2024-05-08 21:49

May 9 (Reuters) - A look at the day ahead in Asian markets. Asian markets are set for a sluggish open on Thursday, with mixed U.S. corporate earnings, a firm dollar, and an upward drift in U.S. bond yields dampening investors' appetite for risky assets. The Japanese yen is back in the spotlight, its latest bout of weakness prompting warnings from Tokyo on Wednesday that, so far at least, seem to have gone unheeded. The dollar is on the front foot and gunning for 156.00 yen. There are a few potential market-moving economic indicators and events on Thursday for investors to get their teeth into, including Chinese trade data, a monetary policy decision from Malaysia, and first quarter GDP figures from the Philippines. Asian markets won't get much steer from Wall Street, which ended mixed on Wednesday. One source of relief may be oil - Brent crude printed a two-month low below $82 a barrel, and although inflation worries are running high, oil is down around 10% in recent weeks. Japan's financial heavy hitters were out on Wednesday warning that the yen's weakness could trigger action from policymakers. Bank of Japan Governor Kazuo Ueda said the central bank could raise rates again, and Finance Minister Shunichi Suzuki voiced "strong concern" over the negative impact of a weak yen and repeated Tokyo's readiness to intervene in the FX market. The warnings have had no effect and the dollar was changing hands at 155.50 yen late on Wednesday, up on the day and back to where it was at the BOJ's April 26 policy announcement. It is now only two yen away from where it was when Japan carried out its second suspected round of intervention on May 1. On the data front, figures from Beijing are expected to show Chinese imports and exports swung to year-on-year growth in April. But export growth is expected to be modest as factory owners wrestle with weak overseas demand and overcapacity. Trade relations between China and the West remain fraught, with the latest twist coming from U.S. tech giant Intel saying its sales would take a hit after the U.S. revoked some of the chipmaker's export licenses for a customer in China. Bank Negara Malaysia will leave its key interest rate at 3.00% for as sixth consecutive meeting and keep it there at least until 2026, despite a weakening currency and a steady inflation outlook, according to a Reuters poll of economists. Figures from Manila, meanwhile, are expected to show that the Philippines' economy expanded at an annual rate of 5.9% in the first quarter, but quarter-on-quarter growth is expected to halve to 1.0% from 2.1% in the October-December period. The Japanese earnings season rolls on, with major companies including Nissan, Nippon Steel, Panasonic and Softbank reporting full-year 2024 results on Thursday. Here are key developments that could provide more direction to markets on Thursday: - China trade (April) - Malaysia interest rate decision - Philippines GDP (Q1) Sign up here. https://www.reuters.com/markets/asia/global-markets-view-asia-graphic-pix-2024-05-08/

2024-05-08 21:39

May 8 (Reuters) - Online brokerage Robinhood Markets (HOOD.O) New Tab, opens new tab beat estimates for first-quarter profit on Wednesday, thanks to robust crypto trading volumes and rate hikes that boosted its net interest revenue. The approval of the first spot bitcoin ETFs in the U.S. in January boosted sentiment towards the crypto industry, which had been bruised by several high-profile collapses over the past two years. The company however disclosed earlier this week that its U.S. crypto trading arm received a so-called Wells notice from the SEC over tokens traded on its platform. The notice is issued when the regulator plans to bring enforcement action against a company. "The Wells Notice clouds the future of this income stream," said Lauren Ashcraft, financial services analyst at Emarketer. But companies generally have an opportunity to respond to a Wells Notice and rectify situations, so Robinhood "still potentially has a chance to maintain this significant source of revenue," she added. Robinhood said it was disappointed with the notice but would contest the SEC's claims and, if necessary, fight the regulator in court. "We've run our crypto business very carefully. We've been very selective about the coins we offer, and we've not offered services that have been criticized by the SEC," CFO Jason Warnick said. STRONG TRADING IN OPTIONS, EQUITIES Trading in equities and options also held up, thanks to hopes of a soft landing that have encouraged retail traders to wade back into the market, allowing the Menlo Park, California-based company to rake in 59% higher transaction-based revenue. The momentum has continued in the second quarter despite some uncertainty around the timing of rate cuts by the Federal Reserve, Warnick said. Net interest revenue jumped 22% to $254 million, helped by the Federal Reserve's policy tightening that has allowed companies to earn more from their deposits and bond investments. Rate hikes also let brokers like Robinhood, which allow traders to borrow against their investments, charge higher interest on such loans. The company reported a profit of $157 million or 18 cents per share for the three months ended March 31, compared with expectations of 6 cents per share, according to LSEG. It had reported a loss of $511 million or 57 cents per share in the same quarter last year. Net revenues soared 40% to $618 million. Shares climbed nearly 3% after the bell. Sign up here. https://www.reuters.com/business/finance/robinhood-swings-profit-year-ago-loss-2024-05-08/

2024-05-08 21:09

May 8 (Reuters) - Goldman Sachs on Wednesday said they no longer expect OPEC+ to announce a partial unwind of voluntary production cuts in June. The bank said inventories have recently surprised to the upside, and as a result, their model now estimates only a 37% chance of a production increase decision in June. "While our interpretation of OPEC+ communication is that no final decision has been made, we now expect Saudi crude supply to remain flat at 9 mb/d (million barrels per day) in July (vs. 9.2 previously)" the Wall Street bank added. Goldman still expects Brent crude futures to remain in a range of $75 to $90 a barrel in most scenarios and forecasts they will average $82 in 2025, it said in a note. Brent settled below $84 a barrel on Wednesday. Russian Deputy Prime Minister Alexander Novak said on Tuesday that there had been no discussions about an oil output increase by OPEC+. Sign up here. https://www.reuters.com/business/energy/goldman-sachs-sees-opec-unlikely-raise-production-june-meeting-2024-05-08/

2024-05-08 20:59

VIRE, France, May 8 (Reuters) - It takes only four cars from the scrapyard - or the steel from about 50 washing machines - to make the 2,000 torches needed for the Paris 2024 Olympic and Paralympic Games, but the process requires a specific savoir faire. Six tons of steel were melted by manufacturing corporation ArcelorMittal, a Paris 2024 official partner, before being shaped into 0.7-millimetre plates that were shipped to the Normandy factory of French silverware and cutlery company Guy Degrenne. There, it is laser-cut, welded and assembled by a couple of dozen workers who delivered the torches at the end of January, marking the end of a nine-month process. "It's a bit like my baby, our baby," Delphine Moulin, Paris 2024 director of celebration, told Reuters amid the sounds of metal being cut, bent, polished and sprayed with micro-particles of steel. The result is a slender-looking torch, with a wavy touch which represents the Mediterranean Sea and oceans that carried the Olympic flame from Greece and will take it to the French overseas territories. "We wanted it to be unique. You can see that it's different from the usually flared shape of the Olympic torch," Moulin added. The torch, which is 70 centimetres high and weighs 1.5 kilos, is water and windproof as it is designed so the flame can withstand a sustained wind of 20kph and gusts at 60kph. "It also went through a crash test, resisting a three-metre fall," said ArcelorMittal's Franck Wasilewski, the project manager. "It requires so much attention to details, first to make the perfect steel. You don't use the same kind of steel to make rails and to make this torch," ArcelorMittal France president Eric Niedziela said. "It is also our pride to have this French product made with our partners (Guy Degrenne), their savoir faire is unique." Some 1,500 torches will be used for the Olympic relay, with the other 500 going to the Paralympics' relay. There will be 11,000 torch bearers to bring the flame to its final destination in Paris, meaning the same torch will be carried by almost 10 different people. "This is a sustainable option," Moulin said. Paris 2024 officials and ArcelorMittal have been tight-lipped on the budget of the torches' fabrication, declining to give an estimate of the overall cost. The Games will be held from July 26-Aug. 11 and the Paralympics run from Aug. 28-Sept. 8. Sign up here. https://www.reuters.com/sports/olympics/france-fashions-slender-paris-2024-torch-raw-steel-2024-05-08/

2024-05-08 20:56

May 8 (Reuters) - The International Monetary Fund said on Wednesday it had reached a staff-level agreement with Democratic Republic of Congo on the final review of a $1.5 billion loan programme, noting the need for Congo to manage properly funds from a revised mining deal. This takes Congo one step closer to completing an IMF programme for the first time. Previous agreements have been derailed by issues including a lack of transparency in its vast mining sector. "Performance under the (three-year) program has been generally positive, with most quantitative objectives met and key reforms implemented, albeit at a slow pace," the Fund said in a statement. Once approved by the IMF board, the agreement will allow for the disbursement of a final tranche of around $200 million. The IMF noted that the world's top supplier of cobalt - the mineral used in smartphones - and the third-largest producer of copper must account for the positive impact of a recently amended Sicomines joint venture with Chinese companies in its revised budget law for 2024. "In addition, mechanisms will need to be put in place or reinforced to ensure the proper use and governance of these funds," the Fund said. President Felix Tshisekedi pushed for the revision of the 2008 infrastructure for minerals deal with Sinohydro Corp and China Railway Group to bring more benefits for Congo. An agreement was signed in March. "The IMF is concerned about the mechanisms for using this money and has asked for it to be paid into the public treasury accounts rather than being managed by an agency as has been done in the past," a finance ministry official, who requested anonymity, told Reuters. Publishing mining contracts was also one of the conditions of the IMF programme and last week Congo shared long-awaited details of the revised Sicomines terms, which include around $7 billion of infrastructure investments from the Chinese side provided that copper prices remain high. Under the previous version of the agreement, only $822 million of $3 billion promised to infrastructure investments was disbursed, according to a 2023 report by Congo's state auditor. The revised deal still includes terms which Congolese and international civil society organisations see as disadvantageous to Congo. These include Sicomines's exemption from paying taxes until 2040. Sign up here. https://www.reuters.com/world/africa/imf-dr-congo-reach-agreement-final-review-loan-deal-2024-05-08/

2024-05-08 20:49

May 8 (Reuters) - U.S. prosecutors are examining whether Tesla (TSLA.O) New Tab, opens new tab committed securities or wire fraud by misleading investors and consumers about its electric vehicles’ self-driving capabilities, three people familiar with the matter told Reuters. Tesla’s Autopilot and Full Self-Driving systems assist with steering, braking and lane changes - but are not fully autonomous. While Tesla has warned drivers to stay ready to take over driving, the Justice Department is examining other statements by Tesla and Chief Executive Elon Musk suggesting its cars can drive themselves. U.S. regulators have separately investigated hundreds of crashes, including fatal ones, that have occurred in Teslas with Autopilot engaged, resulting in a mass recall by the automaker. Reuters exclusively reported the U.S. criminal investigation into Tesla in October 2022, and is now the first to report the specific criminal liability federal prosecutors are examining. Investigators are exploring whether Tesla committed wire fraud, which involves deception in interstate communications, by misleading consumers about its driver-assistance systems, the sources said. They are also examining whether Tesla committed securities fraud by deceiving investors, two of the sources said. The Securities and Exchange Commission is also investigating Tesla's representations about driver-assistance systems to investors, one of the people said. The SEC declined to comment. Tesla did not respond to a request for comment. Last October, it disclosed in a filing that the Justice Department had asked the company for information about Autopilot and Full Self-Driving. The Justice Department declined to comment. The probe, which is not evidence of wrongdoing, could result in criminal charges, civil sanctions, or no action. Prosecutors are far from deciding how to proceed, one of the sources said, in part because they are sifting through voluminous documents Tesla provided in response to subpoenas. Reuters could not determine the specific statements prosecutors are reviewing as potentially illegal. Musk has aggressively touted the prowess of Tesla’s driver-assistance technology for nearly a decade. Tesla videos demonstrating the technology that remain archived New Tab, opens new tab on its website New Tab, opens new tab say: "The person in the driver’s seat is only there for legal reasons. He is not doing anything. The car is driving itself." A Tesla engineer testified in 2022 in a lawsuit over a fatal crash involving Autopilot that one of the videos, posted in October 2016, intended to show the technology’s potential and did not accurately portray its capabilities at the time. Musk nevertheless posted the video on social media, writing: “Tesla drives itself (no human input at all) thru urban streets to highway streets, then finds a parking spot.” In a conference call with reporters in 2016, Musk described Autopilot as “probably better” than a human driver. During an October 2022 call, Musk addressed a forthcoming FSD upgrade he said would allow customers to travel “to your work, your friend’s house, to the grocery store without you touching the wheel.” Musk is increasingly focused on self-driving technology as Tesla's car sales and profit slump. Tesla recently slashed costs through mass layoffs and shelved plans for a long-awaited $25,000 model that had been expected to drive sales growth. “Going balls to the wall for autonomy is a blindingly obvious move,” the billionaire executive posted on his social-media platform X in mid-April. Tesla shares, down more than 29% so far this year, surged in late April when Musk visited China and made progress toward approvals to sell FSD there. Musk has repeatedly promised self-driving Teslas for about a decade. "Mere failure to realize a long-term, aspirational goal is not fraud," Tesla lawyers said in a 2022 court filing. LEGAL CHALLENGES Prosecutors scrutinizing Tesla’s autonomous-car claims are proceeding with caution, recognizing the legal hurdles they face, the people familiar with the inquiry said. They will need to demonstrate that Tesla’s claims crossed a line from legal salesmanship to material and knowingly false statements that unlawfully harmed consumers or investors, three legal experts uninvolved in the probe told Reuters. U.S. courts previously have ruled that “puffery” or “corporate optimism” regarding product claims do not amount to fraud. In 2008, a federal appeals court ruled that statements of corporate optimism alone do not demonstrate that a company official intentionally misled investors. Justice Department officials will likely seek internal Tesla communications as evidence that Musk or others knew they were making false statements, said Daniel Richman, a Columbia Law School professor and former federal prosecutor. That is a challenge, Richman said, but the safety risk involved in overselling self-driving systems also “speaks to the seriousness with which prosecutors, a judge and jury would take the statements.” FATAL CRASHES Tesla’s claims about Autopilot and FSD have also drawn scrutiny in regulatory investigations and lawsuits. Safety regulators and courts have raised concerns in recent months that corporate messaging about the technology - including the brand names Autopilot and Full Self-Driving - have imbued customers with a false sense of security. In April, the Washington State Patrol arrested a man on suspicion of vehicular homicide after his Tesla, with Autopilot engaged, struck and killed a motorcyclist while the driver looked at his phone, police records show. In a probable-cause statement, a trooper cited the driver’s “admitted inattention to driving, while on autopilot mode ... putting trust in the machine to drive for him.” In Washington state, a driver remains "responsible for the safe and legal operation of that vehicle" regardless of its technological capabilities, a state patrol spokesperson told Reuters. The same month, the U.S. National Highway Traffic Safety Administration launched an investigation into whether a Tesla recall of more than 2 million vehicles in December adequately addressed safety issues with Autopilot. NHTSA declined to comment. After this story was published, U.S. Senator Edward Markey, a Massachusetts Democrat and longstanding critic of the company's driver-assistance systems, said in a statement posted on X that he was "glad to see" NHTSA and Justice Department officials "getting tough on Tesla over these dangers." The recall followed a long-running probe opened by regulators after cars with Autopilot engaged repeatedly crashed into vehicles at first-responder emergency scenes. Regulators subsequently examined hundreds of crashes where Autopilot was engaged and identified 14 deaths and 54 injuries. Tesla disputed NHTSA's findings but agreed to the recall, which employed over-the-air software updates intended to alert inattentive drivers. The NHTSA investigation found “a critical safety gap between drivers’ expectations” of Tesla’s technology “and the system’s true capabilities,” according to agency records. “This gap led to foreseeable misuse and avoidable crashes.” Sign up here. https://www.reuters.com/business/autos-transportation/tesla-autopilot-probe-us-prosecutors-focus-securities-wire-fraud-2024-05-08/