2025-05-02 14:47

CBOE posts record options volumes in Q1 Profit, revenue top Wall Street expectations Q2 off to robust start, outgoing CEO says May 2 (Reuters) - Derivatives exchange Cboe Global Markets (CBOE.Z) , opens new tab reported a record first-quarter profit on Friday and boosted its annual revenue growth forecast as tariff news drove up market volatility and fueled strong growth in options trading. Exchanges thrive during times of market turmoil as trading volumes surge and investors hedge their portfolios to manage risk, driving up transaction and clearing fees for companies such as Cboe. Sign up here. Rivals CME Group (CME.O) , opens new tab and NYSE-parent Intercontinental Exchange (ICE.N) , opens new tab also had record-breaking quarters as headlines about rapid changes in U.S. trade policy and the emergence of Chinese startup DeepSeek's low-cost AI model led to heightened market volatility. Shares of Cboe rose 1.4%. Revenue from its options trading arm jumped 15% to an all-time high of $352.4 million. Average daily volume in index options hit a quarterly record of 4.8 million contracts. Cboe now expects full-year revenue growth in the mid- to high-single-digit percentage range, up from its previous forecast of mid-single-digit growth. "It is a remarkable outcome given the macro challenges," Oppenheimer analyst Owen Lau said. Outgoing CEO Fredric Tomczyk told analysts Cboe had a robust beginning to the second quarter and while volumes may ease from the exceptional levels seen in recent months, the market ecosystem remains healthy and supportive of volume growth moving forward. Executives said retail investors remain engaged, but with a disciplined approach to the market, accounting for less of the volume increases around the volatility spikes. NEW GUARD Cboe late on Thursday named rival CME's former top boss Craig Donohue as its new CEO, effective May 7. He succeeds Tomczyk, who has been at the helm since September 2023 and steered Cboe through a challenging time after the abrupt departure of former CEO Edward Tilly. Jefferies analysts said organic growth outside the U.S. was likely to remain unchanged as a strategic priority, but it expects additional M&A to compliment the strategy. Excluding one-time costs, Cboe earned a record $2.50 per share for the quarter, beating analysts' expectations of $2.36, according to estimates compiled by LSEG. Revenue jumped 13% to a quarterly record of $565.2 million. https://www.reuters.com/business/exchange-operator-cboe-posts-record-profit-hedging-rush-2025-05-02/

2025-05-02 14:38

Traders now see the Fed waiting until July to start rate cuts Tariffs' effect on labor market not yet felt Firm jobs report means Fed's focus remains on containing inflation May 2 (Reuters) - Federal Reserve policymakers on the alert for possible cracks in the labor market as businesses adjust to President Donald Trump's erratic trade policy got some reassurance on Friday that so far there's little weakness, and no reason to rush on rate cuts. U.S. employers added a more-than-expected 177,000 jobs in April, the Labor Department reported, and the unemployment rate was unchanged at 4.2%. Both are signs the labor market remains in balance during a month when Trump announced the steepest tariffs in a century, sending stocks downward and convulsing the bond market before the administration paused many of those levies until July. Sign up here. With the job market holding up and inflation still running above their 2% target, Fed policymakers are expected to stick to their plan to leave short-term borrowing costs where they are while they wait to see how the tariffs affect prices and economic growth. Hourly earnings rose 3.8% from a year earlier, the jobs report showed, the same pace as in March and in the range of what the Fed considers to be consistent with its 2% inflation target. "In the here and now, solid labor market data provides the Fed with scope for patience," said Lindsay Rosner, head of multisector fixed income investing at Goldman Sachs Asset Management. "With the forward-looking outlook having deteriorated, however, today’s data feels somewhat backward looking and the risks remain that a weakening economy could see the Fed resume its easing cycle later in the year." Traders are now betting the Fed will wait until July to start cutting interest rates; earlier they had thought a June move was more likely. And they now see the Fed delivering a total of three quarter-point interest rate cuts by year-end, one fewer than previously. Shortly after the report Trump reiterated his own call for the Fed to lower rates. Fed policymakers, who say it will be the economy's needs not the president's desires that will dictate their moves, want to be sure that inflation won't resurge. With the tariffs expected to drive prices higher, at least temporarily, they have signaled they'll keep the policy rate in the current 4.25%-4.50% range to keep downward pressure on inflation, as long as the job market doesn't crumble. And so far it's not, despite sinking consumer and business sentiment on fears that tariffs will hamstring U.S. growth. In April, the net number of people joining the labor market exceeded those leaving by the most since August 2023, a sign of a resilience. "Big picture, the U.S. labor market has not yet capitulated to the negative sentiment building among consumers and businesses, though the full weight of the tariffs shock remains directly ahead of us," wrote BMO Economics' Scott Anderson. https://www.reuters.com/world/us/fed-gets-no-reason-rush-rate-cuts-still-stable-job-market-2025-05-02/

2025-05-02 13:47

May 2 (Reuters) - President Donald Trump on Friday said the U.S. economy is in a transition stage, citing strong employment and his tariff plan while reiterating his call for the U.S. Federal Reserve to lower its interest rate. "We’re only in a transition stage, just getting started!" he said in a Truth Social post. The post followed the release of U.S. data that showed job growth slowed marginally for April. Sign up here. https://www.reuters.com/world/us/trump-says-us-economy-transition-urges-fed-cut-rates-2025-05-02/

2025-05-02 13:17

LONDON, May 2 (Reuters) - Britain is to restrict consumers' use of credit cards to buy crypto and their access to crypto lending products, the regulator said on Friday, a move aimed at improving protection as cryptoassets are regulated for the first time. The finance ministry this week said it would bring cryptocurrencies under compulsory regulation, with exchanges, dealers and issuers all coming under the existing rulebook. Sign up here. Crypto trading has exploded in popularity, with around 7 million people - about 12% of the adult population - owning cryptoassets, but it remains largely unregulated, the Financial Conduct Authority (FCA) said. The regulator maintains consumers "should be prepared to lose all their money" if they invest. Announcing new draft laws to regulate the sector, the government said it wanted to crack down on "bad actors" while supporting legitimate innovation in the burgeoning industry. The FCA is now looking at introducing curbs on retail investors using borrowed funds for crypto. "We are considering a range of restrictions, including restricting the use of credit cards to directly buy cryptoassets, and using a credit line provided by an e-money firm to do so," it said in a paper seeking feedback on its proposals. Consumers would still be free to use borrowed money to buy stablecoins, digital currencies that aim to keep a fixed value relative to other assets such as the U.S. dollar, issued by FCA-regulated companies. The FCA, citing a survey it commissioned, said 14% of crypto investors had used credit to buy crypto last year, up from 6% in 2022. The regulator is also considering restrictions on the lending and borrowing of cryptoassets, including running credit checks and testing consumers' investment knowledge and experience. Cryptoasset lending involves the owner loaning their crypto in return for a yield, while cryptoasset borrowing sees customers get loans in crypto that are later paid back with interest. While a small part of the market, cryptoasset lending and borrowing presented "risks of significant harm", the FCA said, including loss of ownership, liquidity risks, limited borrower creditworthiness checks and a lack of consumer understanding. Institutional investor access would remain, it added. The regulator will also seek to improve transparency and consumer understanding of 'staking' - locking digital tokens in a blockchain network in return for rewards. A survey the FCA commissioned found 27% of UK adults who own crypto have used staking. Hannah Meakin, partner at law firm Norton Rose Fulbright, said the FCA was trying to balance innovation with appropriate oversight, "yet this is no easy feat and the proof will be in the pudding as to whether they can get this balance right." https://www.reuters.com/technology/britain-bar-consumers-borrowing-buy-crypto-under-new-regime-2025-05-02/

2025-05-02 13:15

May 2 (Reuters) - U.S. job growth slowed marginally in April, but the outlook for the labor market is increasingly darkening as President Donald Trump's aggressive tariff policy heightens economic uncertainty. Nonfarm payrolls increased by 177,000 jobs last month after rising by a downwardly revised 185,000 in March, the Labor Department said on Friday. Sign up here. Economists polled by Reuters had forecast 130,000 jobs added last month after a previously reported 228,000 advance in March. The unemployment rate held steady at 4.2%. It is too early for the labor market to show the impact of Trump's on-and-off again tariffs policy. Amid the uncertainty, the Federal Reserve is expected to keep benchmark interest rates in the 4.25%-4.50% range next week. Economists expect companies will reduce hours before resorting to mass layoffs. MARKET REACTION: STOCKS: S&P 500 E-minis added to gains and were up 0.85%, pointing to a solid open on Wall Street BONDS: The yield on benchmark U.S. 10-year notes rose to 3.2676%, the two-year note yield rose to 3.744% FOREX: The dollar index pared a loss and was 0.30% lower, while the euro extended 0.27% higher COMMENTS: MARK MALEK, CHIEF INVESTMENT OFFICER, SIEBERT NXT, NEW YORK “We are expecting a slow decline in a non-farm payroll growth and while it's not positive by any means it's better than could've been expected. I think there were whisper numbers around there that were significantly less and I think people were somewhat braced for a bigger potential drop. The unemployment rate remains the same that was pretty positive.” ROBERT PAVLIK, SENIOR PORTFOLIO MANAGER, DAKOTA WEALTH, FAIRFIELD, CONNECTICUT "The economy isn't collapsing as people were worried about. We came in better than expected, both on the nonfarm payrolls report itself, but then it didn't show any real increase to average hourly earnings and so that came in a little bit lighter than expected. So that takes the concerns of wage pressures a little bit out of the picture." "The market likes the news. There'll be some out there that will point to a lagging indicator the fact that the Liberation Day sort of came and didn't necessarily get completely factored into non farm payrolls. But I really wouldn't worry too much about that yet. I would focus more on the positive aspect of this report -- the positivity that the US economy is continuing to move forward and still healthy enough, not gangbusters, but still healthy enough." MARK MALEK, CHIEF INVESTMENT OFFICER, SIEBERT NXT, NEW YORK “The numbers are holding up: so obviously the survey was worth for 138,000 and we came in slightly higher but last month was revised significantly downward. I think it just reflects what the consensus is expecting. We are expecting a slow decline in a non-farm payroll growth and while it's not positive by any means it's better than could've been expected. I think there were whisper numbers around there that were significantly less and I think people were somewhat braced for a bigger potential drop. The unemployment rate remains the same that was pretty positive.” SAMEER SAMANA, HEAD OF GLOBAL EQUITIES AND REAL ASSETS, WELLS FARGO INVESTMENT INSTITUTE, CHARLOTTE, NORTH CAROLINA "We've reached a steady state for the labor market. We went from too hot to kind of just right in terms of job growth, in terms of wage growth, in terms of the unemployment rate. So again until something more meaningful changes with respect to the supply or demand for labor it’s fair to say that it’s going to just keep chugging along." "Probably the big risk to the downside is that trade tensions flare up again. At least right now with the 90-day delay there's still some hope that things get worked out." "Consumers are still spending and that's driving continued job growth. The number was better than expected for this time, but it was revised lower for last time so if you take the two of them together its basically kind of right in line. So, the labor market is almost acting exactly as expected. It’s just settling into normal." "If anything, it probably reinforces the Fed's stance of being on hold for longer because continued steadiness in the labor market is what they're pointing to as the reason why it might take them some time to cut." CHRIS ZACCARELLI, CHIEF INVESTMENT OFFICER FOR NORTHLIGHT ASSET MANAGEMENT IN CHARLOTTE (by email) "Markets breathed a sigh of relief this morning as the jobs data came in better than expected. While recession fears are still simmering on the back burner, the buy-the-dip dynamic can continue – at least until the tariff pause runs out. We’ve already seen how financial markets will react if the administration moves forward with their initial tariff plan, so unless they take a different tack in July when the 90-day pause expires, we will see market action similar to the first week of April. "If adjustments can be made and the new approach is more nuanced, with exemptions for activity that leads to the administration’s ultimate goals and more reasonable tariff levels, then the real economy can re-adjust and markets will take it in stride, however, we aren’t out of the woods yet, because it’s unclear how much different the US trade approach will be in the second half of 2025 versus what we’ve seen year-to-date." MELISSA BROWN, MANAGING DIRECTOR OF INVESTMENT DECISION RESEARCH, SIMCORP, NEW YORK " This is good employment data which suggests that the economy remains strong. The one thing it suggests is that, even though everybody has been so worried about stagflation, maybe we managed to continue to grow without growing so much that we ignite inflation. I don't know if this is necessarily going to change anything (interest rate cut bets) because we're still looking at a strong economy at least for now. We could see these numbers go down as the impact of tariffs really starts to make its way through the economy, but it's not there yet." PETER CARDILLO, CHIEF MARKET ECONOMIST, SPARTAN CAPITAL SECURITIES, NEW YORK “This trend remains positive. Basically, (this report) indicates you know that the labor market is stable for now.” “(March’s downward revision) makes this report even stronger.” “Hourly wages are positive, you know, and that gives the Fed more time to assess the inflationary impact of tariffs.” “The participation rate ticking up is probably not significant and probably due to the fact that total unemployment is still at 4.2%.” “The bottom line is this was stronger than we expected and that it probably means that the economy is still not in recession.” “The takeaway is this report supports the Fed staying on course at the next week's meeting and the Fed will likely continue to stay on hold.” “So that puts the June meeting in question again.” BRIAN JACOBSEN, CHIEF ECONOMIST, ANNEX WEALTH MANAGEMENT, MENOMONEE FALLS, WISCONSIN "Employment is holding in there, but manufacturing is feeling the pinch. The diffusion index for manufacturing - related to how many industries are growing versus shrinking - has dropped to 42. It’s back to the muddy recessionary conditions for manufacturing. In April there was a big jump in hours worked in retail and transportation as people made their last ditch efforts to buy goods before prices adjusted." LINDSAY ROSNER, HEAD OF MULTI SECTOR FIXED INCOME INVESTING, GOLDMAN SACHS ASSET MANAGEMENT (emailed comments) “Strong jobs data puts a spring in the Fed’s step. Despite an increasingly uncertain economic backdrop, the US labor market remained resilient in April with employment surprising to the upside and the unemployment rate remaining steady. In the here and now, solid labor market data provides the Fed with scope for patience. With the forward-looking outlook having deteriorated, however, today’s data feels somewhat backward looking and the risks remain that a weakening economy could see the Fed resume its easing cycle later in the year.” https://www.reuters.com/world/us/view-april-us-payrolls-growth-slows-before-full-tariff-impact-felt-2025-05-02/

2025-05-02 12:30

May 2 (Reuters) - Canadian oil producer Imperial Oil (IMO.TO) , opens new tab posted a rise in first-quarter profit on Friday, driven primarily by stronger margins in its refining and fuel sales business, sending its U.S.-listed shares up nearly 6% before the bell. Canadian producers have benefited from the completion of the Trans Mountain pipeline expansion project, which raised its capacity to 890,000 barrels per day. The pipeline offers producers the only export route to international markets bypassing the United States. Sign up here. "The upstream business continued to benefit from improved egress and narrower heavy oil differentials, while our downstream profitability continued to reflect the structural advantages of the Canadian market," CEO Brad Corson said. Imperial's results come amid a broader rebound in North American refining margins, as product demand remains resilient and supply remains tight due to global disruptions. Canada sends about 90% of its oil exports to the United States, mostly shipped via pipelines from the western province of Alberta to land-locked refiners in the U.S. Midwest. The future of this interdependence was thrown into turmoil after U.S. President Donald Trump announced tariffs on the country's neighbor in the north, a promise he briefly made good in February before rowing back most of the levies within a few days. Imperial Oil — majority owned by U.S. oil and gas major Exxon Mobil (XOM.N) , opens new tab — reported petroleum product sales of 455,000 barrels per day during the first quarter, compared with 450,000 bpd a year ago. The Calgary, Alberta-based company said synthetic crude oil average realization rose to C$98.79 per barrel, from C$93.51 per barrel a year earlier. It, however, reported a fall in its upstream production, total throughput volumes and refinery utilization rate. Imperial's net income rose to C$1.29 billion ($933.23 million), or C$2.52 per share, during the quarter ended March 31, from C$1.2 billion, or C$2.23 per share, a year earlier. ($1 = 1.3823 Canadian dollars) https://www.reuters.com/business/energy/canadas-imperial-oil-posts-rise-first-quarter-profit-2025-05-02/