2024-08-28 06:06

Wall Street indexes finish slightly lower Nvidia's results beat analyst estimates Dollar rebounds Gold prices slip Crude oil drops NEW YORK/LONDON, Aug 28 (Reuters) - Global equity markets eased while the U.S. dollar rebounded on Wednesday, and then chipmaker Nvidia's better-than-expected results failed to impress some investors and the company's stock fell 3% in extended trading. Wall Street's main indexes finished lower, the Dow Jones Industrial Average (.DJI) , opens new tab fell 0.39% to 41,091.42, the S&P 500 (.SPX) , opens new tab lost 0.60% to 5,592.18 and the Nasdaq Composite (.IXIC) , opens new tab lost 1.12% to 17,556.03. Europe's benchmark STOXX index (.STOXX) , opens new tab climbed 0.33% while Japanese stocks (.N225) , opens new tab closed 0.22% higher. MSCI's gauge of all stocks across the globe (.MIWD00000PUS) , opens new tab was 0.42% lower at 827.32. Nvidia (NVDA.O) , opens new tab's third-quarter revenue forecast of $32.5 billion surpassed Wall Street estimates after markets closed. The report still failed to impress the most bullish investors who have driven a dizzying rally in its shares as they bet billions on the future of generative artificial intelligence. Shares of the Santa Clara, California-based company fell 3% in extended trading. Nvidia's stock price is up some 3,000% since 2019 and with a market capitalisation of $3 trillion, a move in its share price affects the broader market. It finished down 2% at $125.61 during regular hours trading. "They beat the average estimates because they came in around $32 billion and average estimates were $31 billion but some people on the street have them up at like $37 billion revenue estimates," said Michael Ashley Schulman, chief investment officer at Running Point Capital in Los Angeles. "I think you're seeing some disappointment on some bets but not really disappointment on the company." A preliminary estimate of second quarter U.S. gross domestic product is due on Thursday. The Fed's preferred inflation measure - the core personal consumption expenditures (PCE) index - will be released on Friday. Markets, which are fully priced for a 25 basis point U.S. interest rate cut next month, see just over 100 basis points of easing by the end of the year. The yield on benchmark U.S. 10-year Treasury notes , which moves inversely to the price, rose 0.8 basis points to 3.841%. "The good news is all pretty much priced in whether that be [Federal Reserve Chair Jerome] Powell's promise more or less to cut rates in September and the fact that we're now pricing a soft landing again," said David Spika, chief markets strategist at Turtle Creek Wealth Advisors in Dallas. "The economic data has been supportive of the fact that the economy is not falling apart." After a recent run of declines, the dollar was advancing. The dollar index , which measures the greenback against a basket of currencies including the yen and the euro, gained 0.5% at 101.10, with the euro down 0.63% at $1.1114. Gold prices were hurt by the stronger U.S. dollar with spot gold lost 0.68% to $2,507.50 an ounceand U.S. gold futures settled 0.6% lower at $2,537.80. Oil prices fell on concerns about Chinese demand and risks of a broader slowdown. Brent crude futures settled down 1.13% at $78.65 a barrel. U.S. West Texas Intermediate crude futures fell 1.34% to $74.52. Sign up here. https://www.reuters.com/markets/global-markets-wrapup-1-2024-08-28/

2024-08-28 06:05

EIA data shows US crude, gasoline stocks fell last week China demand concerns persist Libya's oilfield closures continue to escalate Aug 28 (Reuters) - Oil prices settled 1% lower on Wednesday after a smaller-than-expected draw in U.S. crude stockpiles and as concerns over Chinese demand persisted, though losses were capped by supply risks in the Middle East and Libya. Brent crude futures settled down 90 cents, or 1.13%, at $78.65 a barrel. U.S. West Texas Intermediate crude futures fell $1.01, or 1.34%, to $74.52. Prices lost more than 2% on Tuesday, having gained 7% over the previous three days to more than $81 a barrel for Brent and $77 for WTI. U.S. crude inventories dropped by 846,000 barrels to 425.2 million barrels last week, data from the Energy Information Administration showed, less than analysts' expectations in a Reuters poll for a draw of 2.3 million barrels. Refining activity rose during the week. "It is a little surprising to see such a small crude draw if refinery runs were really that strong, at a six-week high," said Matt Smith, lead oil analyst at Kpler. "Ongoing strength in imports and a tick lower in exports helped keep the draw in check," he added. China demand worries also continued to weigh on prices as recent data pointed to a struggling economy and slowing oil demand from refiners. "Demand in China remains weak and the expected second-half rebound has yet to show credible signs of commencing," Amarpreet Singh, an analyst at Barclays, said in a note. ONGOING SUPPLY RISKS The potential loss of Libyan oil output and the possible expansion of the Israel-Gaza conflict to include Iranian-backed militants from Hezbollah in Lebanon remained the largest risks to oil markets, limiting the price declines on Wednesday. Several oilfields across Libya have halted output as a dispute continues between rival government factions over control of the central bank and oil revenue. The dispute puts about 1.2 million barrels per day (bpd) of production at risk. The Libyan disruptions should tighten the oil market, considering real barrels are removed, but here investors want to see a drop in Libyan crude exports first, said Giovanni Staunovo, an analyst at UBS. In the Middle East, fighting continued in the Gaza Strip between Israel and Hamas militants, with no signs yet of a concrete breakthrough in ceasefire talks in Cairo. Over the weekend, Israel and Hezbollah bombarded each other with rockets and missiles across the Lebanese border. Geopolitical risks will continue to put world crude oil prices on edge, said Tim Snyder, chief economist at Matador Economics. Sign up here. https://www.reuters.com/business/energy/oil-rebounds-geopolitics-demand-concerns-whipsaw-investors-2024-08-28/

2024-08-28 06:01

LITTLETON, Colorado, Aug 28 (Reuters) - U.S. demand for power and electricity is on track to hit a record in 2024, but likely already peaked during July after power generation needs declined slightly so far in August. Total power generation across the lower 48 states from Jan. 1 through Aug. 26 was roughly 115 million megawatt hours (MWh), according to LSEG, which was up 3.4% from the same period in 2023 and the highest since at least 2021. The highest full-month power generation tally so far was 17.24 million MWh in July, which was the highest monthly total recorded by LSEG since 2021. That total likely marks the high point for power generation this year, as overall power demand tends to decline from August as the use of air conditioning for cooling drops off. The same demand patterns are evident in U.S. electricity use, which has peaked in July in eight out of the past nine years, again due to reduced use of power-hungry cooling systems once temperatures typically peak for the year in July. If power and electricity use now trend lower, generators may be able to trim fossil fuel use in electricity production going forward, and so limit any further rise in power pollution which has already climbed above year-ago levels in 2024. TOPPING OUT Total power generation in July was only 0.1% higher than in July 2023, but marked the fourth consecutive month that 2024's generation totals surpassed the corresponding month in 2023, according to LSEG. However, generation for Aug. 1-26 this year has been 1.6% less than the same period in 2023, marking a potential turning point in terms of 2024 generation trends. The August tally was also about 1.4% below the first 26 days of July this year, which also indicates that power generators were able to throttle back generation slightly in August from July. Average temperatures across the United States have scaled new records this summer in several parts of the country, but have been slightly cooler in key areas during August from July. The average recorded temperature for July in California - the most populous U.S. state - was 80.5 degrees Fahrenheit (26.9 degrees Celsius), according to LSEG. That average has dropped to 75.1F (23.9C) so far in August, and so likely resulted in reduced air conditioner use this month compared to earlier in the summer. EMISSIONS IMPACT To boost total generation by 3.4% from Jan. 1 through Aug. 26 from the same period in 2023, U.S. power producers lifted clean energy generation from solar farms by 37%, wind farms by 8.1%, nuclear plants by 2.6%, and hydro dams by 0.7%, according to LSEG. However, as total power demand has hit consecutive records in recent months, power producers have also needed to lift generation from natural gas, which hit a new all-time high in July of just over 8 million MWh. The emissions impact of that high gas-fired generation total in July was 190.74 million metric tons of carbon dioxide and equivalent gases, according to energy think tank Ember. That was the U.S. power sector's highest monthly pollution tally since August 2021, and resulted in the first increase in U.S. power sector emissions over the January-to-July period since 2021. During August, U.S. gas-fired generation has remained above year-before levels, but is down from July's high output rates and so should result in a drop in monthly power emissions once the data is released in September. And if power firms can continue to curb the use of coal-fired plants and further lower gas-fired generation over the rest of the year, then power emissions for 2024 as a whole should only show a modest year-over-year rise despite a notable expected increase in total generation and power use. Sign up here. https://www.reuters.com/business/energy/robust-us-power-electricity-use-likely-peaked-july-2024-maguire-2024-08-28/

2024-08-28 05:45

Markets await US PCE data due on Friday Dollar up 0.6% against its rivals Gold ETFs saw modest net inflows last week- WGC Aug 28 (Reuters) - Gold prices dropped on Wednesday, hurt by a stronger U.S. dollar as investors focused on key inflation data from the world's largest economy for clues on the size of the Federal Reserve's potential interest-rate cut in September. Spot gold was down 0.8% at $2,505.03 an ounce by 01:41 p.m. ET (1741 GMT), having slipped as much as 1.1% earlier in the session. U.S. gold futures settled 0.6% lower at $2,537.80. The dollar climbed 0.6%, making gold more expensive for other currency holders. "We're seeing a little pressure coming from a bit firmer dollar. And at this point, we're waiting for further information to drive this market either one direction or the other based on that inflationary data," said David Meger, director of metals trading at High Ridge Futures. "So what we're seeing here is profit-taking consolidation ahead of that report." Investors are now looking out for chip giant Nvidia's (NVDA.O) , opens new tab quarterly earnings due later in the day and U.S. personal consumption expenditure (PCE) data due on Friday. If Friday's PCE numbers come in lower than expected, it could boost expectations of a more dovish Fed, creating upside potential for gold, said Ricardo Evangelista, senior analyst at ActivTrades in a note. Markets are pricing in about a 63.5% chance of a 25-basis points U.S. rate cut in September and a 36.5% chance of a 50-bps cut, according to the CME FedWatch tool. Gold ETFs saw modest net inflows of 8 metric tons ($403 million) last week, led by North American funds, according to the World Gold Council. Elsewhere, China's net gold imports via Hong Kong rose 17% in July, marking the first increase since March, data showed on Tuesday. China is a major consumer of gold, this uptick in gold demand could support global gold prices. Among other precious metals, spot silver fell 2.5% to $29.24 an ounce, platinum slipped 2.1% to $933.90 and palladium was down 2.6% at $944.58. Sign up here. https://www.reuters.com/markets/commodities/gold-edges-down-stronger-dollar-market-awaits-us-inflation-data-2024-08-28/

2024-08-28 05:36

U.S. dollar set for steep monthly drop Traders await Nvidia earnings, U.S. and euro zone inflation data Bitcoin falls sharply NEW YORK, Aug 28 (Reuters) - The U.S. dollar gained on Wednesday due to month-end buying and technical factors after recent declines that pushed it to its weakest in more than a year, as traders awaited data that could dictate the pace of the Federal Reserve's imminent easing cycle. Sharp bouts of volatility hit foreign exchange markets this month as worries around a potential U.S. recession and hawkish signals from the Bank of Japan hammered the dollar and sent other major currencies soaring. Traders also awaited earnings from artificial intelligence (AI) chip giant Nvidia (NVDA.O) , opens new tab, which has sparked a frenzy on Wall Street and beyond in recent years. The dollar has also been sensitive to moves in equity markets this year. "With a series of potentially treacherous event risks looming, including this evening's earnings release from Nvidia and next Friday's hugely important non-farm payrolls report, traders are cutting exposures and buying the greenback against high-beta currencies," said Karl Schamotta, chief market strategist, at Corpay in Toronto. The dollar index , which measures the U.S. unit against a basket of six major currencies, rose 0.5% to 101.11, on pace for its largest daily percentage gain since mid-June. For the month of August, however, the greenback has fallen 2.8%, its worst monthly decline since November 2023. It reached a 13-month low of 100.51 in the previous session, weighed down by a recent sharp re-evaluation of expectations for Fed rate cuts. "The dollar's rise today is warranted given the move lower this month. We have seen a sharp depreciation in the dollar, being down 5% in the second half of 2024," said Boris Kovacevic, global macro strategist at Convera in Vienna, Austria. "Looking at the flows, I would attribute the dollar bid today to the usual month-end flows, especially given the fall in the dollar this month." Investors also expect the Fed to begin cutting interest rates next month following Chair Jerome Powell's dovish tilt last week, with the debate now centered on whether or not it will do a super-sized 50-basis point cut, or the standard 25-bp easing. Current pricing indicated a 37% chance of the larger cut, unchanged from late on Tuesday, according to LSEG calculations. Markets also priced in about 105 bps of easing by the end of the year. DATA AHEAD A preliminary estimate for U.S. gross domestic product in the second quarter is due later this week, along with the core personal consumption expenditures (PCE) index, the Fed's preferred inflation measure. Both could likely drive the dollar lower if the numbers come out weaker than expected. But given that markets have been expecting rate cuts from September for weeks now, the downside momentum on the dollar could be waning, with support built around 100.18/30 in the dollar index , said Matt Simpson, senior market analyst at City Index. "More broadly, valuations look overdone across a range of asset classes. If investors get cold feet in the coming weeks, the dollar's global dominance...might come in handy once again," said Corpay's Schamotta. Against the yen, the dollar rose 0.5% to 144.685 yen , moving away from Monday's three-week low. The euro slid 0.6% to $1.1116, still within reach of the 13-month peak seen earlier this week. Investors await the release of euro zone August inflation data later in the week, which could provide clues about the European Central Bank's monetary policy path. Sterling fell 0.6% to $1.3186, after hitting its highest since March 2022 on Tuesday as traders bet the Bank of England will go slower on monetary policy easing than the Fed. The Australian dollar rose to a nearly eight-month high against the U.S. currency after data showed domestic inflation slowed to a four-month low in July, although the general progress on tempering price gains disappointed. The Aussie was last down 0.2% at US$0.6780. In cryptocurrencies, bitcoin sank 4.1% to $59,302 , part of a broader retreat in digital currency prices, as the initial boost from Powell's strong signal on rate cuts faded. Sign up here. https://www.reuters.com/markets/currencies/currencies-hold-tight-ranges-market-awaits-more-us-rate-cues-2024-08-28/

2024-08-28 04:42

BANGKOK, Aug 28 (Reuters) - Thailand's monetary policy committee makes decisions based on the economic outlook when reviewing rates and so would adjust them if the current assessment changed, the head of the central bank told a business forum on Wednesday. Bank of Thailand Governor Sethaput Suthiwartnarueput noted the policy interest rate of 2.5% was among the lowest in the world, and said structural factors had held back the country's economic growth. The BOT expects Southeast Asia's second-largest economy to grow 2.6% this year and 3% in 2025, noting the recovery was uneven. "It's not a great number," he told the forum. "We're not happy with a long term growth rate at that reduced level ... and not enough to lead to an increase in living standards and welfare that is necessary." The central bank last week held interest rates steady for a fifth straight meeting, despite persistent calls from the government for a rate cut. The next rate review is on Oct. 16. The BOT was ready to adjust rates if the outlook changed, Sethaput said, adding there needed to be 'policy optionality' with buffers to preserve resilience in the face of uncertainty and shocks. There was growth in tourism, but other sectors such as manufacturing had been growing slower, he said, attributing the divergence to structural issues, including demographic changes. The central bank also saw signs of worsening credit quality, and Sethaput said there could be a credit contraction in the small and medium-sized enterprise (SME) segment. "We are keeping a close eye on the credit front," he said. Lowering the household debt-to-GDP ratio from above 90% down to a preferred level of 80% would take time, he said. Sign up here. https://www.reuters.com/markets/asia/thai-central-bank-says-growth-outlook-below-potential-2024-08-28/