2024-06-06 23:05

Weekly jobless claims rise more than expected Nvidia dips, back to third most valuable company Nio falls after logging Q1 net loss Lululemon up on topping quarterly estimates on China demand Indexes: Dow up 0.20%, S&P down 0.02%, Nasdaq down 0.09% NEW YORK, June 6 (Reuters) - The S&P 500 and Nasdaq composite finished a shade lower on Thursday ahead of a key labor market report, retreating from record highs reached in the previous session. The Dow was slightly higher. Benchmark S&P 500 (.SPX) New Tab, opens new tab and Nasdaq (.IXIC) New Tab, opens new tab rose early and reached fresh intraday record highs, but then they retreated as technology stocks (.SPLRCT) New Tab, opens new tab dipped. Utilities (.SPLRCU) New Tab, opens new tab and industrials (.SPLRCI) New Tab, opens new tab were the two other sectors that dragged the S&P 500 lower. The gainers were led by consumer discretionary (.SPLRCD) New Tab, opens new tab and energy (.SPNY) New Tab, opens new tab. Nvidia (NVDA.O) New Tab, opens new tab fell 1.1% and was back to being the world's third most valuable company the day after it jumped ahead of Apple (AAPL.O) New Tab, opens new tab to take second place. Investors will watch Friday's crucial U.S. nonfarm payrolls report. The weekly jobless claims report was the latest data to indicate labor market easing, which could allow the Federal Reserve begin cutting interest rates. The European Central Bank delivered its first interest rate cut since 2019. "It's a little bit of a pause before non-farm," said Bill Strazzullo, chief market strategist at Bell Curve Trading in Boston. "It's not unusual. We had a big day yesterday and today people are getting their positions where they want to be before the payroll number," he said. The Dow Jones Industrial Average (.DJI) New Tab, opens new tab rose 78.84 points, or 0.20%, to 38,886.17, the S&P 500 (.SPX) New Tab, opens new tab lost 1.07 points, or 0.02%, to 5,352.96 and the Nasdaq Composite (.IXIC) New Tab, opens new tab lost 14.78 points, or 0.09%, to 17,173.12. Gains in Nvidia and other AI-related players have largely driven Wall Street's rally this year, with the chipmaker accounting for roughly a third of the S&P 500's year-to-date gains of over 12%. Traders see a 68% chance of a September rate reduction, according to the CME's FedWatch tool, and have priced in about two cuts this year, as per data from LSEG. Forecasters polled by Reuters also expect two cuts. "We are in an information vacuum between now and tomorrow," said Thomas Hayes, chairman at Great Hill Capital in New York. "But by and large we have entered a global, coordinated central bank easing policy in the West that excludes Japan, which will be tightening," he added. Shares of GameStop (GME.N) New Tab, opens new tab surged 47% after the online stock influencer known as "Roaring Kitty" posted on YouTube that he would hold a livestream on Friday. Lululemon Athletica (LULU.O) New Tab, opens new tab rose 4.8% after beating expectations for first-quarter profit and revenue on Wednesday. U.S.-listed shares of NIO (9866.HK) New Tab, opens new tab dropped 6.8% after the Chinese electric vehicle maker posted a quarterly net loss. Five Below (FIVE.O) New Tab, opens new tab slumped 10.6% after the discount store operator trimmed its annual net-sales forecast. Advancing issues outnumbered decliners by a 1.05-to-1 ratio on the NYSE. On the Nasdaq, 1,729 stocks rose and 2,445 fell as declining issues outnumbered advancers by a 1.41-to-1 ratio. The S&P 500 posted 25 new 52-week highs and 5 new lows while the Nasdaq Composite recorded 57 new highs and 110 new lows. Total volume of shares traded across U.S. exchanges was about 10.4 billion, compared with the 12.7 billion average over the last 20 trading days. Sign up here. https://www.reuters.com/markets/us/futures-subdued-after-tech-rally-nvidia-continues-climb-2024-06-06/

2024-06-06 22:28

June 6 (Reuters) - Saudi Arabia is set to raise more than $11.2 billion after pricing its offering of Aramco (2222.SE) New Tab, opens new tab stock toward the lower end of the targeted range, the Wall Street Journal reported on Thursday. Saudi Aramco's bankers have told investors it plans to price the shares at 27.25 Saudi riyals, or $7.27 each, according to the report. The stake sale, a first since Aramco's record-setting IPO in 2019, was announced last week in a landmark deal to help fund Crown Prince Mohammed bin Salman's plan to diversify the economy. The stock closed at 28.30 Saudi riyals on Thursday. Sign up here. https://www.reuters.com/business/energy/saudi-arabia-set-raise-more-than-112-bln-aramco-stock-offering-wsj-2024-06-06/

2024-06-06 21:52

Canadian dollar's link to U.S. trade inflationary Resurgence in housing demand could spike prices Wage growth outpacing CPI, could fuel inflation OTTAWA, June 6 (Reuters) - The Bank of Canada will need to play very safe in its easing cycle, despite widespread expectations of an immediate July rate cut, and take a much slower path due to the high risks from persistent inflationary pressures, economists said. Canada's currency depends heavily on trade with the United States, high housing demand poses a constant threat of a surge in house prices and the country's wage inflation has been ticking faster than the rate of growth of consumer prices. Economists and analysts said if a faster interest rate cut triggers inflationary pressures due to these factors, it could reverse the success seen on inflation. "I think they (BoC) should be and they still are very concerned about whether they will get inflation down all the way," said Pedro Antunes, chief economist at Conference Board of Canada, an independent think tank. The BoC cut its interest rate for the first time in more than four years to 4.75% on Wednesday, from an over two-decade high of 5%. The announcement fueled expectations for a back-to-back rate cut in July and further reduction to 4% this year. But if the bank moves ahead with consecutive cuts, it could trigger inflation. One of the primary worries is how interest rates pan out in the United States. This impacts the fight against inflation, Antunes said. Canada's currency depends heavily on trade with the U.S., which accounts for two-thirds of its imports. When interest rates in Canada fall while they stay steady in the U.S., its currency weakens and imports tend to get costlier, driving inflation. "We will see very slow declines in Canada (interest rates), in part, because of the kind of position that the Fed is still in," Antunes said. Another factor the BoC should bear in mind, economists say, is to bring back a flood of housing demand as interest rates come down, said Craig Alexander, president of Alexander Economic Views, an independent economic research organization. Canada's housing demand has mostly been sidelined due to high interest rates, but that has not changed the acute need to build houses at a rapid pace. It will need to expand its housing stock by an average of 315,000 units every year between now and 2030 to meet this demand, according to an analysis by the Royal Bank of Canada. Phil Soper, the CEO of Royal LePage, a real estate developer, told Reuters on Wednesday that the cut in interest rates would spark activity and put upward pressure on home prices in the second half. Wages are also often cited by economists and analysts as a factor that could spur inflation once again. The average hourly wage growth for permanent employees grew at 4.8% even as consumer price growth slowed to 2.7% in April. "People are getting paid more. What's wrong with that? The problem is that we have a declining productivity in Canada per capita," said Brooke Thackray, research analyst with Global X, a fund management company. Even though wage growth is considered a lagging indicator - that is, it does not predict a future trend - it nonetheless feeds directly into inflation numbers amid negative productivity, he said. Bank of Canada Governor Tiff Macklem also acknowledged during his policy decision announcement that housing prices and wage growth could spell trouble for his efforts to tame inflation and bring down policy rates. "I think it's going to be a very protracted rebalancing of monetary policy," said Alexander from Alexander Economic Views. Sign up here. https://www.reuters.com/markets/rates-bonds/bank-canada-should-opt-cautious-rate-cuts-economists-say-2024-06-06/

2024-06-06 21:48

June 7 (Reuters) - A look at the day ahead in Asian markets. An interest rate decision in India and Chinese trade figures are the main events for investors in Asia on Friday, rounding off a tumultuous week globally that saw an explosion of political volatility in the emerging world, heightened worries over U.S. growth and world stocks hitting new highs. Asian markets go into Friday mostly on the front foot - the MSCI Asia ex-Japan index is up nearly 3% this week, the Hang Seng tech index is up almost 5% and, despite the political fireworks, Indian stocks are in the green. Capital is flowing into emerging markets. Japanese and Chinese stocks are struggling more, however. Expectations of tighter monetary policy and a stronger yen are capping the Nikkei, while economic gloom continues to weigh heavily on Chinese equities. The Reserve Bank of India is widely expected to keep its key interest rate on hold at 6.50% on Friday, before cutting just once later in the year, probably in the fourth quarter, according to a Reuters poll. With near-8% growth and above-trend inflation, there is little urgency for the RBI to begin cutting rates yet. Nor is there much incentive to move before the Fed, especially with the rupee languishing around record lows. But with the Bank of Canada and European Central Bank lowering rates this week, following the Swiss National Bank, the global 'higher for longer' mantra may be losing its oomph. U.S. rates traders are now fully pricing in 50 basis points of easing from the Fed this year - one quarter-point cut likely coming in September, before the Presidential election, and two by the Dec. 17 to 18 policy meeting. The 2-year U.S. Treasury yield has now fallen six days in a row. That's the longest uninterrupted decline going back to late last year, according to Tradeweb data, or back to March 2020, according to Reuters/Refinitiv indicative pricing. The one G7 central bank going the other way is the Bank of Japan. Governor Kazuo Ueda said the central bank should reduce its huge bond purchases as it moves toward an exit from massive monetary stimulus, reinforcing his resolve to steadily scale back its nearly $5-trillion balance sheet. The remarks keep alive expectations the central bank could embark on a full-fledged tapering of its bond buying as early as its policy meeting next week. But having driven yields higher this year, Japanese Government Bond bears have gone into retreat as global yields have fallen - the two-year and 10-year JGB yields have slipped every day this week. China's trade data, meanwhile, will be closely watched for signs that activity is picking up after months of disappointing numbers. Exports are seen rebounding strongly, rising 6.0% year-on-year, but import growth is expected to halve to 4.2%. Here are key developments that could provide more direction to markets on Friday: - India interest rate decision - China trade (May) - Japan household spending (April) Sign up here. https://www.reuters.com/markets/asia/global-markets-view-asia-graphic-pix-2024-06-06/

2024-06-06 21:29

June 6 (Reuters) - Canada's biggest oil sands producers support a paying a tax on carbon but see a proposed federal oil and gas emissions cap as unnecessary legislation, the companies' CEOs told lawmakers in Ottawa on Thursday. Executives from Suncor Energy (SU.TO) New Tab, opens new tab, Imperial Oil (IMO.TO) New Tab, opens new tab, Cenovus Energy (CVE.TO) New Tab, opens new tab, Enbridge (ENB.TO) New Tab, opens new tab and Shell (SHEL.L) New Tab, opens new tab appeared via videolink before a House of Commons committee to answer questions on their efforts to cut emissions. Prime Minister Justin Trudeau's Liberal government is planning to introduce a cap on oil and gas emissions but faces stiff opposition from producers, who argue the legislation is unnecessary because Canada already has regulatory incentives in place, including a price on carbon produced by industry. "I do support a price on carbon across the economy because I believe that will drive the innovation, the economic incentives on all of our part to continue to improve our business," said Suncor CEO Rich Kruger. "I fundamentally worry that a cap on emissions, the way it's constructed, will be a cap on production," he added. The oil and gas sector is Canada's highest-polluting industry, accounting for more than a quarter of all emissions, and in 2022 made record profits as oil prices soared during Russia's invasion of Ukraine. Climate campaigners say companies should invest more of their profits in decarbonization. Kruger's opposition to a cap was echoed by Imperial CEO Brad Corson and Cenovus CEO Jon McKenzie. "Canada has some of the most stringent regulatory requirements of any place in the world, which is why when it comes to something like an emissions cap, I think it's unnecessary," said Corson. "There's plenty of other vehicles and requirements in place." Climate advocates said oil sands companies lack comprehensive strategies to decarbonize despite repeated promises to do. "Today's testimony is a reminder that additional regulation is urgently needed if Canada's oil and gas sector is going to meaningfully reduce its emissions," said Marie-Christine Bouchard, oil and gas program director at the Pembina Institute. PATHWAYS ALLIANCE Canada is the world's fourth-largest oil producer, with most of its 5 million barrels per day of production coming from the northern Alberta's oil sands. Suncor, Imperial and Cenovus are part of the Pathways Alliance, a group of oil sands producers proposing to invest C$16 billion ($11.70 billion) in a carbon capture and storage (CCS) project. However, progress has been slow and the group is seeking more public funding from federal and provincial governments before making a final investment decision. "Before we can put shovels in the ground, we need many government permits and approvals and we need regulatory certainty and co-investment commitments," McKenzie said. The CEOs supported keeping a price on carbon pollution, which would help provide a revenue stream for Pathways' sequestered emissions, although McKenzie said it needed to be universally applied and could not target just one industry. Carbon pricing has become a political issue after federal opposition leader Pierre Poilievre vowed to scrap Canada's consumer carbon tax, prompting questions over the future of the industrial carbon price. Poilievre's Conservatives are leading the Liberals in polls ahead of an expected election next year. The session was at times combative, with some lawmakers criticising the CEOs for the high emissions intensity of their crude. Laurel Collins of the left-leaning New Democratic Party asked Suncor's Kruger how he slept at night given the threat of climate change. "I appreciate your desire to create headlines, to point fingers that attempt to villanize the industry," Kruger said in response. Sign up here. https://www.reuters.com/business/energy/ceo-canadas-suncor-says-he-support-price-carbon-2024-06-06/

2024-06-06 21:28

SANTIAGO, June 6 (Reuters) - Rothschild & Co has formally started to assess candidates to partner with Chile's state-run miner Codelco on a major new lithium project slated to begin production in 2030, according to documents seen by Reuters on Thursday. A four-page "investment highlight" document from Codelco and Rothschild, dated June 2024, and accompanying memo, reveal new details of Codelco's plans for the site, now dubbed "Project Paloma." Codelco aims to begin construction in early 2027 and launch production in early 2030. A first phase would include production of 20,000 metric tons of lithium carbonate equivalent (LCE) a year via evaporation ponds at an initial capital cost of $1.2 billion. A second phase will target 30,000 metric tons of LCE a year via direct lithium extraction (DLE), with initial capital cost of $1.1 billion. The potential use of DLE, which has yet to work at commercial scale, is being evaluated for 2033, the document showed. Codelco previously said it had hired Rothschild to lead the search for a partner and that it hoped to conclude the process by the first quarter next year, but did not disclose whether the effort had formally started, or how the bank would go about seeking interest in the project. "Rothschild & Co is currently qualifying participants in the process and is inviting certain parties to review the information contained herein," states the investment document. It also calls the project a "unique opportunity to partner with Codelco in developing Chile's next world-class lithium project." Chile is the world's second-biggest lithium producer, with output from SQM (SQMA.SN) New Tab, opens new tab and Albemarle (ALB.N) New Tab, opens new tab of the battery metal needed for electric vehicles. The government has tasked Codelco with spearheading efforts to boost its role in lithium production, and reached a milestone last week as the copper giant announced final plans for a tie-up with SQM in the Salar de Atacama from 2025 to 2060. The Maricunga project represents a major new challenge as Codelco takes on lithium production virtually from scratch. Despite Chilean President Gabriel Boric's announcement last year that he would mandate the use of DLE, Codelco's plans for a decade of traditional evaporation ponds in Maricunga suggests the technology is still far from production expectations laid out by Boric and industry leaders. Speaking at a press conference on Thursday evening to discuss plans for the SQM partnership, Codelco Chairman Maximo Pacheco said 30 to 40 companies have shown interest in the Maricunga project, including international firms. Codelco is looking for a partner with financial backing, experience in partnerships, and knowledge of lithium, but will not outline specific criteria, he said. "We've designed a selection system to be extraordinarily open and flexible," he said. "We're going to put all the elements into an equation, and leave it up to the interested parties to make proposals." Sign up here. https://www.reuters.com/markets/commodities/chiles-codelco-targeting-2030-production-maricunga-lithium-site-document-2024-06-06/