2024-09-27 05:03

Category 4 hurricane leaves a landscape of chaos Dozens killed across four states Florida and Georgia suffer power outages ATLANTA, Sept 27 (Reuters) - Tropical Depression Helene brought life-threatening flooding on Friday to wide sections of the U.S. Southeast, where at least 43 people have been killed by a storm that swamped neighborhoods, triggered mudslides, threatened dams and left more than 3.5 million homes and businesses without power. Before moving north through Georgia and into Tennessee and the Carolinas, Helene hit Florida's Big Bend region as a powerful Category 4 hurricane on Thursday night, packing 140 mph (225 kph) winds. It left behind a chaotic landscape of overturned boats in harbors, felled trees, submerged cars and flooded streets. By early Friday afternoon, the storm had been downgraded to a tropical depression with maximum sustained winds of 35 mph (55 kph), the National Hurricane Center said. But Helene's heavy rains were still producing catastrophic flooding in many areas, with police and firefighters carrying out thousands of water rescues throughout the affected states. More than 50 people were rescued from the roof of a hospital in Unicoi County, Tennessee, about 120 miles (200 km) northeast of Knoxville, state officials said, after floodwaters swamped the rural community. Rising waters from the Nolichucky River were preventing ambulances and emergency vehicles from evacuating patients and others there, the Unicoi County Emergency Management Agency said on social media. Emergency crews in boats and helicopters were conducting rescues. Elsewhere in Tennessee, Rob Mathis, the mayor of Cocke County, ordered the evacuation of downtown Newport because of a potential dam failure nearby. Mathis initially said the Walters dam had suffered a "catastrophic failure" but later said the dam "was breached" but there had been no major failure as yet. The Tennessee Emergency Management Agency wrote on social media that the Walters dam, which is located just across state lines in North Carolina, had not failed. The agency said that information came from Duke Energy, which operates the dam. Madison McDonald, a Duke Energy spokesperson, said, "we are aware of the situation and we're sorting out the facts." In western North Carolina, Rutherford County emergency officials warned residents near the Lake Lure Dam to immediately evacuate to higher ground, saying "Dam failure imminent." But by 8 p.m. (0000 GMT), the county emergency officials said that engineers had evaluated the dam "and determined it is no longer at imminent risk of failure." In nearby Buncombe County, landslides forced interstates 40 and 26 to close, the county said on X. The extent of the damage in Florida began emerging after daybreak on Friday. In coastal Steinhatchee, Florida, a storm surge - the wall of seawater pushed ashore by winds - of eight to 10 feet (2.4-3 meters) moved mobile homes, the National Weather Service said on X. In Treasure Island, a barrier island community in Pinellas County, boats were grounded in front yards. The city of Tampa posted on X that emergency personnel had completed 78 water rescues of residents and that many roads were impassable because of flooding. The Pasco County sheriff's office rescued more than 65 people overnight. Officials had pleaded with residents in Helene's path to heed evacuation orders, with National Hurricane Center Director Michael Brennan describing the storm surge as "unsurvivable." Some residents stayed put. Ken Wood, 58, a state ferry boat operator in Pinellas County, said he should have heeded evacuation orders rather than riding out the storm at home with his 16-year-old cat, Andy. "I'll never do that again, I swear," Wood said. "It was a harrowing experience. It roared all night like a train. It was unnerving. The house shook." Down the hill from his house, the storm flooded some homes with chest-deep salt water. One house caught fire and burned down, shooting 30-foot flames in the stormy sky, he said. "Old Andy seemed like he didn't care," Wood said. "He did fine. But next time we leave." Pinellas County Sheriff Bob Gualtieri said first responders were unable to answer several emergency calls from residents overnight due to the conditions. On Friday, county authorities found at least five people dead. Two others in Florida died, said Governor Ron DeSantis. Georgia Governor Brian Kemp's office reported 15 storm-related fatalities in that state, while North Carolina Governor Roy Cooper said there had been two deaths there. At least 19 people died during the storm across South Carolina, the Charleston-based Post and Courier newspaper reported, citing local officials. Helene was unusually large for a Gulf hurricane, forecasters said, though a storm's size is not the same as its strength, which is based on maximum sustained wind speeds. A few hours before landfall, Helene's tropical-storm winds extended outward 310 miles (500 km), according to the National Hurricane Center. By comparison, Idalia, a major hurricane that struck Florida's Big Bend region last year, had tropical-storm winds extending 160 miles (260 km) about eight hours before it made landfall. Sign up here. https://www.reuters.com/world/us/hurricane-helene-hits-florida-one-largest-storms-strike-us-2024-09-27/

2024-09-27 05:02

French bonds under pressure, risk premium highest since euro zone debt crisis Stocks also underperforming as political uncertainty premium remains French bank shares remain below levels before Macron called snap election LONDON, Sept 27 (Reuters) - France finally has a new government, but it is unclear how long it will survive, so the political uncertainty hanging over French financial markets is unlikely to lift anytime soon. The right-leaning cabinet, appointed 2-1/2 months after an inconclusive snap election, has a tough task ahead to get reforms or the 2025 budget approved by a very divided parliament. "It's the question mark: How long will that government continue?," said Michael Krautzberger, chief investment officer for fixed income at Allianz Global Investors. With investor unease rising again, we look at how French assets are faring and what's next: 1/ BONDS BRUISED France's government bonds are under renewed pressure. Their closely watched risk premium over German debt is trading around 80 basis points , the most since early August, creeping back to its highest levels since the euro zone debt crisis at more than 85 bps breached in the summer. French bonds also pay a higher yield than Spain's for the first time since 2008, another sign that investors are no longer willing to look past the creaking public finances in France as fiscal and political questions hurt sentiment towards the euro zone's second-biggest economy. How French bonds fare will depend on the country's budget, which will test how long the government can last. It needs to be finalised soon before being passed on to lawmakers by mid-October for approval. Billions of euros in spending cuts and tax increases are needed to close a deficit that risks widening to more than 6% of output. "I would not touch French government debt. There is too much uncertainty for the time being," said Francois Savary, chief investment officer at Genvil Wealth Management. He was particularly cautious ahead of an Oct. 25 rating review by Moody's, which has said that worsening debt metrics could lead to a downgrade of the outlook on its rating -- higher than peers Fitch and S&P Global -- to negative. 2/ STOCKS SHUNNED French stocks have rallied just over 2% since the new government was unveiled last week (.FCHI) , opens new tab, broadly in line with Europe's STOXX 600 (.STOXX) , opens new tab. Yet the overall performance since French President Emmanuel Macron's June 9 decision to call a snap election remains lacklustre and analysts were not hopeful of a rebound anytime soon. France's CAC 40 index (.FCHI) , opens new tab has shed roughly 4% since then, while Germany's DAX (.GDAXI) , opens new tab has risen around 3% and the STOXX 600 has shed just 0.3%. The underperformance is even more stark for French domestically-focused mid-cap stocks, which are down almost 8% (.CACMD) , opens new tab. "The performance of French equities since the appointment of the new government has been unremarkable – probably as its durability remains questionable," said Frederique Carrier, head of investment strategy at RBC Wealth Management. Genvil Wealth Management's Savary added that even though French stocks have cheapened since June, that didn't mean this was a market that needs chasing, with a political uncertainty premium still necessary. 3/ DON'T BANK ON IT French bank shares, hit especially hard in June, also remain below levels traded before Macron's snap election announcement. Societe Generale (SOGN.PA) , opens new tab, BNP Paribas (BNPP.PA) , opens new tab and Credit Agricole (CAGR.PA) , opens new tab - the three biggest French banks - are down by between 5% and 13% since then. Europe's bank index is up around 1.5% over the same period (.SX7P) , opens new tab. Flora Bocahut, co-head of European banks research at Barclays, noted that while the underperformance of French banks had started to ease, signs of weakening business activity were an added concern. France's services sector contracted sharply in September, a survey on Monday showed. "Macro and political uncertainty creates downside risk for French banks and could last for months, but we expect French banks' earnings to rebound into 2026," said Bocahut, citing factors such as cost-savings measures. 4/ NOT HELPING Euro traders are mostly preoccupied with the European Central Bank interest rate outlook rather than with French politics right now. Since hitting two-month lows in June, the euro has rallied 4.8% to just over $1.11. This week, it hit its highest in over a year on investor expectations for steep U.S. rate cuts that have hurt the dollar. A look at the euro's performance against other European currencies shows its struggles. It has lost nearly 1% against the safe-haven Swiss franc in that time and is down by about as much against sterling . France's acute fiscal problems are adding more ballast. With a budget deficit running almost double the euro zone's 3% limit - this is "not a great environment for the euro," ING says. Sign up here. https://www.reuters.com/markets/europe/french-markets-remain-hostage-political-rollercoaster-2024-09-27/

2024-09-27 05:00

Silver up more than 35% in 2024 China growth story to be key for the metal Sept 26 (Reuters) - Silver prices have bubbled up to their highest in over a decade on the back of bullion's stellar bull run and China's stimulus measures, although some analysts expect the rally to fade as industrial sector demand remains a concern. Spot silver - both an investment asset due to its relationship with gold and an industrial metal - rose to $32.71 per ounce on Thursday, its highest since December 2012, and has gained more than 35% so far in 2024, leading the precious metals complex. China's central bank unveiled its biggest stimulus this week since the COVID 19 pandemic and is expected cut its seven-day reverse repo rate. The U.S. Federal Reserve lowered interest rates with a half-percentage-point reduction last week. "China stimulus is giving industrial metals a boost, something silver traders had been waiting for," Ole Hansen, head of commodity strategy at Saxo Bank, said. "Continued gold strength combined with stable to higher industrial metal prices should see silver continue to outperform gold, with the gold/silver ratio falling back towards the 70 to 75 area, potentially driving a 10% outperformance in silver," Hansen added. The gold-silver ratio, denoting how many ounces of silver one ounce of gold can buy, is used by the market to gauge future trends as it indicates silver's current performance against its historical correlation with gold. "Interest rate cuts should provide a bullish impulse for global activity and support silver consumption. We see prices rising to $35 over the next 3 months and $38 over the next 6-12 months," Citi analyst Max Layton said. Macquarie, which expects that silver market deficits will persist throughout its 5-year forecast window, said investor flows are likely to remain key for near-term price action, with ETF holdings arguably offering the greatest scope for support. However, consolidation in China's solar industry and slower growth in the world's second biggest economy could pose headwinds for silver in the near-term. "China's newest support measures on their own will probably be insufficient to drive a turnaround in growth and traders do appear to be overestimating the likelihood of another 50 bps cut by the Fed in November," said Hamad Hussain, assistant climate & commodities economist at Capital Economics. "Accordingly, the rally in silver prices is unlikely to be sustained over the next few months as some of the tailwinds boosting silver demand fade." In top consumer China, industrial output growth slowed to a five-month low in August, underlining weakening domestic demand. "We believe that silver is primarily dependent on gold in terms of its medium to longer-term performance rather than any silver-market specifics," said Carsten Menke, an analyst at Julius Baer. Sign up here. https://www.reuters.com/markets/commodities/china-stimulus-mighty-gold-puts-silver-streak-not-without-risk-2024-09-26/

2024-09-27 04:34

A look at the day ahead in European and global markets from Stella Qiu What a week it's been for Beijing. China's leadership looks to be finally coming around to the reality of a faltering economy, and doing what markets wanted. You name it: RRR cuts, rate cuts, steps to bolster the share markets and even more fiscal support. Beaten-down Chinese shares are now headed for their best week since 2008, with blue-chips (.CSI300) , opens new tab up 3.6% on Friday and on track for a weekly gain of 15%. Hong Kong's Hang Seng index is headed for a nearly 13% weekly rise - its biggest since 1998. It was a good week for just about every market whose fortunes are tied to China. An index of mainland Chinese property stocks (.CSI000952) , opens new tab surged 20% for the week. Iron ore prices clambered back above $100 a metric ton, copper broke above the key $10,000 a ton mark, gold hit another record and silver hit a 12-year top. It remains to be seen if the rally will last. After all, China's A-share market has repeatedly disappointed investors, with the benchmark CSI300 no higher than it was in 2007 while the S&P 500 is up almost 300%. The China markets will be on hold after today for a week-long public holiday, and investors could have a change of heart if China's reticent consumers don't step up to the plate and boost spending, to get economic growth back in track. While the week is drawing to close, there are still a couple more events on the horizon for investors to keep tabs on. Japan's ruling party is holding a leadership contest that is looking to be one of the most unpredictable in decades. The yen is jittery, hitting a three-week low of 145.56 per dollar on Friday. Sanae Takaichi, minister in charge of economic security who has said the BOJ hiked rates too early, is among the front-runners. If she wins the contest, the yen could fall as markets further discount the chance of another rate hike this year. It's currently priced at about 30%. Results from the Liberal Democratic Party's first-round balloting are expected around 14:20 JST (0720 GMT), with a likely run-off between the top two candidates following around 1530 JST (0830GMT). Also on the schedule is the U.S. core personal consumption expenditures (PCE) price index, the Fed's preferred measure of inflation. Forecasts are centred around a small monthly rise of 0.2% and risks seem biased to the downside. A benign number would provide scope for another outsized half-point rate cut from the Fed in November, although much will ultimately depend on the payrolls report next week. Key developments that could influence markets on Friday: -- Japanese leadership contest -- France CPI for September, Germany unemployment rate -- U.S. PCE data Sign up here. https://www.reuters.com/markets/europe/global-markets-view-europe-2024-09-27/

2024-09-27 04:04

WASHINGTON/NEW YORK, Sept 27 (Reuters) - Many Wall Street executives have reservations about backing either candidate in the U.S. presidential election, worried that former President Donald Trump's policies will hurt the economy but wary Vice President Kamala Harris will lean too far left. While multiple Wall Street heavy-hitters including Bill Ackman, John Paulson and George Soros have backed a candidate, many other senior executives are still weighing the economic policies central to the closely fought race and the ramifications for legal and democratic institutions, according to conversations with two dozen executives in recent weeks. Despite a track record implementing Wall Street-friendly measures, Republican candidate Trump's policies threaten to create economic and policy instability, many executives said. While Harris would be a safe pair of hands, she has only been the Democratic candidate since late July when President Joe Biden exited the race and remains a big unknown, they said. Many worry the Vice President will continue Biden's regulatory crackdown on lucrative Wall Street businesses. Among the executives were Republican and Democrat supporters, including a handful who are publicly backing Trump or Harris, and others with no obvious partisan affiliation. "Most expect Trump to continue where he left off, which is certainly more populist, protectionist and aggressively deregulatory," said Bruce Mehlman, partner at bipartisan lobbying firm Mehlman Consulting with clients in all sectors. "But they're eager to better understand who Harris is and what she believes," Mehlman said, adding it did not appear that Harris' Wednesday economic speech had offered more insight for Wall Street firms. As with his first presidency, Trump is promising to cut taxes and regulations, but most executives said the benefits could be erased by his planned import tariffs which could spark inflation, while tax cuts could widen the U.S. deficit. Trump ramped up his planned tariffs in comments this week. Karoline Leavitt, Trump campaign National Press Secretary, said in a statement that Wall Street investors want Trump to win because they remember that his policies "fueled growth, drove down inflation, and kept more money in everyone's pockets." Billionaire investor and Trump backer Paulson told Reuters on the sidelines of a September New York event at which Trump outlined his economic plan that tariffs would boost revenues, helping to reduce the deficit. Harris' plan, which analysts predict would be better for the economy, calls for hiking taxes, likely denting company earnings and stocks but partly offsetting an expected widening of the deficit. She has said little on financial policy but has touted her tough stance on banks as a former prosecutor and said she will continue Biden's assault on hidden bank fees. A Harris spokesperson pointed Reuters to endorsements by hundreds of economists , opens new tab and CEOs. In an email to Reuters, billionaire entrepreneur and Harris backer Mark Cuban noted that stocks rose when company taxes were higher, adding: "Anything that is a step towards reducing the deficit is a plus." But he said that both candidates are making promises they may not be able to keep. "Neither candidate's policies have any details about how they would get passed." For many firms, a Harris White House and Republican Senate, which would block tax increases and force Harris to pick moderates for top jobs, is the best-case scenario. So far, donors tied to the securities and investment sectors have given $8.7 million , opens new tab to the Biden/Harris campaign versus about $3 million , opens new tab to Trump, data from nonpartisan donations tracker OpenSecrets as of Aug. 21 shows. Those contributions, capped in the thousands of dollars, come from individuals and political action committees (PACs) and are not comprehensive because there are several other ways to route cash to support candidates. STABILITY, POPULISM In a nod to the policy whiplash and personnel churn of Trump's first presidency, his felony conviction and role in the Jan. 6, 2021 attack on the U.S. Capitol, some executives also worried Trump would undermine Democracy and the rule of law. A few flagged concerns about his stances on Federal Reserve independence, immigration and abortion. Michael Bright, chief executive of the Structured Finance Association, a Washington lobby group representing lenders and investors, said that in addition to Jan. 6, some of his members had soured on Trump due to his role in helping to overturn federal abortion rights when president. "I would say financial services voters are split pretty evenly," said Bright, whom Trump nominated in 2018 to run government housing agency Ginnie Mae. Many will vote "with their hearts" for Harris, he added. The role of populism in personnel picks was another theme. Several executives fretted Harris would stick with Biden's progressive agency heads, although a few said they believe she may be friendlier to the industry than Biden. "She is practical and pragmatic," said Jon Henes, Harris' national campaign finance chair in 2020 and CEO of corporate consultancy C Street Advisory Group, adding Harris believes in sensible regulation that allows for transparency and certainty. A more populist Trump and Republican party may pick inexperienced loyalists hostile to Wall Street to lead the agencies, some executives said, although others believe he would again pick traditional industry conservatives. Trump's appointment of Cantor Fitzgerald CEO Howard Lutnick as co-chair of his transition team may be a good sign, some said. Lutnick is tapping his Wall Street network to staff a potential second Trump administration. Lindsey Johnson, CEO of the Consumer Bankers Association, said Trump can "draw from a deep well of people that were in the Administration last time that have great experience in the financial industry." Sign up here. https://www.reuters.com/world/us/many-wall-street-executives-are-worried-about-trump-wary-harris-2024-09-27/

2024-09-27 02:52

MUMBAI, Sept 27 (Reuters) - The Indian rupee is likely to open little changed on Friday as traders gauge the pullback in odds of another 50-basis-point rate cut by the U.S. Federal Reserve, while recent gains in the yuan are expected to keep Asian currencies supported. The 1-month non-deliverable forward indicated that the rupee will open at 83.65-83.66 to the U.S. dollar compared with 83.6425 on Thursday. Asian currencies were mixed with the Indonesian rupiah up 0.5%, while the offshore Chinese yuan pared gains after a slew of economic stimulus measures drove the currency to an over 16-month high of 6.96. The rupee will be "supported on the margins" by the yuan's rise and is likely to hover between 83.50 and 83.80 in the near term, a foreign exchange trader at a private bank said. The local currency's failure to rise above its key resistance level at 83.50 has trimmed positive bias on the currency, the trader added. Month-end dollar bids could pressure the rupee. The dollar index was up 0.1% at 100.7 in Asia hours after a host of U.S. data released on Thursday indicated a relatively healthy economy. U.S. jobless claims declined to a four-month low while gross domestic product grew at an unrevised 3% in the April-June quarter. Odds of another large rate reduction by the Fed in November declined to 50% after the data was released, down from near 60% a day earlier, according to CME's FedWatch tool. U.S. personal consumption expenditure (PCE) inflation data, due later in the day, will be in focus for cues on the path of policy rates. Markets are leaning towards "a 50bp Fed rate cut at the November meeting, but upcoming data and key risk events such as the U.S. elections will test their resolve to front-load cuts," Societe Generale said in a note. KEY INDICATORS: ** One-month non-deliverable rupee forward at 83.76; onshore one-month forward premium at 11.50 paisa ** Dollar index up 0.1% at 100.7 ** Brent crude futures down 0.5% at $71.3 per barrel ** Ten-year U.S. note yield at 3.79% ** As per NSDL data, foreign investors sold a net $76.2mln worth of Indian shares on Sep. 25 ** NSDL data shows foreign investors bought a net $4.4mln worth of Indian bonds on Sep. 25 Sign up here. https://www.reuters.com/markets/currencies/rupee-gauge-trimmed-bets-jumbo-fed-cut-us-inflation-data-focus-2024-09-27/