2025-11-12 22:05

ORLANDO, Florida, Nov 12 (Reuters) - U.S. tech shares stumbled again but the Dow climbed to a new high on Wednesday as investors geared up for an end to the U.S. government shutdown, while oil prices slumped on reports that crude supply will be higher than previously thought. More on that below. In my column today I look at why the end of the U.S. government shutdown won't lift the economic fog for some time. Indeed, some key indicators like the unemployment and CPI inflation rates for October may never be released. Sign up here. 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 * AI bursting with energy The scale of AI investment over the coming years is staggering enough when measured in dollars. It's equally staggering in terms of the power and energy required to run all these data centers. Can the demand be met? If so, what are the inflationary and economic impacts? Take the Stargate project. According to UniCredit, it will target 10 gigawatts of electrical power by 2029, the equivalent of ten medium-sized nuclear power plants. Morgan Stanley estimates total U.S. data center power demand through 2028 at 69 GW, but warns of a potential 44 GW shortfall, barring creative "time to power" solutions. * When QE is not QE It won't be long until the Fed starts buying bonds again to expand its balance sheet, says New York Fed president John Williams. The Fed skeptics and 'doomers' on financial social media say this is proof the Fed will never shake its addiction to quantitative easing, and inflation and dollar debasement are inevitable. Not really. These purchases would be part of a technical effort to ensure bank reserves are "ample", allowing the Fed to keep control over ultra short-term interest rates and money market liquidity. It would probably involve the purchase of T-bills, not long-dated bonds, and would have no implication for monetary policy. * Labour pains Pressure is mounting on UK Prime Minister Keir Starmer, and speculation is rife he may soon face an internal leadership challenge. His poll ratings have sunk since the 2024 election, unemployment is the highest in nearly six years, and later this month he is expected to break a manifesto pledge not to raise income tax. What does this mean for markets? The FTSE 100 is at a record high but sterling is at a two and a half year-low against the euro and teetering on a break below $1.30. The government will be desperate to get the bond market onside, and avoid a return of what TS Lombard economist Dario Perkins termed the "moron risk premium" during former PM Liz Truss's short-lived tenure. End of US government shutdown won't lift economic fog The end of the longest-ever U.S. government shutdown is in sight, which means official economic data will soon be forthcoming. But even if investors and the Federal Reserve are breathing a sigh of relief, the signals they should soon get might not be all that reliable. Some of the delayed figures should begin to trickle out quickly. Economists at Morgan Stanley predict the September nonfarm payrolls report will probably be released a few days after the shutdown ends, as the data has already been collected. It will be much longer before the October report lands, however, but when it does, it could be missing one key element: the unemployment rate. For the first time since 1948, the "household survey," from which the unemployment rate is calculated, was not carried out last month, according to Claudia Sahm, chief economist at New Century Advisors. Unlike the "establishment survey" which determines the monthly change in payroll jobs, subsequent household surveys don't ask about prior months. This data gap could factor into the U.S. central bank's interest rate decision in December, as Fed Chair Jerome Powell has made clear the labor market side of the central bank's dual mandate has weighed more heavily on recent policy decisions than inflation. To be sure, what employment data the Fed does have to go on is not painting a pretty picture. Based on private-sector data and the limited government figures available, economists at Goldman Sachs now reckon nonfarm payrolls declined by 50,000 in October. That would be only the second monthly drop since December 2020, and the biggest decline in more than five years. A report last week from global outplacement firm Challenger, Gray & Christmas showed planned layoffs soared to more than 150,000 in October, the highest reading for that month since 2003. The Fed, however, may put its rate cuts on hold as long as the official employment and other data remain incomplete and potentially unreliable. "What do you do if you're driving in the fog? You slow down," Powell told reporters last month after the end of the Fed's policy meeting. INFLATION DISTORTION The inflation and spending picture should remain hazy as well. Using the 2013 shutdown as a rough guideline, Morgan Stanley's economists believe October inflation and consumer spending data will not be released in time for the Fed's December 9-10 policy meeting, never mind the November figures. UBS economists are even more pessimistic about getting an update on CPI inflation. They say the October report, originally scheduled for Thursday, may not be released at all because the Bureau of Labor Statistics was closed for the full month, so price quotes were not collected. Getting even deeper into the CPI weeds, UBS notes that October data points are used as a base for some price index calculations that affect other months. That means November, December, and even April CPI inflation data could be distorted. Meanwhile, there's a chance that October retail sales data may also not be released before the Fed's next meeting. According to UBS economists, retail sales data are collected by mail, fax, or telephone, and aggregated within six business days of the reference month. Was September's data collected? "We could be without a key statistic for understanding a large chunk of U.S. GDP for some time," they wrote on Friday. Indeed, it's even possible that the unemployment and CPI inflation rates for October are never released, because the data were either partially collected or not collected at all. So while the wave of relief lifting most stock markets this week is understandable, the end of the shutdown should not be confused with a return to economic clarity. 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-2025-11-12/

2025-11-12 22:03

WASHINGTON, Nov 12 (Reuters) - President Donald Trump is committed to providing Americans a $2,000 check using money that has come into government coffers from Trump's tariffs, the White House said on Wednesday. White House press secretary Karoline Leavitt told reporters that Trump's staff is exploring how to go about making the plan a reality. Sign up here. https://www.reuters.com/world/us/trump-is-committed-2000-dividend-americans-using-tariff-income-white-house-2025-11-12/

2025-11-12 21:35

WASHINGTON, Nov 12 (Reuters) - Southwest Airlines (LUV.N) , opens new tab told employees Wednesday it is optimistic the Federal Aviation Administration will soon allow U.S. airlines to resume its full schedule. The FAA on Friday imposed 4% flight cuts at the 40 busiest U.S. airports, which is set to rise to 8% Thursday and 10% Friday unless the agency revises the order. "Once the shutdown ends, we’re optimistic that the FAA will allow airlines to resume normal operations within a few days," Southwest Chief Operating Officer Andrew Watterson told employees in a note seen by Reuters. Sign up here. https://www.reuters.com/sustainability/sustainable-finance-reporting/southwest-optimistic-faa-will-allow-full-schedule-within-days-after-shutdown-2025-11-12/

2025-11-12 21:00

Advanced Micro Devices gains after upbeat long-term forecasts IBM gains on new quantum computing chips Investors watch progress toward end of government shutdown S&P 500 +0.06%, Nasdaq -0.26%, Dow +0.68% Nov 12 (Reuters) - Wall Street's main indexes were mixed on Wednesday, with the Dow notching a record-high close and the Nasdaq losing ground as investors rotated out of pricey technology stocks while focusing on a likely end to a historic U.S. government shutdown. The House of Representatives was set to end the longest government shutdown in U.S. history, with a vote on a stopgap funding package to restart disrupted food assistance, pay hundreds of thousands of federal workers and revive a hobbled air traffic control system. Sign up here. Still, President Donald Trump will have to sign the compromise into law. "That should be positive from a sentiment standpoint, removing one of the key risks that's out there. As well, the proper functioning of the federal government and the FAA (Federal Aviation Administration) and airline system is important to the operation of the real economy," said Bill Northey, senior investment director at U.S. Bank Wealth Management, in Billings, Montana. Gains of about 3.5% each in Goldman Sachs (GS.N) , opens new tab and UnitedHealth Group (UNH.N) , opens new tab lifted the Dow to a record-high close for a second straight day. The index is up about 13% in 2025, lagging a nearly 17% rise in the S&P 500. Some of Wall Street's tech-related heavyweights lost ground. Amazon (AMZN.O) , opens new tab and Tesla (TSLA.O) , opens new tab fell about 2% each, Palantir (PLTR.O) , opens new tab lost 3.6% and Oracle (ORCL.N) , opens new tab declined 3.9%. AMD (AMD.O) , opens new tab rallied 9% after the chip designer unveiled a $100 billion data-center revenue target. "We have seen somewhat of a rotation away from Nasdaq-heavy leadership toward other areas of the market doing pretty well, like healthcare and financials," said Matt Stucky, chief equity portfolio manager at Northwestern Mutual. "A critical component for seeing markets broaden out is having earnings broaden out as well." SoftBank Group's $5.8 billion sale of its Nvidia (NVDA.O) , opens new tab stake jolted stock markets on Tuesday, stoking fears that the frenzy around artificial intelligence may have peaked, especially after recent warnings from Wall Street bank chiefs and a famed short seller. Nvidia's quarterly report next Wednesday will be a key test of investor sentiment around AI. The S&P 500 climbed 0.06% to end the session at 6,850.92 points. The Nasdaq declined 0.26% to 23,406.46 points, while the Dow Jones Industrial Average rose 0.68% to 48,254.82 points. Six of the 11 S&P 500 sector indexes rose, led by healthcare (.SPXHC) , opens new tab, up 1.36%, followed by a 0.9% gain in financials (.SPSY) , opens new tab. Volume on U.S. exchanges was light, with 17.2 billion shares traded, compared to an average of 20.5 billion shares over the previous 20 sessions. SHUTDOWN WEIGHS ON ECONOMY The government shutdown has weighed on the economy and created a data gap for both the Federal Reserve and traders, leaving them reliant on private economic indicators. Tuesday's weekly update of ADP's preliminary payroll figures showed private employers shedding an average of 11,250 jobs a week for the four weeks ended October 25, pointing to continued weakness in the labor market. Traders are pricing in a 65% probability of a quarter-point reduction at December's monetary policy meeting, CME Group's FedWatch tool showed. Atlanta Fed President Raphael Bostic said he would retire when his term ends in February, amid concerns of a push by Trump for more influence over the Fed. Advancing issues outnumbered falling ones within the S&P 500 (.AD.SPX) , opens new tab by a 1.5-to-one ratio. The S&P 500 posted 36 new highs and two new lows; the Nasdaq recorded 102 new highs and 103 new lows. https://www.reuters.com/world/asia-pacific/us-stock-futures-advance-investors-cheer-possible-end-federal-shutdown-2025-11-12/

2025-11-12 20:38

Cattle suppliers to Diamond Green Diesel linked to Amazon deforestation Airlines such as JetBlue and Southwest have bought fuel from Diamond Supporters say fuel made from beef tallow is unlikely to encourage illegal ranching XINGUARA, Sept. 16 (Reuters) - (This Sept. 16 story has been corrected to clarify that the commercial restrictions on an Amazon ranch owned by Antonio Luceno Barros were lifted after Barros submitted a plan to restore an illegally deforested area, and to note that Barros obtained an injunction suspending payment of fines, not because Brazil's environmental agency Ibama lifted restrictions due to the expiration of a statute of limitations, nor that Barros still owed over $3 million in fines, in paragraph 20) A Texas refinery that supplies green fuel to U.S. airlines has been purchasing animal fat from cattle raised on illegally cleared lands in the Amazon rainforest, according to a Reuters review of government tracking data, interviews and eyewitness accounts. Sign up here. Louisiana-based Diamond Green Diesel, a joint-venture between biofuels producer Darling Ingredients and petroleum refiner Valero Energy, has invested hundreds of millions of dollars into a refinery in Port Arthur, Texas that turns cattle fat - called tallow - into a cleaner alternative to petroleum-based jet fuel and diesel. Diamond Green Diesel is a major player in the U.S. sustainable fuels market. It has collected over $3 billion in U.S. tax credits for producing biofuels since 2022, according to filings. But interviews and documents show at least two Brazilian factories that supplied Diamond Green Diesel with tens of thousands of tons of cattle fat since 2023 are sourcing some of it from slaughterhouses that have bought animals from illegally deforested ranches in the Amazon rainforest. Carriers such as JetBlue (JBLU.O) , opens new tab and Southwest Airlines (LUV.N) , opens new tab, which struck deals with Valero to use the "green” jet fuel, can claim credit for lowering their emissions because Diamond Green Diesel's plant is certified under a United Nations agreement curbing the impact of aviation on the climate called CORSIA. The global market for sustainable jet fuel is small, about $2.9 billion in 2025 according to analysis firm SkyQuest Technology Group, compared to the $239 billion global market for conventional aviation fuel. But government incentives are expected to help the market grow exponentially, pumping more resources into the Brazilian cattle industry, the leading driver of the destruction of the Amazon rainforest. Pedro Piris-Cabezas, an economist at the nonprofit Environmental Defense Fund, said any additional demand “could result in the expansion of herds and directly or indirectly drive deforestation and forest degradation.” It could also violate Brazilian law. "Companies that profit from raw materials originating from a supply chain that involves deforestation, are also responsible for these illegalities," said Ricardo Negrini, a Brazilian federal prosecutor who has opened a number of government investigations into the cattle industry. Diamond Green Diesel, Darling Ingredients, Valero Energy, Southwest and JetBlue did not reply to multiple requests for comment, including detailed questions about the Brazilian tallow supply chain. To track the tallow trade from illegally deforested ranches in the Amazon to Diamond Green Diesel, Reuters partnered with the nonprofit investigative outlet Reporter Brasil, which helped review court documents that link slaughterhouses to the tallow plants, corporate filings, trade data, and government cattle tracking records. Reuters also interviewed over a dozen people involved in each step of the beef tallow supply chain, including traders, truck drivers, prosecutors, auditors and regulators. Diamond Green Diesel sources tallow from multiple countries, and Reuters was unable to determine how much of it came from ranches in illegally-cleared land in the Amazon. TAINTED CATTLE In 2022 Darling Ingredients CEO Randall Stuewe announced the $557 million acquisition of several plants in Brazil, including four in the Amazon region, that would supply “waste fats to be used in the production of renewable diesel and sustainable aviation fuel," according to a statement issued at the time. Reuters found one of those rendering plants in Para state, called Araguaia, sourced cattle fat from at least five meatpackers that failed a May 2025 audit conducted by federal prosecutors for slaughtering 20,000 cattle from illegally deforested areas. In 2023, Araguaia exported $4.4 million worth of beef tallow from the Amazon to Diamond Green Diesel, according to trade data from Import Genius. In June, a Reuters journalist saw a truck with an Araguaia logo inside the Sao Francisco slaughterhouse, which failed an audit for buying cattle from farms on illegally deforested land. The driver of the truck, who spoke on condition of anonymity, told Reuters he had been picking up carcasses at the Sao Francisco slaughterhouse and delivering them to the Araguaia plant for two years. Two other drivers and two Sao Francisco employees confirmed the slaughterhouse was an Araguaia supplier. Sao Francisco didn't confirm or deny that it is a supplier of the Araguaia plant. It said it has been cooperating with federal prosecutors since 2018 and that it hired an outside firm to monitor its supply chain. Sao Francisco sources some of its cattle indirectly from Vale do Paraiso, a farm that had been blocked from grazing cattle since 2006 because 15 square miles of trees had been illegally razed, according to Brazil's environmental protection agency, Ibama. Cattle tracking data shows that the cattle was moved from Vale do Paraiso to a farm with a clean record before it reached the slaughterhouse. The agency said it lifted a commercial ban on Vale do Paraiso last year because its owner Antonio Lucena Barros presented a plan to restore the deforested area. Barros also obtained a court injunction suspending a fine of over $3 million, which the agency said it will appeal. Barros’ lawyer Calebe Rocha said in a statement that his client is fighting the fines in court and has been granted an injunction that suspends the payment of the fine. He also said that no animals were sold from the part of Vale do Paraiso that Ibama had blocked due to deforestation. Another plant owned by Darling Ingredients sourced fat from a slaughterhouse that confirmed to Reuters that it bought hundreds of cattle in 2022 and 2023 from rancher Bruno Heller, who Brazil's Federal Police has described as possibly the Amazon's biggest deforester in a 2023 investigation. In a statement, Heller’s lawyer Vinicius Segatto said Brazil’s environmental law is "excessively rigorous" and that the criminal case against his client is ongoing. FAT TO FUEL Airlines have been under pressure to buy more green jet fuel, which is now produced in tiny quantities, to meet industry targets of net zero emissions by 2050. Supporters of the use of tallow as a biofuel assert that demand for it alone is unlikely to push ranchers to clear rainforest to grow their pastures because of its economic value – less than 3% of what slaughterhouses get for each animal. Diamonds’ imports from Brazil were certified as sustainable by the International Sustainability and Carbon Certification (ISCC), a third-party certification body that approved Diamond's plant for CORSIA. To be eligible, biomass used for fuel cannot come from land that was deforested after 2008 or protected areas, but the ISCC told Reuters it did not investigate Diamond's supply chain because it considers tallow a "byproduct" of the beef industry under CORSIA. Three experts who helped design CORSIA told Reuters that the program allows producers to omit the score for carbon emissions and deforestation of the Amazon rainforest because it assumes demand for tallow is unlikely to push ranchers to grow their herds. The International Civil Aviation Organization declined to comment when asked about whether it viewed deforestation in the tallow supply chain as a violation of its sustainability standards. However, the agency said it is “constantly monitoring the compliance” of third-parties responsible for certifying sustainable aviation fuel producers and welcomes information on “any potential deviations” for further evaluation. https://www.reuters.com/sustainability/climate-energy/how-texas-refinery-turns-amazon-destroying-cattle-into-green-jet-fuel-2025-09-16/

2025-11-12 20:28

WASHINGTON, Nov 12 (Reuters) - China agreed on a plan to stop fentanyl-related chemicals as part of its deal with the Trump administration to crack down on the lethal opioid, FBI Director Kash Patel said on Wednesday. Patel said the agreement resulted from his trip to Beijing last week, a visit that followed U.S. President Donald Trump'ssummit last month with Chinese President Xi Jinping in South Korea. Sign up here. "The People's Republic of China has fully designated and listed all 13 precursors utilized to make fentanyl," Patel said at a news briefing. "Furthermore, they have agreed to control seven chemical subsidiaries that are also utilized to produce this lethal drug." He did not provide additional details. The Chinese embassy in Washington did not respond to a request for comment. Reuters previously reported Patel's trip to China, which took place last weekend. The trip was not previously officially announced by either the United States or China. China's Commerce Ministry announced , opens new tab on Monday that the country will make adjustments to the catalog of drug-related precursor chemicals and will require licenses for export of certain chemicals to the United States, Canada and Mexico. The anti-drug authority also tightened oversight of production and export of drug-making chemicals not on its control list to keep them out of illegal channels, it said in a notice. It underscored criminal risks exporters could face when shipping chemicals to certain "high-risk" countries such as the United States. Trump halved the tariffs on Chinese goods imposed as a punishment over the flow of fentanyl to 10% after reaching the agreement during last month's talks with Chinese leader Xi Jinping. Xi will work "very hard to stop the flow" of fentanyl, a deadly synthetic opioid that is the leading cause of American overdose deaths, Trump told reporters after the talks. U.S. Treasury Secretary Scott Bessent said the details of the fresh consensus would be hashed out through a new bilateral working group. The deal signaled a shift for Trump officials, who had insisted that punitive measures would remain in place until China proved it was cracking down on fentanyl supply chains. Chinese officials vehemently defend their record on fentanyl, saying they have already taken extensive action to regulate precursor chemicals used to make the drug and accuse Washington of using the issue as "blackmail." https://www.reuters.com/business/healthcare-pharmaceuticals/fbi-chief-china-agreed-plan-stop-fentanyl-precursors-2025-11-12/