2024-09-09 00:25

Focus on Wednesday's CPI report Dollar rebounds on pared rate cut expectations ECB seen cutting 25 bps on Thursday, Fed the same next week Crude gains as hurricane threat raises supply concerns NEW YORK, Sept 9 (Reuters) - U.S. stocks closed sharply higher on Monday and the dollar strengthened as markets awaited key data and actions from central banks. All three major U.S. stock indexes surged more than 1%, with the S&P 500 and the Dow ending a four-session losing streak, bouncing back from their biggest weekly percentage losses since March 2022. The tech-laden Nasdaq staged a comeback after suffering its largest Friday-to-Friday decline since January 2022 last week. The greenback strengthened ahead of Wednesday's much anticipated Consumer Price Index report. "Two things are happening," said Greg Bassuk, CEO of AXS Investments in New York. "Investors are putting cash back to work after last week's over-selling, and secondly, everyone is bullish on a Fed rate cut." "There's a lot of dip-buying and Fed optimism today," Bassuk added. Last week mixed data, particularly the August employment report, caused investors to dial back expectations that the U.S. Federal Reserve could issue an outsized 50 basis point rate cut when it convenes for its policy meeting next week. On Wednesday, the Labor Department's Consumer Price Index is expected to show underlying inflation remains on its meandering path back down toward the central bank's 2% goal. At last glance, financial markets have baked in a 71% likelihood that the Fed will lower its key policy rate by 25 basis points at the end of next week's meeting, with a 29% probability of a 50 basis point reduction, according to CME's FedWatch tool. The Dow Jones Industrial Average (.DJI) , opens new tab rose 484.28 points, or 1.2%, to 40,829.69, the S&P 500 (.SPX) , opens new tab gained 62.65 points, or 1.16%, at 5,471.07 and the Nasdaq Composite (.IXIC) , opens new tab added 193.77 points, or 1.16%, at 16,884.60. European stocks staged a comeback with the benchmark STOXX 600 recovering from last week's steep declines as investors awaited an expected interest rate cut from the European Central Bank later in the week. "Last week there was a lot of weak economic data in the U.S. and globally, and it had investors skittish over recessionary fears," Bassuk said. "With dip-buying and greater confidence that many central banks are going to be moving from hawkish to dovish policy there's more optimism that the central banks can avoid a global recession." The pan-European STOXX 600 index (.STOXX) , opens new tab rose 0.82% and MSCI's gauge of stocks across the globe (.MIWD00000PUS) , opens new tab gained 0.58%. Emerging market stocks lost 1.07%. MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) , opens new tab closed 1.13% lower, while Japan's Nikkei (.N225) , opens new tab lost 0.48%. Here is a look at world stock indexes as of Friday's close: U.S. Treasury yields waffled in choppy trading amid uncertainty over the size of the Fed's expected rate cut this month. Benchmark 10-year notes last rose 1/32 in price to yield 3.7061%, from 3.71% late on Friday. The 30-year bond last rose 8/32 in price to yield 4.0066%, from 4.02% late on Friday. The dollar regained strength against a basket of world currencies as investors looked ahead to key inflation data and pared expectations regarding the size of next week's policy rate cut. The dollar index (.DXY) , opens new tab rose 0.41%, with the euro down 0.42% to $1.1037. The Japanese yen weakened 0.48% versus the greenback at 143.01 per dollar, while Sterling was last trading at $1.3072, down 0.39% on the day. Crude rose as concerns over supply worries arising from forecasts of a hurricane hitting Louisiana this week helped oil prices rebound from last week's heavy losses. U.S. crude rose 1.54% to settle at $68.71 per barrel, while Brent settled at $71.84 per barrel, up 1.10% on the day. Gold prices pared gains but held their ground as investors awaited key inflation data. Spot gold added 0.4% to $2,505.75 an ounce. Sign up here. https://www.reuters.com/markets/global-markets-wrapup-1-2024-09-09/

2024-09-08 21:47

Sept 9 (Reuters) - A look at the day ahead in Asian markets. Asian stocks are set to open sharply lower on Monday, tracking Wall Street's slump on Friday after investors interpreted U.S. jobs data and comments from top Fed officials as a 'worst of both worlds' outcome - further labor market weakness, but little appetite to cut interest rates by 50 basis points next week. Japanese futures point to the Nikkei 225 index opening down more than 3%, dragged lower also by the yen's strength, another indication of the risk aversion permeating world markets. The S&P 500 and the Dow's losses on Friday secured the biggest weekly drop since March 2023, and the Nasdaq's 2.6% fall confirmed its biggest weekly loss since January 2022. If heightened anxiety over the U.S. economic and policy outlook were not enough, Asia's calendar is packed with top-tier economic indicators from China, Japan and Taiwan that will be of potential global significance too. Japan releases bank lending, trade, current account and revised GDP growth figures, Taiwan releases trade data, and perhaps most important of all, China unveils producer and consumer price inflation figures. Overseas investors are growing more cautious on Asian stocks. LSEG data show they were net sellers in August, while JP Morgan recently ditched its buy recommendation on Chinese stocks. Chinese stocks on Friday closed at a seven-month low , opens new tab. The signals from the United States on Friday were probably more nuanced than markets' negative reaction would suggest. The unemployment rate ticked lower, wage growth accelerated and officials reaffirmed their confidence in a 'soft landing'. Fed Governor Christopher Waller or New York Fed President John Williams both said on Friday that it is time to cut rates. But in prepared remarks and question and answer sessions, neither signaled that a 50 basis point cut is in the offing. Oil and commodity prices, meanwhile, are falling rapidly, another sign of investors' growing unease about the global economic picture. Asia's calendar on Monday will deliver another few pieces of that jigsaw. Figures from Beijing are expected to show that annual consumer inflation in China accelerated to 0.7% in August from 0.5% in July. That would be welcome progress. But the fight against deflation is nowhere near over - data on Monday are expected to show that factory gate prices fell 1.4% year-on-year in August, nearly twice the pace of July's 0.8% fall. Former central bank governor Yi Gang on Friday urged the country to do more to fight deflationary pressures with more fiscal stimulus and accommodative monetary policy. Japan's second quarter GDP growth is expected to be revised up slightly, while Taiwan's export growth is forecast to have more than doubled in August to 7.35%. Taiwan's TSMC is the world's largest contract chipmaker and Nvidia's chip manufacturing partner. Here are key developments that could provide more direction to Asian markets on Monday: - China PPI, CPI inflation (August) - Japan GDP (Q2, revised) - Taiwan trade (August) Sign up here. https://www.reuters.com/markets/asia/global-markets-view-asia-graphic-pix-2024-09-08/

2024-09-08 17:43

Sept 8 (Reuters) - Italy is looking to create a new company to build small nuclear reactors, and officials are in preliminary talks with state-backed Ansaldo Nucleare SpA, state energy giant Enel (ENEI.MI) , opens new tab and UK-based Newcleo to develop the plan, Bloomberg News reported on Sunday, citing people familiar with the matter. The move comes after the energy minister on Saturday disclosed plans to draft rules to allow the use of new nuclear power technologies by early 2025. If the Italian parliament approves the draft legislation in the course of 2025 it will potentially reverse the country's current ban on nuclear power production. Discussions regarding an international partner are underway, though a final choice hasn't been made, the report added. Ansaldo Nucleare, Enel and Newcleo did not immediately respond to Reuters' request for comment. Nuclear fission as a source of energy is a controversial topic in Italy, where nuclear power plants are banned following referendums in 1987 and 2011. Sign up here. https://www.reuters.com/business/energy/italy-talks-create-nuclear-power-firm-bloomberg-news-reports-2024-09-08/

2024-09-08 16:50

MAIDUGURI, Nigeria, Sept 8 (Reuters) - At least 48 people were killed on Sunday in a fuel tanker truck explosion following a collision with another vehicle in north-central Nigeria, the state's disaster management agency said. The State Emergency Management Agency in north-central Niger state said the fuel truck collided with a truck carrying travellers and cattle. Several other vehicles were also caught up in the accident, it said. The agency's spokesperson Hussaini Ibrahim put the death toll at 48 and officials were still trying to clear the scene of the incident. Nigeria's state-owned firm NNPC Ltd last week hiked the price of gasoline by at least 39%, the second major increase in more than a year but shortages have continued, forcing motorists to queue for hours in the country's major cities and towns. Sign up here. https://www.reuters.com/world/africa/least-48-killed-nigerian-fuel-truck-explosion-2024-09-08/

2024-09-08 13:00

NEW YORK, Sept 6 (Reuters) - Uncertainty over the U.S. economy's health is rippling through markets, adding fuel to an already-volatile period that has investors grappling with a shift in Federal Reserve policy, a tight U.S. election and worries over stretched valuations. U.S. stocks tumbled on Friday after closely watched jobs data showed labor market momentum slowing more than expected, suggesting a narrower path for the U.S. to achieve a soft landing, in which the Fed is able to cool inflation without badly damaging economic growth. The Fed is expected to cut interest rates at its Sept. 17-18 meeting, but the data revived fears that months of elevated borrowing costs have already started to pressure the economy. That is a potentially unwelcome development for investors, after prospects for rate cuts against a background of resilient growth helped drive the S&P 500 (.SPX) , opens new tab to record highs this year. "The data shows that we remain on the soft-landing path, but clearly there's more downside risks to which the markets are going to be sensitive," said Angelo Kourkafas, senior investment strategist at Edward Jones. "The expectation for elevated volatility is a realistic one." Evidence of ebbing risk appetite showed up across markets. The S&P 500 dropped 1.7% on Friday and has lost nearly 4.3% in the past week, its worst weekly decline since March 2023. Nvidia (NVDA.O) , opens new tab, the poster child of this year's artificial intelligence excitement, was down over 4% and stood near its lowest level in about a month, falling along with other high-flying technology names. Meanwhile, the Cboe Market Volatility index (.VIX) , opens new tab, also called Wall Street's "fear gauge," hit its highest level in nearly a month on Friday. "There's concern that the Fed is not going to be reacting quick enough or more forcefully enough to help prevent something more sinister," said Keith Lerner, co-chief investment officer, Truist Advisory Services. Several factors threaten to compound the market's uncertainty. Futures bets on Friday showed investors pricing in a nearly 70% chance of a 25 basis point reduction by the Fed, and 30% chance of a 50 bp cut. For many, however, the issue remains far from settled. "Markets have had to grapple with - just as the Fed is doing - whether the August payroll data reflects a labor market normalizing towards pre-COVID levels or whether it's indicative of an economy losing dangerous momentum," Quincy Krosby, chief global strategist for LPL Financial, said in written commentary. Others took a dimmer view. Citi analysts said the report warranted a 50 basis point cut later this month. "The takeaway from the range of labor market data is clear – the job market is cooling in a classic pattern that precedes recession," analysts at Citi wrote. Inflation data next week could shed further light on the strength of the economy and help solidify bets on how much the Fed might cut rates. Valuation concerns are also reemerging. The S&P 500, which is up over 13% this year, is trading at a price-to-earnings ratio of nearly 21 times expected forward 12-month earnings estimates as of Thursday, well above its historical average of 15.7, according to LSEG Datastream. Despite a recent swoon, the S&P 500 technology sector (.SPLRCT) , opens new tab - by far the biggest group in the index - is trading at over 28 times expected earnings, compared to its long-term average of 21.2. "We've come a long way in a relatively short period of time and I think you're starting to see some businesses do the math on AI and ask whether it's really worth the cost, which will weigh on the big tech stocks," said Mark Travis, a portfolio manager at Intrepid Capital Management. Investors are also closely watching a tight U.S. presidential election which is starting to head into the home stretch. The race between Democrat Kamala Harris and Republican Donald Trump could draw more investor focus on Tuesday, when the two candidates debate for the first time ahead of the Nov. 5 vote. So far, the market gyrations have bolstered September's reputation as a tough time for investors. The S&P 500 has fallen an average of nearly 0.8% in September since 1945, making it the worst month for stocks, CFRA data showed. The index is already down 4% since the month began. "Investors are saying let's hope we can have a soft landing," said Burns McKinney, senior portfolio manager at NFJ Investment Group. "It still feels like it's fairly likely, but with each weaker jobs number it's becoming less and less the base case." Sign up here. https://www.reuters.com/markets/us/wall-st-week-ahead-economic-worries-back-wall-streets-radar-after-jobs-data-2024-09-06/

2024-09-08 05:57

Strongest storm in Asia this year kills 21 in Vietnam Yagi weakens but risks of flash floods, landslides remain Storm caused power and telecommunications outages HANOI/HAIPHONG, Sept 8 (Reuters) - Typhoon Yagi, Asia's most powerful storm this year, was downgraded to a tropical depression on Sunday, after wreaking havoc in northern Vietnam, where it damaged factories and infrastructure in export-oriented industrial hubs. Vietnam's meteorological agency issued the downgrade on Sunday but cautioned about the ongoing risk of flooding and landslides as the storm, the strongest to hit the country in decades, moved westwards. On Saturday, Yagi disrupted power supplies and telecommunications in Vietnam's capital, Hanoi, causing extensive flooding, felling thousands of trees and damaging homes. The typhoon and subsequent landslides and floods killed 21 people in Vietnam and injured 229, according to preliminary estimates from the government, after claiming the lives of four people on the southern Chinese island of Hainan and 20 in the Philippines, the first country it hit a week ago. In Haiphong, a Vietnamese coastal city of 2 million which hosts factories of several multinationals, industrial parks remained closed on Sunday, workers and managers told Reuters. One was flooded, and workers said they had been sent home after they tried to go to work unaware of the conditions at their plants because telecommunications networks had not been restored. "The damage for the factories is really significant. Some have lost roofs or entire front facades," said Bruno Jaspaert, head of DEEP C industrial zones, which host plants from over 150 investors in Haiphong and the neighbouring province of Quang Ninh. He said at least 80% of the factories had been damaged but the industrial parks had not been flooded. "It might take a month if things go well before I fully recover from this damage," said Do Van Truong, a 45-year-old shop owner in Haiphong, noting the ceiling of his seafood shop had collapsed while power and water supplies had not yet been restored. Several highways in the north of the country were flooded or seriously disrupted, state media reported, publishing pictures and footage of landslides. RISK OF FLASH FLOODS After it made landfall in Vietnam on Saturday afternoon, Yagi triggered waves as high as 4 metres (13 feet) in coastal provinces, leading to extended power and telecommunication outages that have complicated damage assessment, the government said. The meteorological agency warned of continued "risk of flash floods" in riverside areas, including in Hanoi. As winds subsided, authorities in Hanoi rushed to clean up streets from toppled trees scattered across the city centre and other neighbourhoods. "The storm has devastated the city. Trees fell down on top of people's houses, cars and people on the street," said 57-year-old Hanoi resident Hoang Ngoc Nhien. Hanoi's Noi Bai international airport, the busiest in northern Vietnam, reopened on Sunday after closing on Saturday morning. (This story has been corrected to say 21 people were killed, not 18, in the first bullet point, and changes the headline) Sign up here. https://www.reuters.com/world/asia-pacific/typhoon-yagi-weakens-after-hitting-vietnams-capital-hanoi-2024-09-08/