2025-09-17 21:38
Sept 17 (Reuters) - DoubleLine Capital CEO Jeffrey Gundlach said in an interview with CNBC on Wednesday that the Federal Reserve's 25-basis-point rate cut was "the right move," but warned that any aggressive easing could be inflationary. The Federal Reserve cut interest rates by a quarter of a percentage point earlier on Wednesday and indicated it will steadily lower borrowing costs for the rest of the year, as policymakers responded to signs of weakness in the job market. Sign up here. However, Stephen Miran, who was sworn in as a Fed governor on Tuesday, dissented in favor of a half-percentage-point reduction in borrowing costs and appears to have penciled in the steepest rate cuts in projections. "I think there's a risk there of over-easing," said Gundlach, a money manager often dubbed "the bond king," pointing to recent downward revisions to job creation figures and confusion in the labor market. He expects the Fed to cut rates again at the October meeting. Gundlach also warned that the U.S. may be heading into an environment of effectively negative real interest rates. https://www.reuters.com/business/doubleline-capital-ceo-gundlach-says-feds-25-bps-rate-cut-is-the-right-move-2025-09-17/
2025-09-17 21:37
CAPE TOWN, Sept 17 (Reuters) - One of South Africa's top courts on Wednesday annulled a government permit allowing state utility Eskom to build a large power plant burning natural gas, saying there had not been proper public consultation. The 3,000 megawatt plant in the east coast port city of Richards Bay is part of government plans to bolster the country's generation capacity after years of electricity blackouts and pivot away from coal. Sign up here. "The effect of this order is that the authorisation is a nullity," the judgment by the Supreme Court of Appeal said. "This will necessitate a fresh application by Eskom for authorisation once the required public participation has taken place." The judgment echoes previous rulings , opens new tab against energy companies which failed to properly consult affected communities when seeking permits to explore for oil and gas off South Africa's coast. Richards Bay, where the Eskom gas plant would be built, is where South Africa's first liquefied natural gas import terminal will also be located. Environmental groups, which had challenged the authorisation granted to Eskom by the Department of Forestry, Fisheries and the Environment, welcomed the appeal court's judgment. "Eskom for too long as a state (company) has gotten away with injustices and people that have lived alongside its facilities will suffer from the ... high levels of pollution," Desmond D'Sa of the South Durban Community Environmental Alliance, one of the applicants in the court case, said in a statement. Spokespeople for Eskom and the environment department declined to immediately comment when contacted by Reuters. https://www.reuters.com/business/energy/south-african-court-annuls-permit-eskom-build-new-gas-power-plant-2025-09-17/
2025-09-17 21:04
TSX ends up 0.02% at 29,321.66 Posts a record intraday high BoC and Fed both ease by 25 basis points Consumer discretionary gains 0.39% Sept 17 (Reuters) - Canada's benchmark stock index ended slightly higher on Wednesday, helped by gains for consumer discretionary shares, as the Bank of Canada and the Federal Reserve resumed cutting interest rates. The S&P/TSX composite index (.GSPTSE) , opens new tab ended up 6.43 points, or 0.02%, at 29,321.66, after notching a record intraday high of 29,465.14. Sign up here. Both the BoC and the Fed cut rates by 25 basis points to support their economies, marking their first actions in months. "What we got was what was expected," said Allan Small, senior investment advisor of the Allan Small Financial Group with iA Private Wealth, adding that the pricing in of rate cuts in recent weeks had helped the market overcome a seasonally challenging period. "I believe they're (the BoC) going to cut again over the fourth quarter," Small said. "It's stimulative for the economy and therefore for the stock market." Investors see a roughly 75% chance the Canadian central bank eases further by December. The consumer discretionary sector (.GSPTTCD) , opens new tab rose 0.39% as shares of Dollarama (DOL.TO) , opens new tab and Magna International Inc (MG.TO) , opens new tab notched gains. Heavily weighted financials added 0.14%, but six of the 10 major sectors ended lower. Technology declined 0.93%, with electronic equipment company Celestica Inc (CLS.TO) , opens new tab losing 2.60%. Energy ended 0.37% lower as the price of oil settled down 0.7% at $64.05 a barrel. https://www.reuters.com/markets/europe/tsx-inches-higher-boc-fed-cut-interest-rates-2025-09-17/
2025-09-17 21:02
ORLANDO, Florida, Sept 17 (Reuters) - Making sense of the forces driving global markets By Jamie McGeever, Markets Columnist Sign up here. U.S. markets gyrated sharply on Wednesday after the Fed cut interest rates by 25 basis points, and investors digested its new economic projections and Chair Jerome Powell's press conference. The upshot? Bond yields and the dollar rose, while Wall Street was mixed. More on that below. In my column today I look at how a resumption of the Fed's easing cycle means the U.S. central bank is now swimming against the global tide. This may have mixed blessings for world markets. 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: * Fed moves The Fed delivered the quarter percentage point rate cut markets had expected, and it looks like there will be more to come. The emphasis on growing labor market risks and the new "dot plot" point to at least another 50 bps of easing this year. But it's far from clear-cut. Employment and inflation risks are incredibly hard to gauge, and Powell said the Fed is in a "meeting by meeting situation". You can't read too much into the market's initial reaction on Wednesday, but yields ended higher and nearly 10 bps of implied easing was taken out of the 2027 rates curve. * Rotation, rotation, rotation The rotation out of Big Tech and growth stocks into small caps and cyclicals was a feature of the summer months but had cooled so far in September. It seemed to show its face on Wednesday, with the Dow and Russell 2000 closing higher and the Nasdaq falling 0.3%. Where does it go from here, now that the Fed decision, revised SEP and Powell's guidance are out of the way? The Dow and Russell 2000 are still significantly lagging the Nasdaq and "Mag 7" this year, and relative valuations suggest there is room to catch up. But AI optimism might suggest otherwise. * Tariff squeeze The impact from tariffs on the U.S. economy has clearly not been felt yet. Retail sales in August were much stronger than expected, the Atlanta Fed's GDPNow model currently has Q3 growth tracking at a healthy 3.4% annualized rate, and Citi's economic surprises index has been positive for over two months. The question is - and has been for months - when does this change? "Pass-through to consumers delayed but not derailed," say BNP Paribas economists, who estimate U.S. firms have so far shouldered 64% of the tariff burden and consumers only 17%. They see that changing to 1% and 63%, respectively. Will that move the dial? Fed easing a mixed blessing for rest of the world We're about to see a rare phenomenon in global central banking: the U.S. Federal Reserve is set to embark on an interest rate-cutting cycle just as many of its peers are winding theirs down. Strictly speaking, the Fed is resuming its easing cycle, having paused last December after announcing 100 basis points of cuts over the preceding three months. Regardless, the world's most important central bank is about to swim against the global tide, something investors haven't seen for many years, especially when it comes to policy easing. The rest of the world, therefore, may need to be prepared for some choppy waters ahead. There have been four large global easing cycles since the euro's launch in 1999, including the current one. In the previous three, the Fed was either one of the first big central banks to move, as was the case in 2019, or among the most aggressive rate cutters, as was the case in the dotcom bust. But last year the Fed was relatively slow off the blocks, as sticky inflation and solid growth meant it pulled the trigger after most of its peers. As a result, the Fed now finds itself playing catch up to other monetary authorities, especially against the European Central Bank and Bank of Canada, which have cut rates 200 and 225 bps in this cycle, respectively. Rates futures markets are currently pricing in around 150 basis points of Fed rate cuts by the end of next year, far more than is expected in the rest of the developed world. Traders expect only another 40-60 bps over the same period from the BoE, BOC, and Reserve Banks of Australia and New Zealand. Meanwhile, the ECB and Swiss National Bank are thought to be done, while the Bank of Japan is slowly raising rates, taking its own unique path. This policy divergence may create some problems beyond U.S. shores. EUR-EKA! The most immediate and obvious market impact of the policy divergence is being felt in FX markets, as the dollar is weakening once again after a summer of relative stability. Unforeseen - and unwanted - domestic currency strength could complicate life for many central banks around the world. Take the ECB. Officials are already expecting core inflation to undershoot their 2% target, ending 2027 at 1.8%. Much of the 15% year-to-date euro/dollar rise will already be plugged into their models, but probably not another jump higher in the world's most important exchange rate. The euro is already on track for its biggest annual rise against the greenback since 2003. If currency strength and tariff-sapped growth depress inflation even more, does that mean the ECB will need to start cutting rates again? Perhaps. But that would risk lowering the policy rate, which is currently 2% and in the middle of the ECB's 1.75%-2.25% neutral range, into stimulative territory, something influential board member Isabel Schnabel has warned against. By some measures the region's 'real' inflation-adjusted interest rate is already below 'R-star', the long-run neutral rate that neither accelerates nor slows growth. You can see why Schnabel and others may be wary of further easing. EUPHORIA? And what about the impact on global equities? Fed easing has historically been a tailwind for world stocks, when looked at purely through the policy rate lens. That's especially true when these rate cuts have been followed by 'soft landings' - i.e., no recession – which stands to reason. The market already seems to be banking on this happening again. Increasingly dovish Fed expectations combined with 'soft landing' hopes and optimism around artificial intelligence and Big Tech have helped drive a global equity resurgence since April. Many key indices have risen to new records, clocking impressive double-digit gains along the way. But how much of that is already 'in the price'? Some analysts reckon there could be more room to go. Strategists at Exane believe equities are only in the "early stages" of an upswing that could culminate in "euphoria", and are overweight Europe and Japan. Their counterparts at Citi are "max long" equities on a global basis, with Europe replacing emerging markets as the main overweight position. The risk, of course, is that the Fed fails to meet the market's aggressive easing expectations in the coming months, prompting the dollar to snap higher, global financial conditions to tighten, and a 'tactical' stock market correction to ensue, not only in the U.S. but around the world. Only time will tell, but what is clear is that markets are entering unfamiliar territory. With many equity markets at record highs, bond spreads at historic tights and key exchange rates at levels not seen in years, investors should tread carefully as this latest Fed easing cycle plays out. 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/business/global-markets-trading-day-graphic-2025-09-17/
2025-09-17 20:53
Sept 17 (Reuters) - A worker has died in an accident in connection with a lifting operation at Equinor's (EQNR.OL) , opens new tab refinery at Mongstad, Norway, the company said in a press release on Wednesday. All non-critical activity on the plant has been stopped until further notice and the area has been cordoned off, the company said. Sign up here. The deceased was employed by Crane Norway, a supplier of crane and lifting services at Mongstad, Equinor said, adding relevant authorities have been notified of the incident and the police have initiated an investigation. According to Equinor's website, the Mongstad refinery is the largest oil refinery in Norway, with a processing capacity of approximately 12 million tonnes of crude oil annually. https://www.reuters.com/business/energy/norways-equinor-reports-one-dead-after-accident-mongstad-refinery-2025-09-17/
2025-09-17 20:48
Dow up 0.57%, S&P down 0.1%, Nasdaq down 0.32% Federal Reserve cuts interest rates by 25 basis points Fed projections show two more cuts for 2025 Sept 17 (Reuters) - The Nasdaq and the S&P 500 closed lower in choppy trading on Wednesday, after the U.S. Federal Reserve cut interest rates by an expected 25 basis points and Fed Chair Jerome Powell cited the weak job market. The Dow closed higher after meandering during Powell's speech. Sign up here. The central bank indicated it will steadily cut rates for the rest of the year as policymakers signaled concerns about weakness in the labor market. The Fed projected two more quarter-percentage-point cuts this year. In a press conference, Powell talked about the mounting downside risks of employment compared to inflation, but said inflation risks still must be assessed and managed. This rate cut was already priced in by investors, according to data compiled by LSEG. “Powell tempered some of the initial enthusiasm in the markets for a more aggressive path of monetary easing. He noted the softness in the labor market, but reserves a larger cut for more serious conditions that are not present today," said Michael Rosen, chief investment officer at Angeles Investments. "The Fed also raised its inflation forecast, highlighting the delicate balance between setting monetary policy to offset a weaker labor market versus bringing inflation lower," he said. The Dow Jones Industrial Average (.DJI) , opens new tab rose 260.42 points, or 0.57%, to 46,018.32, the S&P 500 (.SPX) , opens new tab lost 6.41 points, or 0.10%, to 6,600.35 and the Nasdaq Composite (.IXIC) , opens new tab lost 72.63 points, or 0.32%, to 22,261.33. Financial stocks like American Express (AXP.N) , opens new tab helped boost the Dow. The Fed's decision and outlook will test Wall Street's recent rally, which has been supported by rate-cut expectations and revived enthusiasm around AI-stock-linked trading. Powell fielded several questions about the Fed's independence from the executive branch. On Tuesday, White House economic adviser Stephen Miran was sworn in as a Fed Governor and an appeals court rejected U.S. President Donald Trump's attempt to sack Governor Lisa Cook. Nvidia (NVDA.O) , opens new tab weighed on the Nasdaq. Shares fell 2.6% after a report said China's internet regulator had instructed the country's biggest tech companies buying all of the AI leader's chips. Workday jumped 7.2% after a report that activist investor Elliott Management took a more than $2 billion stake in the human resources software provider. Lyft (LYFT.O) , opens new tab popped 13.1% on the news that Alphabet's (GOOGL.O) , opens new tab Waymo would launch autonomous cab rides in Nashville next year in with the ride-hailing firm. Shares in rival Uber (UBER.N) , opens new tab fell 5%. Declining issues outnumbered advancers by a 1.02-to-1 ratio on the NYSE and by a 1.1-to-1 ratio on the Nasdaq. The S&P 500 posted 18 new 52-week highs and five new lows while the Nasdaq Composite recorded 122 new highs and 45 new lows. Volume on U.S. exchanges was 18.91 billion shares, compared with the 16.47 billion average for the full session over the last 20 trading days. https://www.reuters.com/sustainability/sustainable-finance-reporting/wall-street-ends-mixed-trade-choppy-after-feds-rate-cut-outlook-2025-09-17/
