2024-08-20 20:44

Canadian National Railway and Canadian Pacific Kansas City plan to halt operations on Thursday Trucking sector sees increased demand it struggles to meet 85% of U.S.-Canada cross-border road freight handled by Canadian carriers Higher trucking demand leads to rising costs and longer lead times CN and CPKC begin phased network shutdowns TORONTO, Aug 20 (Reuters) - As Canada braced for a freight rail stoppage that could hit industries ranging from autos to agriculture, the trucking sector said it faced higher demand it could not meet. Unless labor agreements are reached, Canadian National Railway (CNR.TO) , opens new tab and Canadian Pacific Kansas City (CP.TO) , opens new tab - which hold a duopoly - plan to indefinitely halt operations on Thursday at the same time, marking a first. Canada relies heavily on railways to transport goods and commodities, but trains are already winding down in anticipation of a strike or lockout. Daman Grewal, a senior operations manager with British Columbia-based Centurion Trucking, would normally expect 20 or 30 online postings from shippers seeking trips east across Canada on an August Monday. On Monday morning, he saw more than 500. "Last week is when a lot of the panic started to set in," said Grewal, noting trips for which he charged C$7,000 ($5,139) a few days ago now cost up to C$9,000. "Similar to COVID, you see the scarcity in supply chain." Grewal said Centurion could increase capacity 10% to 20%, largely by reducing driver downtime. "We would just have to turn the drivers around a little bit quicker," he said. Industry officials said some softening in the economy has left room to increase capacity but not enough to make up for idled railways. Some rail shippers have been trying to book additional truck capacity since February ahead of a disruption, said Alberta Motor Transport Association president Robert Harper. "The industry can help out in the short term in reallocating assets, but in the long term you simply cannot replace long-haul rail distribution. Because in some cases, the industry doesn't have the equipment nor the capacity," Harper said. NO PLAN B U.S. freight forwarder C.H. Robinson (CHRW.O) , opens new tab estimates 85% of U.S.-Canada cross-border road freight in either direction is handled by Canadian trucking carriers. "Anytime you have an event that causes a surge in trucking demand and sudden tightening of capacity, costs in the spot market can increase dramatically. In the past, we've seen rates in Canada double overnight," said C.H. Robinson's vice president for Canada Scott Shannon, adding this will result in not just higher costs, but also longer lead times. CN and CPKC have begun phased shutdowns of their networks ahead of the looming stoppage. The severity of the disruption, should it occur, will be a factor of how long it lasts, said Joseph Towers, a senior rail analyst at FTR Transportation Intelligence. Canada's federal government may have no choice but to step in to end a stoppage that could cripple industries, said Western University supply chain expert Fraser Johnson. "There is no Plan B for any of these industries because it's not practical to substitute trucks for established supply chains that use rail. ... You can't snap your fingers and increase your capacity in terms of trucking." ($1 = 1.3620 Canadian dollars) Sign up here. https://www.reuters.com/business/autos-transportation/canada-braces-rail-stoppage-truckers-scramble-meet-demand-2024-08-20/

2024-08-20 20:34

Aug 20 (Reuters) - A U.S. judge at the urging of environmental groups has thrown out an assessment by a federal agency governing how endangered and threatened marine species should be protected from oil and gas drilling in the Gulf of Mexico. U.S. District Judge Deborah Boardman in Greenbelt, Maryland, on Monday ruled , opens new tab the U.S. National Marine Fisheries Services' so-called "biological opinion" was flawed and did not adequately address risks species face from oil spills and vessel strikes. The assessment was issued in 2020 during Republican former President Donald Trump's administration and was legally necessary for oil and gas exploration and drilling to be conducted. The judge, appointed by Democratic President Joe Biden, said the assessment violated the Endangered Species Act. She faulted it for assuming an oil spill like the catastrophic Deepwater Horizon one in 2010 would not occur. Boardman gave the agency until Dec. 20 to either complete a new opinion or "plan for the changes ahead," citing the risk that her decision if implemented immediately would "disrupt oil and gas activity in the Gulf without necessarily mitigating the dangers to listed species." The decision drew praise from environmental groups including the Sierra Club and the Center for Biological Diversity, who in a lawsuit filed in 2020 argued more safeguards were needed for imperiled whales, sea turtles, and other species. "The court's ruling affirms that the government cannot continue to turn a blind eye to the widespread, persistent harms that offshore oil and gas development inflicts on wildlife," Chris Eaton, a lawyer for the plaintiffs at Earthjustice, said in a statement. The fisheries service did not respond to a request for comment. Three oil industry trade groups, American Petroleum Institute, the National Ocean Industries Association and the EnerGeo Alliance, had intervened in the lawsuit to defend the opinion alongside oil major Chevron (CVX.N) , opens new tab. The trade groups in a joint statement warned of "disruptive consequences" to the U.S. economy if a new biological opinion was not timely developed and said its issuance should be of the "highest priority." Biden's administration last year had sought to scale back an oil and gas auction in the Gulf of Mexico by 6 million acres to reduce conflicts with the endangered Rice's whale habitat. But the oil and gas industry and the state of Louisiana successfully sued to expand the auction. Sign up here. https://www.reuters.com/legal/us-must-do-more-protect-species-gulf-mexico-drilling-judge-2024-08-20/

2024-08-20 19:26

ACCRA, Aug 20 (Reuters) - Ghana's cocoa regulator Cocobod will not raise a syndicated loan for its 2024/25 cocoa season for the first time in over three decades, Chief Executive Joseph Boahen Aidoo said on Tuesday. He added that the season would open on Sept. 1, earlier than usual, with a reduced target of 650,000 tonnes. "We are not taking funds from cocoa traders," Aidoo told reporters at a press conference. "The money will come locally. We are going to be self-financing." Ghana has financed bean purchases from farmers with an annual syndicated loan since the 1992/93 season. Cocobod paid a record 8% interest on its loan last year. Aidoo said self-financing would save the regulator $150 million in interest to lenders. "Worse case (scenario), we will do a cocktail of self-financing and domestic financing," he said. Aidoo attributed the 2024/25 target, reduced by around 20% from an earlier prediction of 810,000 tonnes, to lack of rain. Ghana, the world's second cocoa producer behind Ivory Coast, witnessed one of its poorest harvests in a decade in the 2023/2024 season, attributed to harsh weather conditions resulting from El Nino, rampant smuggling and swollen shoot disease. The opening of the cocoa season, when farmers are authorised to start selling their cocoa beans at a price set by the regulator, is usually in October. Last year, the government brought forward the start of the new season after increased smuggling of beans to Ivory Coast and Togo contributed to a lower than expected total output. Ghanaian cocoa farmers said they expect a boost in the 2024/2025 season thanks to improved weather and some farms rehabilitated after diseases and illegal gold mining. Sign up here. https://www.reuters.com/markets/commodities/ghana-cocoa-regulator-will-not-raise-syndicated-loan-202425-season-ceo-says-2024-08-20/

2024-08-20 18:57

Aug 20 (Reuters) - Energix Renewables said on Tuesday it has signed a long term agreement with Alphabet's Google (GOOGL.O) , opens new tab to supply electricity and renewable energy credits generated from its solar projects to the tech giant. To power their rapidly expanding AI data centers, major technology firms like Google are increasingly negotiating electricity supply agreements with energy providers. Energix will initially supply 1.5 gigawatt peak of solar project development until 2030, with an option to further expand the partnership. The tech giant will also offer tax equity, enabling the transfer of renewable energy credits under President Biden's Inflation Reduction Act, to Energix. Under the act, corporate entities can acquire these credits, supporting the development of clean energy storage projects across the United States. Morgan Stanley acted as the sole financial advisor to Energix for the agreement. Sign up here. https://www.reuters.com/sustainability/energix-signs-long-term-solar-power-deal-with-google-2024-08-20/

2024-08-20 18:22

Aug 20 (Reuters) - The S&P 500 (.SPX) , opens new tab will trade near current record levels at year-end, according to a Reuters poll of market strategists that suggests the AI rally is losing steam as investors wait for a widely-expected U.S. central bank interest rate cut next month. The benchmark S&P 500 (.SPX) , opens new tab will end 2024 at 5,600 points, according to the median forecast of 41 equity strategists, analysts, brokers and portfolio managers collected Aug. 8-20. The index closed at 5,608 on Monday. In a May poll, market strategists expected the S&P 500 to trade nearly unchanged for the rest of the year but the index has climbed over 5% since then. Overall, the S&P 500 has surged around 17% so far in 2024, backed by sharp gains in Nvidia (NVDA.O) , opens new tab, Microsoft (MSFT.O) , opens new tab and other Wall Street heavyweights as they race to dominate emerging AI technology. The U.S. stock market has turned volatile in recent weeks, partly on recession fears, but also related to the unwinding of large leveraged positions in markets as a result of a sudden, sharp rise in the Japanese yen, used as a funding currency. Fading recession concerns helped boost stocks last week, marking their biggest weekly gains since November. Investors have also become nervous about massive spending by Google-parent Alphabet (GOOGL.O) , opens new tab, Microsoft and Meta Platforms (META.O) , opens new tab to build their AI infrastructure. "The AI sugar high is fading and the market is coming to grips with a possible slowdown in GDP," said Synovus Trust portfolio manager Daniel Morgan, warning as well of "little room for error" due to stretched valuations. The S&P 500 dipped 0.2% on Tuesday ahead of an annual central banking conference at Jackson Hole, Wyoming later this week that could offer clues about the trajectory of interest rate cuts. The index is down about 1% from its record high close on July 16. Nvidia's stock has surged 158% in 2024, and analysts expect the chipmaker's quarterly net income to more than double when it reports its results next week, according to LSEG. The S&P 500 will trade at 5,900 points by the end of next year, a 5.2% gain from Monday's close, the survey showed. Stock strategists struggle to accurately predict the market, but their forecasts offer a glimpse of sentiment across Wall Street and Reuters poll medians often correctly predict the direction of trading. A neck-and-neck race between former President Donald Trump and Vice President Kamala Harris means additional uncertainty for investors ahead of the Nov. 5 U.S. presidential election. As well, turmoil in the Middle East and uncertainty over how many interest rate cuts the Fed will deliver make it particularly difficult right now to forecast the stock market, said Chase Investment Counsel President Peter Tuz. Money market traders mostly expect a 25 basis point rate cut at the Fed's September policy meeting, with a total of at least 75 basis points in reductions by year end, according to CME Group's FedWatch , opens new tab. Asked by Reuters, over half of poll respondents said a stock market correction of at least 10% is likely by the end of September. More than half predicted corporate earnings would beat expectations through the end of 2024. While the AI rally has benefited the U.S. stock market's most valuable companies, much of the market has lagged. The median S&P 500 stock has gained around 9% this year, while the S&P 500 consumer discretionary (.SPLRCD) , opens new tab, real estate (.SPLRCR) , opens new tab and materials (.SPLRCM) , opens new tab sector indexes have languished with year-to-date gains of about 5% each. Following this year's rally, the S&P 500 is trading at 21 times expected earnings, compared to a 10-year average of 18, according to LSEG. Goldman Sachs lowered the odds of a U.S. recession in the next 12 months to 20% from 25% following recent upbeat jobless claims and retail sales reports. (Other stories from the Reuters Q3 global stock markets poll package) Sign up here. https://www.reuters.com/markets/us/sp500-end-2024-near-current-level-suggests-ai-rally-fizzling-out-2024-08-20/

2024-08-20 18:05

Loonie touches its strongest since July 11 Canada's annual inflation rate slows to 2.5% Price of U.S. oil decreases 0.6% Bond yields ease across the curve TORONTO, Aug 20 (Reuters) - The Canadian dollar pared earlier gains against the U.S. dollar on Tuesday as oil prices fell and domestic inflation data supported expectations the Bank of Canada would cut interest rates further next month. The loonie was trading nearly unchanged at 1.3630 per U.S. dollar, or 73.37 U.S. cents, after touching its strongest intraday level since July 11 at 1.3606. Canada's annual inflation rate cooled to a 40-month low of 2.5% in July, matching forecasts, and core inflation measures eased. "Today's CPI print should be enough to quell concerns about sticky inflation pressures in Canada after two marginal upside surprises in May and June," Claire Fan, an economist at Royal Bank of Canada, said in a note. "The hurdle for more BoC cuts this year is low and we continue to look for another 25 basis point cut at their next meeting in September." The BoC has twice cut its policy interest rate by 25 basis points since June, lowering it to 4.50%. The swaps market is fully pricing in another cut at the next policy decision on Sept. 4 and expects 76 basis points of additional easing in total by the end of 2024, instead of an estimated 72 basis points before the inflation data. The price of oil, one of Canada's major exports, fell to a near two-week low as Middle East supply concerns eased and economic weakness in China weighed on fuel demand. U.S. crude oil futures were down 0.6% at $73.94 a barrel, while the U.S. dollar (.DXY) , opens new tab lost ground against a basket of major currencies ahead of revisions to U.S. payrolls data on Wednesday. Canadian government bond yields moved lower across the curve, with the 10-year down 5.7 basis points at 3.009%. Sign up here. https://www.reuters.com/markets/currencies/canadian-dollar-steadies-near-6-week-high-inflation-cools-2024-08-20/