and shareholders will benefit from Hess' nearly 30 years of experience as a public company CEO. Sign up here. https://www.reuters.com/business/hess-ceo-join-goldman-sachs-board-independent-director-2024-06-24/
2024-06-24 21:11
BUENOS AIRES, June 24 (Reuters) - Argentina entered a technical recession in the first quarter of the year, official data showed on Monday, and job losses mounted amid a tough austerity drive by libertarian President Javier Milei who is prioritising restoring fiscal order. The South American country's gross domestic product (GDP) shrank 2.6% in the first quarter of the year versus the final quarter of 2023, the second consecutive quarter-on-quarter contraction, the usual definition of a recession. The quarter marks the first full period under Milei who took office in December after winning a shock election last year, when he often campaigned with a chainsaw as a blunt illustration of his plans to slash spending and hit a zero fiscal deficit. The official INDEC statistics agency also released jobs data, which showed the jobless rate rising to 7.7% in the first quarter, up from 5.7% at the end of last year. That meant some 300,000 newly unemployed people since the previous quarter. Triple-digit inflation and the recession have hit consumers hard and hurt sales of products like beef, while Milei's spending cuts have seen state infrastructure projects halted New Tab, opens new tab and major job losses in sectors such as construction. Milei, an economist and former pundit, has argued that the country needs to get its finances in order following years of fiscal deficits that have led to regular defaults on sovereign debts and hurt the country's reputation with global investors. Since taking office, he has spurred markets with his steely focus on a fiscal surplus, which he has so far managed to achieve. Bonds and equities have rallied hard, but the economy has taken a hit, with poverty and homelessness New Tab, opens new tab rising. He argues that the tough fiscal medicine is necessary and that the economy will start to turn around. The INDEC data showed that year-over-year, the economy dipped 5.1% in the first quarter, slightly beating analyst forecasts of a 5.25% contraction. Private consumption slid 6.7% on an annual basis in the quarter, while public consumption fell 5%, data showed. Imports also sank by 20.1%, but exports climbed 26.1%. Sign up here. https://www.reuters.com/world/americas/argentina-jobless-rate-jumps-technical-recession-confirmed-2024-06-24/
2024-06-24 21:06
June 24 (Reuters) - Bitcoin dropped 7.8% to $59,215 at 8:50 pm GMT on June 24. Sign up here. https://www.reuters.com/technology/bitcoin-drops-78-below-60000-2024-06-24/
2024-06-24 20:19
HOUSTON, June 24(Reuters) - A shortage of skilled labor and nagging inflation from strong wage growth on the U.S. Gulf Coast are pressuring liquefied natural gas (LNG) developers and delaying some projects from reaching a financial go-ahead. There are five LNG plants under development in Texas and Louisiana and 16 others on the drawing board in the U.S. looking to secure investment and customers. The five under construction would add a combined 86.6 million metric tons per annum (MTPA) of the superchilled gas, enough to keep the U.S. as the world's largest exporter for years to come. With labor costs jumping as much as 20% since 2021, busting construction budgets and squeezing projected returns for those firms still trying to attract new investors, the fate of some of the early projects has become less certain. Work at Golden Pass LNG, one of the largest U.S. projects, largely halted after its main contractor ran $2.4 billion over the original budget and filed for bankruptcy. Sempra LNG (SRE.N) New Tab, opens new tab has revisited selecting Bechtel Corp to build its Cameron LNG expansion project to reduce costs, and it has reduced its stake in a Texas project, Port Arthur LNG, on higher construction costs. NextDecade (NEXT.O) New Tab, opens new tab, which is building the first phase of its $18 billion Rio Grande LNG export terminal, achieved a greenlight after recruiting new investors that reduced its original investors' stake after engineering, procurement and construction (EPC) costs rose, analysts said. EXTRA PAY Behind the struggles are costs that skyrocketed after the COVID-19 pandemic. Contractors have raised wages for skilled workers by as much as 20% in three years, and in some cases are having to pay a per diem rate to retain them, said Travis Woods, president of Gulf Coast Industrial Group, which represents over 1,500 contractors in Texas and Louisiana. "Welders, pipefitters and electricians for sure are demanding more to keep them on the job. Per diem in some cases are paid to everyone on the project no matter where they live," Woods said. The five plants had on site in excess of 20,000 employees up until Golden Pass LNG's prime contractor Zachry sent home 4,000 workers, according to regulatory filings by the companies and company statements over the last three months. Venture Global LNG, which has Zachry helping build its Plaquemines plant in Louisiana, said the modular nature of the projects has "insulated us from the significant labor and inflationary challenges that have impacted other projects,” said a spokesperson. Data from the U.S. Bureau of Labor and Statistics show wages for construction workers in the oil and gas pipeline sectors increasing in Louisiana, where many of the new U.S. plants are being built, by 19% in 2023 compared to 2022. "Welders and pipefitters are being offered up to $60 an hour and a sign-on bonus, if they agree to stay through completion," added Woods. Data from LNG research and consulting firm Rapidan Energy Group show that between 2021 and 2023 EPC contracts for new LNG plants increased between 18% and 25%. Bechtel Corp, which is the largest U.S. LNG plant contractor and a Zachry rival, declined comment on the situation. The Reston, Virginia-based contractor has been the preferred builder for top U.S. LNG exporter Cheniere Energy (LNG.N) New Tab, opens new tab, delivering projects using largely lump-sum, turnkey EPC contracts. EPC contractors may look to reduce the scope of their contracts and make more elements cost reimbursable, to lessen the risks, according to Poten & Partners, a LNG shipping and consulting company. "EPC contractors may now be factoring in a 30% to 40% increase into their lump-sum turnkey contracts," it said in a note last month. Sign up here. https://www.reuters.com/business/energy/rising-us-labor-costs-threaten-derail-new-lng-projects-2024-06-24/
2024-06-24 20:12
Cajon del Maipo, CHILE, June 24 (Reuters) - Dozens of people were stranded after avalanches blanketed mountain towns east of Chile's capital Santiago and blocked roads, according to authorities. Heavy rain and snowstorms from the last few days have left large piles of snow throughout the province of Maipo, in central Chile. Two small towns in the Cajon del Maipo mountain range have been cut off as well as a ski center, due to road closures caused by snow slides, police and provincial government authorities said. "We are doing everything possible to reach them and take them to a safe area," said Alejandra Cortes, a federal government delegate to Cordillera province. She added that in the next few days, authorities will attempt to set off a controlled avalanche to clear snow if it does not occur naturally first. At Lagunillas Ski Center, 33 people were trapped, including eight children, Lieutenant Colonel Bernardo Leiva of Chile's national police said. "No people were injured (at the ski resort), and food has been brought to them," he said. A second avalanche blocked an access road in the mountains, leaving nine people trapped in the town of Banos Morales and 20 stuck in Lo Valdes, according to Cortes' office. Both towns are awaiting snow plows to clear roads, where 10 meters (33 feet) of snow built up after the avalanche. More rain and possibly snow are expected through Tuesday. Sign up here. https://www.reuters.com/world/americas/avalanches-leave-dozens-stranded-chile-mountain-towns-2024-06-24/
