2025-08-28 21:02

ORLANDO, Florida, Aug 28 (Reuters) - TRADING DAY Making sense of the forces driving global markets Sign up here. By Jamie McGeever, Markets Columnist Wall Street rose on Thursday as investors looked favorably on tech despite a mixed reaction to Nvidia's results, while the prospect of U.S. rate cut next month from a more dovish Fed pushed the dollar lower against nearly every major and emerging currency in the world. More on that below. In my column today, I look at the rotation out of tech stocks and into small caps that accelerated in August, and ask whether it can continue into September. If you have more time to read, here are a few articles I recommend to help you make sense of what happened in markets today. Today's Key Market Moves Today's Talking Points: * U.S. GDP resilience Second-quarter U.S. GDP growth was unexpectedly revised up to an annualized 3.3% from 3.1% and PCE inflation in the quarter was revised slightly lower to 2.5% from 2.6%. On the margins, this may point to more of a 'Goldilocks' scenario and temper some of the 'stagflation' fears that continue to swirl. Does this alter Fed expectations? Probably not - there are some key data before the September 17 decision, starting with July PCE inflation on Thursday, that will have much bigger sway. But it does show that the impact from tariffs on activity and prices hasn't been properly felt yet. * Big government Contrary to what we were told on the campaign trail and led to believe with Elon Musk's 'DOGE' moment in the Washington sun, the Trump administration is taking a very active role in many aspects of U.S. economic, policymaking and industrial life. From taking stakes in big companies like Intel and others to letting Nvidia sell its H20 chips to China in exchange for 15% of those sales, and from trying to stuff the Fed board with loyalists to targeting law firms and academic institutions, the administration's footprint seems to be expanding, not shrinking. * Yuan steps beyond The Chinese yuan - onshore spot and offshore - leapt to its highest level against the U.S. dollar this year, precisely since November 6, the day after the U.S. election. The PBOC's USD/CNY fixing is on course for its biggest weekly move since September. Beijing is clearly steering the yuan higher, not lower, as many observers predicted would be its response to the economy's deflationary pressures and looming trade war with the U.S. Maybe Beijing is focusing more on bolstering domestic demand than exports? U.S. small caps quietly notch historic outperformance vs tech Amid the Federal Reserve drama and deluge of corporate earnings in August, one clear but overlooked trend emerged in U.S. equities: the rotation out of expensive tech stocks and into cheaper small caps. As the month draws to a close, the big question is whether this can continue. The Nasdaq 100 is currently on track for a monthly gain of 1.5% while the Russell 2000 small cap index is headed for a 7.3% rise, signaling an underperformance of 580 basis points for the tech-heavy index. According to Stuart Kaiser, head of equity trading strategy at Citi, that relative monthly performance for the Nasdaq 100 is in the bottom 5% since 1985. And if we look at ETFs, tech's underperformance looks even more striking. This month, the Invesco QQQ exchange-traded fund tracking the Nasdaq 100 is flat, while the iShares Russell 2000 ETF is up 7%. FED BOOST So what's responsible for this dramatic divergence? It may partly just reflect investors seeking to rebalance their concentrated and lopsided portfolios. But the split was clearly turbo-charged by Federal Reserve Chair Jerome Powell's Jackson Hole speech on August 22, when he opened the door to an interest rate cut next month. Manish Kabra, head of U.S. equity strategy at Societe Generale, says the Russell 2000 index's outperformance against the broader S&P 500 that day was the biggest since the U.S. election on November 6 last year that returned Donald Trump to the White House. Powell's dovish pivot is helping small caps outperform because these companies tend to benefit more from lower interest rates given that they rely on borrowing to grow and expand. Larger firms, especially 'Big Tech' megacaps, often have huge cash reserves and easier access to other sources of financing. To be sure, lower rates wouldn't just be good news for small caps. The rising tide of liquidity and investor sentiment would typically be expected to lift all boats, including the 'Magnificent Seven' megaships. As analysts at UBS point out, past equity bubbles have often been burst by rising interest rates, so a resumption of the central bank's easing cycle would appear to minimize that particular risk for high-priced tech stocks. But, regardless, small caps may still continue to get more of a Fed boost in the near term. AI DOUBTS Another catalyst for the rotation has been creeping doubts about AI's ability to deliver returns commensurate with the bubble-like frenzy surrounding the new technology. Tech stocks remain on the pricey side. That's justified, argue UBS analysts, by the potential revenue from AI-generated efficiencies, which they estimate could reach around $1.5 trillion a year globally. Others are less optimistic. If value creation on this massive scale fails to materialize, then tech companies will struggle to generate a return on the trillions of dollars of global capex expected in the coming years. That's why all eyes were on $4.4 trillion Nvidia's earnings on Wednesday. How investors interpret the global AI leader's results will help determine whether tech's underperformance continues into September. The company's revenue, profit and forecasts looked solid, but uncertainty surrounding the suspension of its business with China and skepticism around the revenue outlook are giving investors pause. UNDER THE RADAR For now, market momentum remains with smaller firms. Francis Gannon, co-CIO and managing director at Royce Investment Partners, calls it a "stealth summer" for small caps, the recent outperformance of which has gone "mostly unnoticed" amid the daily headlines centered on economic uncertainty, geopolitical worries, and new highs in the larger cap-led indices. Indeed, the Russell 2000 has yet to revisit last November's peak, while the Nasdaq and S&P 500 have been printing new highs for weeks. Whether or not small caps start hitting new records will likely be determined by what happens at the Fed. So the big macroeconomic events to watch next month will be the August employment report due on September 5, August CPI inflation data on September 11, and then, of course, the Fed's policy decision on September 17. Small caps have enjoyed a pleasant end to the summer. Let's see what happens when investors all get back to their desks next month. What could move markets tomorrow? Want to receive Trading Day in your inbox every weekday morning? Sign up for my newsletter here. Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles , opens new tab, is committed to integrity, independence, and freedom from bias. https://www.reuters.com/world/china/global-markets-trading-day-graphic-2025-08-28/

2025-08-28 21:01

WASHINGTON, Aug 28 (Reuters) - The U.S. government's energy statistics arm, which has experienced staff cuts this year, said on Thursday it will delay publishing key energy data on uranium as well as its international outlook this year. The Energy Information Administration said its annual uranium marketing report that had been scheduled to come out in June will be published in September, while its International Energy Outlook may not be published until January, an agency spokesperson told Reuters. Sign up here. The EIA did not respond to questions about whether the staff cuts were the cause of the delays. The EIA has also proposed to discontinue a solar energy report on photovoltaic module shipments, according to a notice in the Federal Register, because it no longer believes the value of the data "exceeds the burden of collecting and publishing it." The EIA has lost a substantial number of staff due to federal job cuts and buyouts. Earlier this year, Reuters reported that the EIA was set to lose over 100 employees this year, around 40% of its workforce. Bloomberg first reported on the report delays. An EIA spokesperson said the International Energy Outlook likely won’t be published in 2025 but that "doesn’t necessarily mean we’re canceling this iteration" - just that it may publish it in January instead of October. The EIA publishes weekly, monthly and annual data on oil and gas output, crude and fuel inventories, and price forecasts, all used by traders and energy companies as indicators of supply and demand. The reports often move global oil prices. Sources told Reuters earlier this year that staffing losses would lead the EIA to change publication schedules and reassess which reports it would continue to publish. https://www.reuters.com/business/energy/us-energy-data-agency-after-staff-cuts-delays-reports-uranium-international-2025-08-28/

2025-08-28 20:41

The S&P/TSX composite index closed up 0.01% to 28,434.8 points The financial sector index lost 0.22% at market close Lenders TD Bank, CIBC follow peers, top analysts' forecast Aug 28 (Reuters) - Canada's main stock index closed almost flat on Thursday as investors took profits on gains seen over the last few days, especially in banking stocks after two days of robust gains. A higher trading in technology stocks and a late-hour reversal in energy shares helped to offset some losses from profit booking-led sales. The S&P/TSX composite index (.GSPTSE) , opens new tab edged slightly higher to close up 0.01% to 28,434..8 points, but still hovered around the record high level which was seen on Wednesday. "It's been a good run... so it looks like a little bit of profit taking," Martin Pelletier, senior portfolio manager at TriVest Wealth Counsel. The main index has given a return of 14.5% this year with over 4.5% coming in August alone after fears around U.S. tariffs receded, hopes of a trade deal increased and investors and analysts realized the worst-case scenario of the impact of tariffs on the Canadian economy is likely unfounded. The financials index (.SPTTFS) , opens new tab, representing top lenders in the country, gave up some gains after two solid days of upswing and the energy index, composed of oil and gas stocks, stayed volatile. Sign up here. The index, which accounts for almost a third of the weight in the composite index and is its biggest constituent, lost 0.22% at market close despite lenders TD Bank (TD.TO) , opens new tab and CIBC (CM.TO) , opens new tab topping analysts' expectations. Both the lenders beat profit forecasts and posted lower than expected loan loss provisions. Shares of CIBC were up roughly 2%, while TD Bank lost 4.5%. The Bank of Montreal (BMO.TO) , opens new tab, the Bank of Nova Scotia (BNS.TO) , opens new tab and the Royal Bank of Canada (RY.TO) , opens new tab had posted similar stellar earnings this week, boosting investor hopes the local economy was getting better after an initial impact of tariffs. Statistics Canada will release second quarter GDP number on Friday along with an advanced estimate for July growth and investors will be watching that closely to gauge the health of the economy in the coming months and prospects of a rate cut in Canada next month. The energy sector (.SPTTEN) , opens new tab was up 0.4% as gains in crude oil price later in the day reversed losses seen for most of the day in oil and gas shares, while consumer discretionary shares (.GSPTTCD) , opens new tab led the sectoral losses with a 0.08% fall. "The big question is, is this going to hold heading into September and October months which is seasonally a weaker period of time," said Pelletier, pointing to possible triggers for the TSX coming only from a trade deal between the U.S. and Canada. South of the border, Nvidia's shares were down 0.82% as uncertainty over its China businesses clouded a better-than-expected revenue forecast for the next quarter. https://www.reuters.com/markets/europe/toronto-stock-exchange-closes-almost-flat-investors-take-profit-2025-08-28/

2025-08-28 20:31

MOKOPANE, South Africa, Aug 28 (Reuters) - Valterra Platinum (VALJ.J) , opens new tab will start trial mining at an underground pit at its Mogalakwena open-pit mine in South Africa late next year, the general manager for the project said on Wednesday. Mogalakwena in Limpopo province, north of Johannesburg, is the world's largest open-pit platinum group metals (PGM) mine, comprising five open pits. The ore body of its Sandsloot pit, where the underground mine is being developed, has higher grades of ore. Sign up here. Platinum miners in South Africa have faced declining ore grades for years. To keep production going, companies have had to mine deeper underground, which makes operations more expensive and risky. The mine is the crown jewel of Valterra's portfolio, contributing about 50% of the company's PGM production. The project to develop the Sandsloot underground mine is a nod of confidence in the future of PGMs, used primarily in autocatalysts and jewellery. Prices of the white metals have mostly slid in the past two years, with demand hit by the rise of battery electric vehicles, which don't require them, leading miners to cut supply. In July, the company said it has begun the feasibility study for the underground project with a targeted completion and investment decision in the first half of 2027. "We're also envisioning a trial mining ...in the back end of 2026," Stephan Nothnagel, General Manager of Mogalakwena underground mining studies told reporters during a media tour of the mine on Wednesday. "If it meets our capital allocation we will be able to truck the first ore out of the top part of the ore body to the surface," Nothnagel said, adding that ramping up to a 3.6 to a 4.5 million tonne a year operation was possible beyond 2030. With the underground mine, Valterra hopes to achieve its targeted 10% to 50% overall increase in Mogalakwena concentrate production, it said in July. Martin Poggiolini, executive head of corporate strategy, and Agit Singh, Valterra's head of processing operations, said the company is scaling up demand across existing markets such as hydrogen production and fuel-cell electric vehicles and creating demand in new segments. "So we have really good confidence in the fundamentals around the PGM sector in the short term and certainly in the longer term," Singh said. https://www.reuters.com/world/africa/valterra-platinum-plans-start-underground-trial-mining-late-2026-2025-08-28/

2025-08-28 20:25

US naval buildup targets Latin American drug cartels Venezuela's Maduro condemns US military presence as a threat Aug 28 (Reuters) - Tensions between the United States and Venezuela are rising amid a large U.S. naval buildup in the Southern Caribbean and nearby waters, which U.S. officials say aims to address threats from Latin American drug cartels. U.S. President Donald Trump has made cracking down on drug cartels a central goal of his administration, part of a wider effort to limit migration and secure the U.S. southern border. Sign up here. While U.S. Coast Guard and Navy ships regularly operate in the Southern Caribbean, this buildup is significantly larger than usual deployments in the region. A U.S. official, speaking on the condition of anonymity, said on Thursday that seven U.S. warships, along with one nuclear-powered fast attack submarine, were either in the region or were expected to be there in the coming week. Venezuelan President Nicolas Maduro has denounced the moves. The Pentagon has not indicated publicly what exactly the U.S. mission will be, but the Trump administration has said it can now use the military to go after drug cartels and criminal groups and has directed the Pentagon to prepare options. Venezuela on Thursday complained to U.N. Secretary-General Antonio Guterres about the U.S. naval buildup, accusing Washington of violating the founding U.N. Charter. "It's a massive propaganda operation to justify what the experts call kinetic action - meaning military intervention in a country which is a sovereign and independent country and is no threat to anyone," Venezuela's U.N. Ambassador Samuel Moncada told reporters after meeting with Guterres. On Thursday, the White House said Trump was ready to use "every element of American power to stop drugs from flooding into our country." "Many Caribbean nations and many nations in the region have applauded the administration's counter drug operations and efforts," White House press secretary Karoline Leavitt told reporters. The Trump administration designated Mexico's Sinaloa Cartel and other drug gangs, as well as the Venezuelan criminal group Tren de Aragua, as global terrorist organizations in February. Part of the buildup is the USS San Antonio, USS Iwo Jima, and USS Fort Lauderdale. The ships are carrying 4,500 service members, including 2,200 Marines, sources have told Reuters. The U.S. military has also been flying P-8 spy planes in the region to gather intelligence, officials have said, though they have operated in international waters. "Our diplomacy isn't the diplomacy of cannons, of threats, because the world cannot be the world of 100 years ago," said Maduro, whose government said last week it would send 15,000 troops to states along its western border with Colombia to combat drug trafficking groups. Maduro has also called for civil defense groups to train each Friday and Saturday. Maduro's government regularly accuses the opposition and foreigners of conspiring with U.S. entities such as the CIA to harm Venezuela, accusations the opposition and the U.S. have always denied. It characterizes sanctions as "economic war." https://www.reuters.com/world/americas/us-venezuela-tensions-rise-us-warships-arrive-southern-caribbean-2025-08-28/

2025-08-28 20:20

WASHINGTON, Aug 28 (Reuters) - The Federal Aviation Administration plans to cancel leases on its satellite offices in the Washington area as it consolidates its operations and moves its headquarters staff into a building housing the U.S. Transportation Department. FAA Administrator Bryan Bedford said in an email to staff seen by Reuters the move would improve collaboration. "We will work more effectively when we're together, rather than spread across six different office locations," Bedford wrote. USDOT said Tuesday it plans to relocate thousands of FAA employees at its headquarters to the department's main office in Washington and consolidate agency IT and other systems. Sign up here. https://www.reuters.com/business/aerospace-defense/faa-plans-close-satellite-offices-washington-it-consolidates-operations-2025-08-28/