2024-08-27 10:19

Aug 27 (Reuters) - UBS Global Wealth Management has raised the odds of a U.S. recession to 25% from 20%, citing weakness stemming from softer jobs growth and the July unemployment data which stoked fears of a downturn. The brokerage in a note on Monday maintained its base case of a soft landing for the economy with consumer spending broadly determining the trajectory of growth; however, it called the outlook "cloudy". Earlier this month, J.P. Morgan raised the odds of U.S. recession by the year-end to 35% citing easing labor market pressures, while Goldman Sachs lowered its probability of a recession in the next 12 months to 20%. Last week the U.S. Department of Labor had lowered its estimate for total payroll employment by 818,000 for the period from April 2023 to March 2024, meaning U.S. employers had added far fewer jobs than originally reported in the year through March. This came on the heels of the U.S. unemployment rate jumping to a near three-year high of 4.3% in July amid a significant slowdown in hiring, raising fears the labor market was deteriorating and potentially making the economy vulnerable to a recession. Expectations for a rate cut of up to 50 basis points in the September meeting of the U.S. Federal Reserve have risen, with Chair Jerome Powell signaling in his speech at Jackson Hole last Friday that the 'time has come' to reduce rates. With the excess savings built up during the pandemic being used up, "continued income growth will be critical to keep spending rising, since a steady savings rate is probably the best we can hope for," said Brian Rose, senior U.S. economist at UBS. Sign up here. https://www.reuters.com/markets/us/ubs-wealth-management-raises-odds-us-recession-25-20-2024-08-27/

2024-08-27 10:09

A look at the day ahead in U.S. and global markets from Mike Dolan Wall Street stocks (.SPX) , opens new tab are back just shy of new record highs, lapping up the likely start of Federal Reserve easing next month but wary of Wednesday's quarterly update from artificial intelligence behemoth Nvidia (NVDA.O) , opens new tab. There were three main reasons cited for this month's early "head fake" for stocks - a return of jobs-related recession worries, a puncturing of the short-yen, short-volatility trade and creeping doubts about AI overspend and its ultimate promise. Recession fears have been doused to some extent by data seen since the July employment report and Fed chair Jerome Powell's clear indication on Friday that "the time has come" to ease back on policy rates. And the speculative yen 'carry trade' and excessively low volatility gauges (.VIX) , opens new tab have returned close to more normal levels. But earnings from $3.1 trillion megacap Nvidia, the second most valuable U.S. stock, are now awaited with bated breath to see if the AI theme is still on track. Nvidia, whose stock is up more than 150% this year, is expected to report more than a doubling of its second-quarter revenue but the bar is now so high to impress the market, there's some trepidation about guidance ahead. The stock is valued at about 37 times its forward earnings, compared with an average of around 29 for the top six tech companies on the benchmark index that includes the chipmaker. Results from Dell (DELL.N) , opens new tab and Salesforce (CRM.N) , opens new tab this week also add to the tech picture. Nvidia shares fell back about 2% on Monday in advance of its report, knocking back the main indexes (.SPX) , opens new tab, (.IXIC) , opens new tab in the process and stopping the S&P500 less than 0.3% from new records. But it was up marginally ahead of Tuesday's bell - as were index futures , . Facing a heavy week of Treasury debt sales, where some $183 billion of 2-, 5- and 7-year notes go under the hammer, Treasury yields have backed up slightly despite the Fed optimism. First out of the traps on Tuesday is $69 billion of two-year paper. Irking Treasury yields additionally has been a pop higher in world crude oil prices this week amid renewed tensions in the Middle East and outages in Libya, although U.S. crude gains have been modest and remain negative year-on-year. The latest test of U.S. economic resilience comes with a readout later on consumer confidence for August, but Friday's release of the Fed-favored PCE inflation gauge probably marks the biggest macro data release of the week. The dollar index (.DXY) , opens new tab recovered marginally from Monday's lowest level in more than year - in line with firmer Treasury yields. But 100 basis points of Fed easing remains in futures prices to the end of the year - implying that markets think at least one of the Fed's three remaining 2024 meetings will deliver a 50bp cut. San Francisco Federal Reserve President Mary Daly on Monday said "the time is upon us" to cut interest rates, likely starting with a quarter-percentage point reduction in borrowing costs. Asked if there is anything that could derail a rate cut at the U.S. central bank's Sept. 17-18 policy meeting, Daly told Bloomberg TV that it "would be hard to imagine at this point." The yen slipped back too, however, helping Japan's Nikkei (.N225) , opens new tab higher. Chinese mainland stock markets fell back, with news of 100% Canadian tariffs weighing on shares of electric vehicle and steel makers and downbeat comments about domestic demand dragging on e-commerce shares. It was a more mixed picture in Hong Kong, with financials steadying the Hang Seng (.HSI) , opens new tab. European stocks (.STOXXE) , opens new tab were higher, led by miners. BHP Group (BHP.AX) , opens new tab said it will focus on growing its copper business through existing and incoming projects after its failed attempt to buy Anglo American (AAL.L) , opens new tab as it reported a better-than-expected 2% rise in annual underlying profit. Key developments that should provide more direction to U.S. markets later on Tuesday: * US August consumer confidence, June home prices, Richmond Fed Aug business surveys, Dallas Fed's Aug service sector survey * US Treasury sells $69 billion of 2-year notes Sign up here. https://www.reuters.com/markets/us/global-markets-view-usa-2024-08-27/

2024-08-27 07:59

OSLO, Aug 27 (Reuters) - Norwegian battery startup Morrow, which opened its first factory earlier this month, has reached a preliminary deal to deliver power storage systems to Ukraine, the company said in a statement on Tuesday. Morrow said it had signed a memorandum of understanding with Ukraine's State Agency on Energy Efficiency and Energy Saving (SAEE), adding that a final deal may involve support from sources including external financial donors. Ukraine says Russia is attacking electricity infrastructure in the ongoing war, damaging the power supply and leading to frequent blackouts. That means Kyiv is keen to establish energy storage facilities in every school and hospital as soon as possible, Morrow quoted SAEE as saying. Morrow, which aims to produce its first commercial units by the end of this year, said it plans to deliver lithium iron phosphate (LFP) battery cells to help boost the resilience of the Ukrainian energy system. "We share a great sense of urgency and will do our part in being ready to sign a firm offtake agreement and start deliveries of battery cells from the first quarter 2025," Morrow CEO Lars Christian Bacher said in the statement. "Ukraine has a large estimated need for batteries over the next years to help stabilise their energy system," the company added. Norway has said it is keen to develop a battery making industry, benefiting from access to the country's renewable electricity and a proximity to European customers. Sign up here. https://www.reuters.com/business/energy/norways-morrow-agrees-supply-ukraine-with-battery-storage-systems-2024-08-27/

2024-08-27 07:46

FTSE 100 up 0.4%, FTSE 250 flat Aug 27 (Reuters) - UK's benchmark FTSE 100 stock index jumped on Tuesday led by miners and energy shares, as copper prices touched a six-week peak, while Bunzl hit a record high after the business supplies distributor forecast a strong annual profit. The bluechip FTSE 100 index (.FTSE) , opens new tab was up 0.4% by 0715 GMT, after hitting a one-week high, while the domestically-focused mid-cap FTSE 250 (.FTMC) , opens new tab was largely unchanged. The UK equity market was closed on Monday for a bank holiday. Both indexes posted a second straight weekly rise on Friday, with markets globally cheering U.S. Federal Reserve Chair Jerome Powell's nod to initiate interest rate cuts at the Jackson Hole economic symposium. While high copper prices boosted metal miners (.FTNMX551020) , opens new tab, energy stocks (.FTNMX601010) , opens new tab climbed even though oil prices paused after sharp gains recently. Bunzl (BNZL.L) , opens new tab jumped 11% to the top of the FTSE 100, after raising its annual adjusted operating profit forecast, helping the general industrials index (.FTNMX502030) , opens new tab touch a record high. On the flip side, Associated British Foods (ABF.L) , opens new tab was the worst-hit stock on the benchmark index, down 3%, after Deutsche Bank downgraded the stock to "Sell" from "Hold". However, investors also kept an eye out for tensions in the Middle East, while awaiting a crucial inflation report from the United States, with a dry events calendar at home. Meanwhile, data showed British shop prices fell in annual terms this month for the first time since October 2021. This comes on the heels of the Bank of England cutting interest rates from 16-year highs earlier this month, with investors expecting at least one more quarter-point cut by year-end, as per LSEG data. Sign up here. https://www.reuters.com/world/uk/miners-energy-shares-drive-ftse-100-higher-bunzl-hits-record-high-2024-08-27/

2024-08-27 07:36

Aug 27 (Reuters) - European shares inched higher on Tuesday following a subdued start to the week, supported by heavyweight miners, although investors remained cautious ahead of key economic data this week. The pan-European STOXX 600 index (.STOXX) , opens new tab was up 0.2% at 519.33 points, as of 0715 GMT. Investors await key economic data from Germany and Spain this week, including European Union's inflation print on Friday, for signals on the policy path for the European Central Bank. Germany's benchmark DAX (.GDAXI) , opens new tab was trading flat after detailed GDP data released earlier in the day showed the economy shrank by 0.1% in the second quarter of 2024. Sweden's benchmark index (.OMXS30) , opens new tab also held its ground at 2,566.69 points after data signalled producer price index was down 1.4% in July. The basic resources sub-index (.SXPP) , opens new tab was the top sectoral gainer in the region with an over 1% jump, as copper prices climbed to their highest levels in nearly six weeks due to optimism over a potential U.S. interest rate cut. Among individual stocks, Bunzl (BNZL.L) , opens new tab surged 11.6% after the British business supplies distributor raised its annual adjusted operating profit forecast. Shares of Daimler Truck Holding AG (DTGGe.DE) , opens new tab lost 2% after Goldman Sachs downgraded the rating on the stock to "neutral" from "buy". Flughafen Zuerich (FHZN.S) , opens new tab slumped 4.1% after the Swiss airport operator missed first-half margin estimates. Associated British Foods (ABF.L) , opens new tab was down 2.6% after Deutsche Bank cuts its rating on the stock to "sell" from "buy". Sign up here. https://www.reuters.com/markets/europe/european-shares-edge-higher-miners-support-2024-08-27/

2024-08-27 07:13

IAEA's Grossi to visit Kursk nuclear plant Kursk plant is just 40 km (25 miles) from fighting Russia says Ukraine has attacked the site Ukraine has yet to comment on the accusations KURSK, Russia, Aug 27 (Reuters) - U.N. nuclear agency chief Rafael Grossi will visit on Tuesday Russia's Kursk nuclear power plant, which Moscow says has been repeatedly attacked by Ukrainian forces that are just 40 km (25 miles) away after carving out a slice of Russian territory. The safety of nuclear power plants has repeatedly been endangered over the course of the Ukraine war, which began in February 2022 when Russia sent thousands of troops over the border into Ukraine. Moscow and Kyiv have repeatedly blamed each other for drone and artillery attacks on the Russian-controlled Zaporizhzhia nuclear power plant in Ukraine, though the Aug. 6 incursion by Ukrainian forces into Russia has put the spotlight on the Kursk plant - a major Soviet-era nuclear power station. President Vladimir Putin accused Ukraine on Thursday of trying to attack the Kursk plant, which has four Soviet graphite-moderated RBMK-1000 reactors - the same design as those at the Chernobyl nuclear plant which in 1986 became the scene of the world's worst-ever civilian nuclear disaster. Ukraine has yet to respond to the accusations that it attacked the facility. Grossi, who has repeatedly warned of a nuclear disaster if nuclear plants continue to be attacked, said he would lead an International Atomic Energy Agency (IAEA) mission to the Kursk plant "given the serious situation". He said the only way the IAEA could assess the plant's security and validate the information it was receiving was to visit the site, which is owned by Russia's vast nuclear state corporation, Rosatom. "The safety and security of nuclear facilities must, under no circumstances, be endangered," Grossi said. "The safety and security of all nuclear power plants is of central and fundamental concern to the IAEA." FOREIGN ATTACK Thousands of Ukrainian soldiers punched through the Russian border on Aug. 6 and then carved out a portion of Russia's western Kursk region, the biggest foreign attack on sovereign Russian territory since World War Two. Russia says Ukraine sent in thousands of troops along with sabotage units, swarms of drones, heavy artillery, dozens of tanks and heavy Western weaponry. Moscow says it will eject the Ukrainian soldiers. Just 40 km (25 miles) away from the fighting, the Kursk nuclear power station sits next to the town of Kurchatov, named after legendary Russian physicist Igor Kurchatov. Of the Kursk nuclear power station's four Soviet-era reactors, two are shut down, but two - Number 3 and Number 4 - are operational. Reactor Number 4 was disconnected from the grid on Aug. 25 for 59 days of cooling repairs. Construction of Kursk-2, essentially new reactors of the VVER-510 type, began in 2018. The two reactors are not operational yet. The IAEA said on Aug. 22 that it had been informed by Russia that the remains of a drone were found about 100 metres (330 ft)from the Kursk plant's spent fuel nuclear storage facility. Radiation levels in the area are normal, according to Russian monitoring stations. Sign up here. https://www.reuters.com/world/europe/un-nuclear-chief-visit-russian-atomic-plant-near-front-line-2024-08-27/