2025-11-05 22:40

Nov 5 (Reuters) - Nutrien (NTR.TO) , opens new tab beat analysts' expectations for third-quarter profit on Wednesday, and said it would initiate a review of strategic alternatives for its phosphate business. U.S.-listed shares of the Canadian company rose 1.8% after the bell. Sign up here. The review could include reconfiguring operations, strategic partnerships or a potential sale, the company said, as part of the fertilizer maker's efforts to simplify its portfolio and boost free cash flow. Phosphate markets have remained tight in 2025, with global shipments being constrained by supply availability including from Chinese export restrictions. Meanwhile, weaker affordability for phosphate fertilizers has also hit demand. However, a robust planting season and healthy crops in several parts of North America and lower prices have boosted demand for potash fertilizers. Nutrien, the world's top potash producer, said total sales were $6.01 billion for the third quarter, compared with $5.35 billion, a year earlier. Potash sales rose 27% to $1.12 billion, while phosphate sales climbed 20% to $495 million during the July-September period. The Saskatoon, Canada-based firm posted an adjusted profit of 97 cents per share for the three months ended September 30, compared with analysts' average estimate of 95 cents per share, according to data compiled by LSEG. https://www.reuters.com/world/americas/nutrien-tops-profit-estimates-initiates-review-phosphate-business-2025-11-05/

2025-11-05 22:21

Poland seeks to become import hub for U.S. LNG EU inked deals for U.S. energy following pressure from Trump US currently supplies about 55% of EU's LNG WARSAW/LONDON, Nov 5 (Reuters) - Poland is working on a deal to import liquefied natural gas from the U.S. to supply Ukraine and Slovakia, an agreement that would further tighten the European Union’s ties to American energy, two sources familiar with the negotiations said. "We are working with our partners – Americans, Slovaks, Ukrainians – on the possibilities of importing American gas to boost the energy security of our region," the Polish energy ministry told Reuters late on Wednesday, confirming the talks. Sign up here. Officials expect to announce a joint declaration to boost imports after a meeting of the parties at a transatlantic energy conference in Athens later this week, one of the sources said. "After that, discussions would follow on terms for supplies to Slovakia," one of the sources told Reuters. Potential volumes to be shipped south via Poland could be as much as 4 to 5 billion cubic meters of gas per year, about the same as Slovakia's annual gas consumption, the sources said. This is expected to be the latest in a series of energy deals struck between European and U.S. government officials and companies on the back of a push from Washington to boost exports of American gas and nuclear technology. The U.S. Department of Energy did not immediately respond to a request for comment. "We hadn’t fully seized this historic opening that we have to get Europe off Russian energy and onto American, but now this administration is going full throttle and there’s a real shift,” said a U.S. official. “This could seal the deal, we could see a seismic change in how Europe gets its energy.” The EU put forward new plans to end its purchases of Russian oil and gas last month, with a fresh package of sanctions that bans Russian LNG imports by 2027. Some EU member states still buy Russian energy, while also supporting Ukraine in the war. Slovakia and Hungary try to balance being allies of Washington and importing Russian energy, which has drawn criticism from U.S. President Donald Trump. U.S. Energy Secretary Chris Wright in September privately gave European ministers "a very strong message about America’s reliability as an energy partner and America’s interest in doing more with Europe," a former diplomat said. The same week, U.S. Interior Secretary Doug Burgum met Italy’s energy minister, pledging to deepen ties through increased U.S. LNG sales. Two days later, Italian utility Edison inked a 15-year supply deal for the liquefied gas. Wright met Polish and Slovak officials in Vienna the following week. Slovakia signed an agreement with the U.S. for a new nuclear power plant on October 7. The EU’s use of LNG has climbed to historic highs this year, with the U.S. currently supplying about 55% of its supply, up from 27% in 2021. Fully replacing all Russian gas imports with American LNG would raise this to over 80%, according to Reuters calculations. https://www.reuters.com/business/energy/poland-talks-import-more-lng-us-supply-ukraine-slovakia-2025-11-05/

2025-11-05 22:13

WELLINGTON, Nov 6 (Reuters) - New Zealand's top central banker said on Thursday that the deterioration in the country's labour market was within the bank's expectations, after data this week showed the jobless rate in the third quarter rose to the highest level since 2016. "It is hard out there, that is something that we had anticipated in terms of where we're in the economic cycle," Reserve Bank of New Zealand Governor Christian Hawkesby said at a parliamentary committee hearing. Sign up here. https://www.reuters.com/world/asia-pacific/new-zealands-central-bank-says-labour-market-woes-within-expectations-2025-11-05/

2025-11-05 22:03

ORLANDO, Florida, Nov 5 (Reuters) - U.S. stocks and bond yields rose on Wednesday on surprisingly strong job growth and service sector data, which suggests the economy is in decent shape and calls into question how much lower the Federal Reserve needs to cut interest rates. I didn't write a column today, but don't worry - here is a link to Monday's, where I highlight the growing doubts around whether U.S. Big Tech's astronomical investments in AI will ultimately deliver the returns investors are banking on. 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 * U.S. economic resilience With the U.S. government shutdown now officially the longest on record, there has been hardly any economic data for investors or policymakers to chew on over the past month. But if the latest figures on Wednesday are anything to go by, underlying growth might be stronger than many thought. Private sector payrolls growth rebounded sharply in October, and services sector activity rose to its strongest in eight months. Market probabilities of a Fed rate cut next month duly fell back to around 65%, and stocks jumped. Let's see if these are backed up by other numbers in the weeks ahead. * AI "bubble" debate rages It's been a strange - and potentially pivotal - week in the world of AI. Most U.S. "Big Tech" firms have reported strong earnings, and apart from Meta and Microsoft, their share prices have held up despite some froth coming off the market. But there are warning signs, certainly regarding valuations if not the technology. CEOs of big U.S. banks are urging caution at these levels, Palantir is trading around 240 times forward earnings, and doubts are gnawing around the huge sums of AI capex. Is it up to Nvidia once again to deliver bumper earnings and soothe everyone's nerves? * Japanese FX intervention? Dollar/yen is trading at 154.50, its highest since February, above levels that have previously prompted Tokyo to intervene (around 152.00 in 2022), and appears to have upward momentum. The dollar is on a roll, while the prospect of fiscal easing from Japan's new government is weighing on the yen. Will Tokyo intervene soon? Based on dollar/yen and momentum, perhaps. It intervened last year in the 158.00-162.00 area, so 160.00 might be a "line in the sand". But domestic and relative U.S.-Japanese fundamentals, and capital flows, would have to align for it to be successful. Assuming dollar/yen doesn't leap higher in the coming weeks, let's see what the BOJ does and signals on December 19. Big Tech, big spend. But big returns? The reaction of most "Magnificent Seven" tech giants' shares to their latest earnings suggests the artificial intelligence boom is far from over. Yet doubts about the future returns from these firms' astronomical AI expenditures are gnawing deeper. The third-quarter earnings season has seen these tech behemoths continue to rake in huge profits and offer sunny guidance. Some investors may baulk at the Mag 7's lofty valuations, but today's tech leaders – unlike the superstar firms of the 1990s dotcom bubble – appear to have sustainable business models. Federal Reserve Chair Jerome Powell reiterated as much last week, saying that their AI investments are a major source of U.S. economic growth. Just four "hyperscalers" alone - Microsoft, Amazon, Meta and Alphabet - are expected to spend a combined $350 billion this year, and Goldman Sachs estimates global AI-related infrastructure spending could reach $4 trillion by 2030. The more these firms splurge on data centers, cloud computing capabilities, and the gamut of AI technologies, the loftier investors' expectations will get. At some point, they will be impossible to meet. The financial benefits and cost savings for society resulting from that are one thing; which companies actually profit is another. It is important, therefore, to distinguish between "value creation" and "value capture". "The value creation is certainly there," says Daniel Keum, associate professor of management at Columbia Business School. "But will that value flow back to the companies that are making these AI investments right now? For me, the clear answer is no." DO THE MATH It's early days in the AI supercycle, but Big Tech's AI outlays are already eating into hyperscalers' cash flows. Torsten Slok, chief economist at Apollo Global Management, estimates that aggregate capex at Amazon, Google, Microsoft, Meta and Oracle as a share of their operating cash flow is now a record 60% – and rising. Amazon reported strong earnings last week, and its stock surged double digits to hit a new high on Friday. But buried in the report was a slide showing that trailing-12-month free cash flow has fallen almost 70% over the last year. Ross Hendricks, analyst at independent research firm Porter & Co, estimates that hyperscalers' free cash flow in the first quarter of next year will be down more than 40% from the same period this year. "The whole sector faces the same basic problem," says Bob Elliott, co-founder of Unlimited Funds. "The math is pretty simple, unless there is a surge in revenues from these activities, Big Tech is going to pump nearly all their free cash flow into capex in just a few years." This creates several potential problems. It intensifies the pressure to generate high returns on these investments, but until those materialize, non-AI-related activities are also under pressure to produce significant returns. And this leaves hyperscalers vulnerable in the event of a sharp economic or market downturn. HIGHER BAR The fate of these megacaps will, of course, have a significant impact on the broader economy, not only because these companies' capex is helping to drive growth but also because almost everyone with a retirement fund is exposed to them. Nvidia's share of the total S&P 500 market cap is a stunning 8%, while that of the "Mag 7" is a record 37%. Investors are well aware of how much these shares have appreciated. The Philadelphia Semiconductor Index has more than doubled from its April low. But expensive markets can always get more expensive. It will take a brave fund manager to tell clients that they're reducing exposure to what have effectively become cash-printing machines. Of course, whether these companies can continue printing money as fast as they're spending it is the big question. For example, Meta's announced capex this year is around $70 billion, but Unlimited Funds' Elliott notes that the company's income is only $3 billion to $5 billion higher, based on underlying trends, than it was before they started spending all this cash. That's a pretty "mediocre" return on investment. Of course, CEO Mark Zuckerberg might argue that this is long-term investment and that not spending now could be more costly down the line if the AI revolution lives up to the hype. But it is unclear how much patience investors will have. Smaller businesses overall seem to be faring better. A Wharton Business School study published last month found that 74% of businesses say generative AI investment is already producing positive returns, especially smaller enterprises in digital-based sectors like tech and finance. "Confidence remains strong ... but future gains must now be justified by clear performance outcomes," the authors said. The bar for Big Tech giants with market caps of trillions of dollars and capex budgets of hundreds of billions is higher though. Much higher. 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-2025-11-05/

2025-11-05 21:55

FAA may take further steps if air traffic issues persist Shutdown causes staffing shortages, flight delays, longer security wait times Airlines warn of safety risks, shares down 1% in extended trading WASHINGTON/CHICAGO, Nov 5 (Reuters) - U.S. Transportation Secretary Sean Duffy said on Wednesday that he would order 10% of flights at 40 major U.S. airports to be cut starting Friday unless a deal to end the federal government shutdown is reached. The shutdown, now in its 36th day and the longest in U.S. history, has forced 13,000 air traffic controllers and 50,000 Transportation Security Administration agents to work without pay. This has worsened staff shortages, caused widespread flight delays and extended lines at airport security screening. Sign up here. "We had a gut check of what is our job," Duffy told reporters, explaining why he made the decision. Reuters earlier reported the plan. While the government did not name the 40 airports affected, the cuts were expected to hit the 30 busiest airports including those serving New York City, Washington, D.C., Chicago, Atlanta, Los Angeles and Dallas. This would reduce as many as 1,800 flights and over 268,000 airline seats, according to aviation analytics firm Cirium. The move is aimed at taking pressure off air traffic controllers. The U.S. Federal Aviation Administration also warned that it could add more flight restrictions after Friday if further air traffic issues emerge. Airlines for America, a trade group representing major U.S. carriers such as Delta (DAL.N) , opens new tab, United (UAL.O) , opens new tab, American, and Southwest (LUV.N) , opens new tab, said its members were trying to understand the next steps. "We are working with the federal government to understand all details of the new reduction mandate and will strive to mitigate impacts to passengers and shippers," it said. The FAA was scheduled to hold a call with airlines on Wednesday evening to explain how the cuts will be implemented, according to industry sources. The federal government has mostly closed as Republicans and Democrats are locked in a standoff in Congress over a funding bill. Democrats have insisted they would not approve a plan that does not extend health insurance subsidies while Republicans have rejected that. President Donald Trump and Republicans have been trying to intensify pressure on Democrats by increasing the pain felt by average Americans from the government shutdown. The closure, which began October 1, left many low-income Americans without food assistance, closed many government services and led to the furlough of about 750,000 federal employees. Duffy had warned on Tuesday that if the federal government shutdown continued another week, it could lead to "mass chaos" and force him to close some of the national airspace to air traffic. Airlines have repeatedly urged an end to the shutdown, citing aviation safety risks. AIRLINE STOCKS DIP Shares of major airlines including United and American were down about 1% in extended trading. An airline industry group estimated that over 3.2 million passengers have been affected by flight delays or cancellations due to rising air traffic controller absences during the shutdown. Airlines have been raising concerns with lawmakers about the impact on operations. Airlines said the shutdown has not significantly affected their business but have warned bookings could drop if it drags on. More than 2,100 flights were delayed on Wednesday. On Tuesday, FAA Administrator Bryan Bedford said that 20% to 40% of controllers at the agency's 30 largest airports were failing to show up for work. Duffy said the authorities would also limit space launches to certain times of the day. https://www.reuters.com/business/aerospace-defense/us-may-cut-air-traffic-10-by-friday-without-shutdown-deal-sources-say-2025-11-05/

2025-11-05 21:51

Nov 5 (Reuters) - Devon Energy (DVN.N) , opens new tab surpassed Wall Street expectations for third-quarter profit on Wednesday, as the U.S. shale producer benefited from higher output. Shares of the company rose 1.8% after the bell. Sign up here. U.S. oil and gas production rose to record highs in August, data from the Energy Information Administration showed. U.S. crude oil output rose 86,000 barrels per day, while gross natural gas production from the lower 48 states rose to a record 122.8 billion cubic feet per day (bcfd). Devon also benefited from a 26% jump in U.S. natural gas prices during the July-September period from a year earlier, driven by soaring demand to power data centers as well as a rise in liquefied natural gas exports. The energy sector has been benefiting from a rise in demand for natural gas, supported by LNG exports and increasing power consumption due to hotter temperatures and data center operations. Devon's third-quarter production rose to 390,000 barrels of oil per day, from 335,000 boepd a year ago. Its average realized prices — or the price received for production — came in at $36.46 per boe during the reported period, compared with $40.71 per boe last year. The firm slightly lowered its 2025 capital expenditure budget to a range of $3.5 billion to $3.7 billion from a prior forecast of $3.6 billion to $3.8 billion. Top U.S. oil and gas producers have cut their capital expenditure forecasts for 2025 by about $2 billion amid lower oil prices and a wave of industry consolidation. Devon's total output rose 17% to 853,000 barrels of oil equivalent per day during the quarter, while natural gas output rose nearly 3% to 1.41 million cubic feet per day. The Oklahoma City-based company posted an adjusted profit of $1.04 per share for the three months ended September 30, compared with the analysts' average estimate of 93 cents apiece, according to data compiled by LSEG. https://www.reuters.com/business/energy/devon-energy-beats-third-quarter-profit-estimates-2025-11-05/