2025-08-05 20:56

Aug 5 (Reuters) - Shale producer Devon Energy (DVN.N) , opens new tab narrowly missed Wall Street expectations for second-quarter profit on Tuesday, as weaker commodity prices offset a rise in output. The company also announced two new natural gas supply agreements as it looks to diversify its portfolio amid growing demand for the heating fuel. Sign up here. Devon will supply 50 million cubic feet per day (mmcfd) of natgas to an undisclosed buyer, primarily for LNG exports over a 10-year period. The second agreement was inked with the CPV Basin Ranch Energy Center for the supply of 65 mmcfd for a seven-year term. On Monday, Coterra Energy (CTRA.N) , opens new tab also announced a deal to supply 50 mmcfd of natgas to the Permian-based energy center. Devon's quarterly performance was hurt by over a 20% fall in Brent crude prices from a year earlier, which came under pressure from growing market uncertainty. Its average realized price fell to $62.97 per barrel of oil produced during the quarter from $78.95 a barrel last year. The impact of the weak prices was, however, cushioned by over a 15% rise in oil production, which came in at 387,000 bpd. Meanwhile, natural gas production jumped 22% to 1.39 billion cubic feet per day. The U.S. oil and gas producer plans to boost its annual free cash flow by $1 billion by the end of 2026 by reducing drilling and completion costs, as well as by improving operating margins. It reduced its current-year capital expenditure forecast by $100 million and now expects it to range between $3.6 billion and $3.8 billion. The company also expects current-year oil production to be in the range of 384,000-390,000 bpd, compared with a prior view of 382,000-388,000 bpd. The Oklahoma City-based company posted an adjusted profit of 84 cents per share for the second quarter, compared with the analysts' estimate of 85 cents apiece, according to data compiled by LSEG. https://www.reuters.com/business/energy/devon-energy-misses-second-quarter-profit-estimates-weak-oil-prices-2025-08-05/

2025-08-05 20:52

Traders boost bets on Fed easing moves extending through 2026 Goldman Sachs expects Fed to deliver three consecutive rate cuts Investors still concerned about tariff impact Kugler's replacement could mean dovish Fed, weak dollar NEW YORK, Aug 5 (Reuters) - The U.S. dollar rose on Tuesday, but remained within sight of Friday's lows, with the market still consolidating after a weak jobs report that boosted bets of a rate cut by the Federal Reserve next month. Investors also focused on President Donald Trump's nominations to the Federal Reserve Board, including his choice for commissioner of the Bureau of Labor Statistics. Sign up here. "Where we are now is essentially settling after the (payrolls) data and you have a Fed that is ... not in a rush to cut and not really seeing any signs of inflation, or maybe just a little bit of inflation," said Eugene Epstein, head of trading and structured products, North America, at Moneycorp in New Jersey. "So we're basically in this purgatory between now and the CPI (consumer price index) print next week. And the dollar is consolidating ... waiting for that data." Wall Street economists expect the underlying CPI for July to have edged up to 0.3% and 3.0% on a monthly and year-on-year basis, respectively, according to a Reuters poll. Apart from economic data, the market is also keeping an eye on the changing of the guard at the Fed, which could transform it into a more dovish central bank, in line with what Trump wants. Trump on Tuesday said he would announce decisions soon on a short-term replacement for Fed Governor Adriana Kugler, who resigned last Friday, including his pick for the next Fed chair. He ruled out U.S. Treasury Secretary Scott Bessent as a contender to replace current chief Jerome Powell, whose term ends in May 2026. Bessent wanted to remain in his current job, Trump said, adding that the White House is looking at four candidates to replace Powell. "You can make the argument that a Kugler replacement is dovish for rates, and in turn, means a weaker U.S. dollar going forward," Moneycorp's Epstein noted. In addition to Kugler's exit, Trump fired BLS Commissioner Erika McEntarfer on Friday as well after data showed weaker-than-expected employment growth in July and massive downward revisions to the prior two months' job counts. He said on Sunday he would announce a new BLS commissioner within three to four days. WEAKENING SERVICES SECTOR Tuesday's data, meanwhile, had little impact on the currency market. U.S. services sector activity unexpectedly showed a flat outcome in July, with little change in orders and a further softening in employment even as input costs climbed by the most in nearly three years. The Institute for Supply Management said on Tuesday its non-manufacturing purchasing managers index (PMI) slipped to 50.1 last month from 50.8 in June. Economists polled by Reuters had forecast the services PMI would rise to 51.5. In afternoon trading, the euro was last flat at against the dollar at $1.1569. That pushed the dollar index , which measures the U.S. currency against six counterparts with the euro as the biggest component, up 0.2% at 98.81, after touching a one-week low earlier in the session at 98.609. Amid a soft U.S. jobs report, rate futures are now pricing in a 91% chance of the Fed cutting rates at next month's meeting, compared with 35% a week earlier, according to the CME's FedWatch. They also indicate 60 basis points (bps) of cuts by end-December and 130 bps in rate declines by October 2026, 30 bps more than the levels seen on Friday before the U.S. jobs data. Goldman Sachs, on the other hand, expects the Fed to deliver three consecutive 25-bp rate cuts starting in September, with a 50 bp move possible if the next jobs report shows a further rise in unemployment. In other FX pairs, the dollar rose 0.4% to 147.66 yen , after minutes of a June policy meeting showed a few Bank of Japan board members said the BOJ would consider resuming rate increases if trade frictions de-escalate. The focus, however, remains on tariff uncertainties, after the latest duties imposed by Trump on imports from dozens of countries last week increased worries about the health of the global economy. The 15% tariff that European Union goods face when entering the U.S. is all-inclusive, a senior EU official said on Tuesday. The Swiss franc was slightly lower on the day at 0.8077 per dollar, after dropping 0.5% in the previous session. Switzerland is looking to make a "more attractive offer" in trade talks with Washington, to avert a 39% U.S. import tariff on Swiss goods that threatens its export-driven economy. https://www.reuters.com/world/middle-east/us-dollar-gains-market-awaits-fed-board-appointee-inflation-data-2025-08-05/

2025-08-05 20:47

Aug 5 (Reuters) - A wildfire in southern France’s Aude region near the Spanish border has scorched around 4,500 hectares (11,100 acres) of forest, the fire brigade said late on Tuesday, as hundreds of firefighters battled to bring the blaze under control. More than 1,250 firefighters have been deployed to the scene, Colonel Alexandre Jouassard, spokesperson for the civil protection agency, told BFMTV. Sign up here. President Emmanuel Macron said on X the fire was progressing and that "all the nation’s resources were mobilized." Two people were injured in the fire, including one seriously, Lucie Rosech, the deputy prefect of Aude, told BFMTV. https://www.reuters.com/business/environment/big-wildfire-rages-southern-france-2025-08-05/

2025-08-05 20:44

US services sector activity flatlined last month Fed rate cut odds rise to 94% after weak US jobs data Oil falls again as demand outlook darkens NEW YORK/LONDON, Aug 5 (Reuters) - Wall Street stock indexes fell on Tuesday as investors weighed tariff concerns and weaker than expected U.S. economic data, while equities in Europe and Asia notched gains. U.S. services sector activity unexpectedly flatlined in July with little change in orders and a further weakening in employment even as input costs climbed by the most in nearly three years, highlighting the uncertainty over the impact of President Donald Trump's tariff policy on businesses. Sign up here. U.S. Treasury yields were mostly higher, but pared gains after data showed stalling activity in the services sector. The Dow Jones Industrial Average (.DJI) , opens new tab fell 0.14% to 44,111.74, the S&P 500 (.SPX) , opens new tab gave up 0.49% to 6,299.19 and the Nasdaq Composite (.IXIC) , opens new tab dropped 0.65% to 20,916.55. Investors digested comments about tariffs from several companies, including Caterpillar (CAT.N) , opens new tab which warned of an up to $1.5 billion hit in 2025. The U.S. dollar steadied as investors raised bets the Federal Reserve would act to prop up the world's largest economy. Gold prices turned higher, while oil retreated on rising OPEC+ supply and worries of weaker global demand. On Monday, U.S. shares had rallied on generally positive earnings reports and increasing bets for a September rate cut from the Fed after disappointing jobs data last week. The pan-European STOXX 600 (.STOXX) , opens new tab index edged up 0.15%, Most regional bourses also traded higher, echoing the strength across Asia markets, where MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) , opens new tab closed up 0.77%. European earnings season was in full swing, with Diageo (DGE.L) , opens new tab jumping 4.9% after forecasting flat 2026 sales despite U.S. tariffs. "The removal of the uncertainty is one factor that is helping European markets, even if the tariff rate is probably a bit higher than what market participants or European politicians would have expected or hoped to see," said Amelie Derambure, senior multi-asset portfolio manager at Amundi. "The question is whether bad news is bad news (economy slowing down) or it's good news (Fed moving towards rate cuts). Our view is that it depends on how bad is the data and what's priced in," Jefferies strategist Mohit Kumar said. Trump said the United States would place a "small tariff" on pharmaceutical imports before hiking it to 150% within 18 months and eventually to 250% in an effort to boost domestic production. The dollar index , which measures the greenback against a basket of currencies including the yen and the euro, rose 0.15% to 98.78. The euro was up 0.02% at $1.1572. Odds for a September rate cut now stand at about 94%, according to CME Fedwatch, from a 63% chance seen on July 28. Market participants see at least two quarter-point cuts by the end of this year. The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, rose 3.9 basis points to 3.72%, from 3.681% late on Monday. News that Trump could fill a governorship position at the Fed early added to worries about politicization of interest rate policy. Trump again threatened to raise tariffs on goods from India from the 25% level announced last month due to its Russian oil purchases, while New Delhi called his attack "unjustified" and vowed to protect its economic interests. "Whether the threat of secondary sanctions on India's financing of Russia is the core goal remains to be seen," strategists at ING said. "Or indeed, this move may be increased U.S. leverage on India to open up its domestic economy to agricultural imports or commitments to buy U.S. energy instead." Oil prices dropped for a fourth day, with both benchmarks settling at their lowest in five weeks as concern mounted about economic growth and the potential for oversupply. Brent crude futures settled 1.63% lower to $67.64 a barrel, while U.S. crude finished down 1.7% at $65.16. The second-quarter U.S. earnings season is winding down, but investors are still awaiting results this week from companies including Walt Disney (DIS.N) , opens new tab and Caterpillar (CAT.N) , opens new tab. Data on Tuesday showed business activity in the euro zone grew at a slightly faster pace in July than in June, but remained sluggish. A separate UK survey showed British businesses recorded their largest drop in new orders in almost three years in July and cutting staff by the most in six months. Data from Asia's two biggest economies showed resilience in their service sectors. In Japan, the S&P Global final services purchasing managers' index (PMI) to 53.6 in July from 51.7 in June for the strongest expansion since February. China's services activity last month at its fastest pace in more than a year. Spot gold prices rose 0.19% to $3,379.12 an ounce, as U.S. gold futures settled 0.2% higher at $3,434.70. https://www.reuters.com/world/china/global-markets-wrapup-7-graphic-2025-08-05/

2025-08-05 20:42

TSX ends up 2% at 27,570.08 Posts biggest gain since April 11 Eclipses last Tuesday's record closing high Materials sector jumps 5.6% TORONTO, Aug 5 (Reuters) - Canada's main stock index rose on Tuesday to a record high, with the materials and technology sectors leading broad-based gains as optimism rose that the U.S. Federal Reserve would cut interest rates in September. The S&P/TSX composite index (.GSPTSE) , opens new tab ended up 549.65 points, or 2%, at 27,570.08, after three straight days of declines. It was the biggest gain since April 11 and eclipsed the record closing high that was posted last Tuesday. Sign up here. The index was playing catch-up with Wall Street after a Canadian market holiday on Monday. Investors see a roughly 95% chance the Fed will ease next month after the release of downbeat U.S. jobs data on Friday. "People see (the U.S. unemployment numbers) as being the rationale for a reduction in interest rates at the Fed, and that's essentially positive for stock markets," said Thomas Caldwell, chairman at Caldwell Securities. "Earnings are coming across fairly well and so the world is moving on, but there's this undercurrent of what will be the longer-term damage of tariffs and this upending of world trade." Canada's merchandise trade deficit widened in June to C$5.9 billion ($4.24 billion) as imports grew faster than exports due to a one-time high-value oil equipment import. Canada will provide up to C$1.2 billion ($870 million) to help softwood lumber producers deal with U.S. countervailing and anti-dumping duties, Prime Minister Mark Carney said. The material sector (.GSPTTMT) , opens new tab, which includes lumber producers as well as fertilizer companies and metal mining shares, jumped 5.6% as the price of gold edged higher. Technology (.SPTTTK) , opens new tab was up 3%, with e-commerce platform Shopify Inc (SHOP.TO) , opens new tab adding more than 7% ahead of the release of its quarterly earnings report on Wednesday. All ten major sectors on the TSX posted gains, with both industrials and heavily weighted financials adding 1.2%. https://www.reuters.com/markets/europe/tsx-notches-biggest-gain-four-months-metal-mining-shares-jump-2025-08-05/

2025-08-05 20:41

Aug 5 (Reuters) - The Trump administration is considering whether to terminate a $7 billion grant program designed to help power low and moderate-income households with solar energy, two sources briefed on the matter said. The Environmental Protection Agency could as soon as this week terminate the grants, which were awarded in 2024 during the administration of former President Joe Biden, to 60 nonprofit groups, tribes and states, said the sources. One of sources said they were briefed by a person inside the EPA and both of them spoke on condition of anonymity. Sign up here. EPA's deliberations were first reported by the New York Times. EPA said it had not made a final decision on the program. "With the passage of the One Big Beautiful Bill, EPA is working to ensure Congressional intent is fully implemented in accordance with the law," an EPA spokesperson said. The EPA's "Solar for All" program was funded by Biden's 2022 climate change law, the Inflation Reduction Act. Most of the grantees are state energy agencies that are developing programs to deploy rooftop and community solar arrays. President Donald Trump's administration has sought to roll back federal support for solar and wind energy, calling them expensive and unreliable. Three Solar for All grantees contacted by Reuters said they had not received official word from EPA about the status of their grants. "This program remains fully aligned with congressional intent and delivers critical benefits to the rural and frontline communities we serve," Hilary Shohoney, chief of staff at the non-profit Bonneville Environmental Foundation, which received $130 million in Solar for All grants for solar projects in Montana, Idaho and Wyoming. "Solar for All also aligns with the President’s commitment to 'unleash American energy' by boosting local generation, strengthening energy independence, and creating family-wage jobs in rural communities." https://www.reuters.com/business/energy/us-epa-could-cancel-7-billion-grants-solar-energy-sources-say-2025-08-05/