2024-09-23 22:35

Survey: US business activity steady in September Intel gains on report of Apollo's investment offer GM slips after Bernstein downgrades stock Indexes up: Dow 0.15%; S&P 500 0.28%; Nasdaq 0.14% Sept 23 (Reuters) - U.S. stocks closed modestly higher on Monday as investors assessed whether a trend will develop in the week following the Federal Reserve’s rate cut. The gains came amid comments from Fed policymakers and steady factory activity data, building on last week's sharp market rally after the central bank's decision to lower interest rates. The Fed's pivotal move last week pushed major indexes to monthly gains, defying the historical trend of September as a weak month for equities. Comments on Monday from three reserve bank presidents were the main focus as investors searched for clues on why the central bank kicked off its easing cycle with an outsized 50 basis-point cut. Fed officials including Raphael Bostic, Neel Kashkari and Austan Goolsbee supported the central bank's last rate cut and voiced support for more cuts in the rest of the year. Trader bets, as per the CME Group's FedWatch tool, initially favored a larger Fed move at its upcoming November meeting, after Governor Christopher Waller on Friday flagged that upcoming inflation data could undershoot the Fed's 2% target. However, the bets have swayed since then and now appear to be a coin-toss, with markets expecting a total reduction of 74 basis points by year-end, according to LSEG data. On the data front, U.S. business activity remained steady in September, while average prices for goods and services increased at the fastest pace in six months, potentially signalling a rise in inflation in the months ahead. “I think investors are still just sort of taking a wait-and-see attitude, if indeed a soft landing is the most likely outcome.” said Sam Stovall, chief investment strategist of CFRA Research in New York. The Dow Jones Industrial Average (.DJI) , opens new tab rose 61.29 points, or 0.15%, to 42,124.65, the S&P 500 (.SPX) , opens new tab gained 16.02 points, or 0.28%, to 5,718.57 and the Nasdaq Composite (.IXIC) , opens new tab gained 25.95 points, or 0.14%, to 17,974.27. Eight of the 11 S&P 500 sectors were higher. Energy stocks (.SPLRCD) , opens new tab led gains with a 1.31% rise, while healthcare stocks (.SPXHC) , opens new tab declined 0.25%. Among rate-sensitive growth stocks, Tesla (TSLA.O) , opens new tab jumped 4.65%, while Meta Platforms (META.O) , opens new tab rose 0.6% after Citigroup lifted its price target on the stock. The Russell 2000 index (.RUT) , opens new tab, tracking small caps, was off 0.25%. All eyes are on Friday's personal consumption expenditures figure for August - the Fed's preferred inflation gauge. Analysts say this release will be the week's most significant catalyst. Among top movers, Intel (INTC.O) , opens new tab rose 3.05% after a media report said Apollo (APO.N) , opens new tab offered to make an investment of as much as $5 billion in the chipmaker. General Motors (GM.N) , opens new tab slipped 1.72% after Bernstein downgraded the carmaker's stock to "market perform" from "outperform." Advancing issues outnumbered decliners by a 1.48-to-1 ratio on the NYSE. There were 505 new highs and 36 new lows on the NYSE. The S&P 500 posted 62 new 52-week highs and one new low while the Nasdaq Composite recorded 80 new highs and 123 new lows. Sign up here. https://www.reuters.com/markets/us/futures-steady-with-focus-fed-speakers-economic-data-2024-09-23/

2024-09-23 22:30

Sept 23 (Reuters) - Microsoft (MSFT.O) , opens new tab is estimated to pay Constellation Energy (CEG.O) , opens new tab a premium as part of a long-term power purchase agreement (PPA) related to the Three Mile Island nuclear plant in Pennsylvania, Jefferies analysts said on Monday. Rising demand for electricity from data centers to power AI technology has created a need for clean and sustainable sources of energy such as nuclear power. Microsoft signed a deal with Constellation to help it restart a unit of its Three Mile Island nuclear plant, the companies said on Friday, sending the utility firm's shares up 22%. The unit Constellation hopes to restart at the Three Mile Island power facility was shut down in 2019 due to operational issue. No U.S. nuclear power plant has been reopened after shutting. A separate unit of the plant was shut down in 1979 after experiencing a partial meltdown, in one of the biggest commercial nuclear accidents in U.S. history. Jefferies estimated that Microsoft might pay Constellation about $110-$115 per megawatt hour (MWh) as part of the 20-year-long fixed price PPA. The brokerage's analysts said the estimated cost represents a significant premium to market expectations, which are in the low $100 per MWh for a collocated deal. "Customers are willing to pay material premiums for virtual nuclear deals. This considerably increases the amount of volume for sale at robust levels," Jefferies analysts said in a note. Sign up here. https://www.reuters.com/markets/deals/microsoft-may-pay-constellation-premium-three-mile-island-power-agreement-2024-09-23/

2024-09-23 22:11

KYIV, Sept 24 (Reuters) - Ukraine's President Volodymyr Zelenskiy said early on Tuesday that he had held talks with Japanese Prime Minister Fumio Kishida on Japan's energy aid to Kyiv. "Restoring our energy supply after Russian shelling and preparing for winter are tasks we are actively working on now," Zelenskiy said in a post on the Telegram messaging app. "Together with Prime Minister Fumio Kishida, we discussed the situation in the energy sector." Both Zelenskiy and Kishida are in the United States to attend sessions at the U.N. General Assembly and where the Ukrainian leader is also set to present his "victory plan" to the leadership of the United States. Since Russia invaded Ukraine in 2022, Japan has been one of several nations sending support, including $4.5 billion this year, according to the Japanese foreign ministry website. Japan has provided Kyiv with equipment for restoration work and increasing the capacity of the Ukrainian power system to get through winter amidst Russia's continued strikes on energy infrastructure. Ukraine's electricity supply shortfall could reach about a third of expected peak demand amid the attacks and the expiry of a gas supply contract at the end of this year, the International Energy Agency said in a report last week. Sign up here. https://www.reuters.com/world/zelenskiy-holds-talks-with-pm-kishida-japans-energy-aid-ukraine-2024-09-23/

2024-09-23 21:59

Sept 24 (Reuters) - A look at the day ahead in Asian markets. A mood of caution may hang over Asian stocks on Tuesday, following a fairly directionless U.S. session the day before and as investors brace for an interest rate decision in Australia and remarks from Bank of Japan Governor Kazuo Ueda. That said, the slender gains eked out on Wall Street kept the S&P 500 within 0.3% of last week's record high, and pushed the Dow to a new peak of 42,190 points. The feel-good factor from last week's Fed move has not faded just yet. Indeed, the bullish case for risky assets may have gotten a boost on Monday from Chicago Fed president Austan Goolsbee, who said the Fed's policy rate is still "hundreds" of basis points above neutral and that there are "a lot of cuts" to come over the next year. This follows surprisingly dovish comments on Friday from Fed Governor Christopher Waller, who said inflation is softening much faster than he previously thought and August PCE inflation could be very low. But there's often a fine line between deep rate cuts encouraging investors to load up on risk, and concerns over why policy is being loosened so much so quickly. This is why all economic activity and labor market data between now and the Fed's next meeting will be scrutinized so closely. The Reserve Bank of Australia is the next major central bank to deliver its latest policy decision and guidance. With inflation running above the central bank's 2%-3% target range and the job market looking strong, there is virtually no chance of a rate cut yet. All 43 economists polled by Reuters expect the RBA to keep its cash rate on hold at 4.35% on Tuesday, and 40 of them say there will be no move on rates this year. Aussie swaps markets are attaching a roughly two-in-three chance of a 25 basis point rate cut by the end of this year, and imply a full 100 bps of easing next year - significantly less than all G10 central banks except the Bank of Japan and Swiss National Bank. The BOJ is the only major central bank raising rates, and investors will be looking to a speech from Governor Kazuo Ueda on Tuesday for clues on the pace and extent of tightening. The BOJ left rates unchanged on Friday and signaled it is in no rush to raise them again. The People's Bank of China, meanwhile, injected 14-day liquidity into the financial system on Monday for the first time in months, and at a lower rate than before. But investors will need a lot of convincing that Beijing's stimulus efforts will be enough to fight off deflation and revive growth. Here are key developments that could provide more direction to Asian markets on Tuesday: - Australia interest rate decision - BOJ Governor Kazuo Ueda speaks - Japan flash PMIs (September) Sign up here. https://www.reuters.com/markets/asia/global-markets-view-asia-graphic-pix-2024-09-23/

2024-09-23 21:55

Storage levels in Alberta near full capacity due to weak demand Western Canadian storage levels 30% higher than three-year average Major producers shut in or delay completing natural gas wells LNG Canada project expected to boost demand in 2025 Sept 23 (Reuters) - Canadian natural gas prices slumped to their lowest level in more than two years on Monday and are expected to remain under pressure for weeks, as storage levels in Alberta reach full capacity due to weak demand across North America. Next-day gas prices at the AECO hub in Alberta fell to 5 Canadian cents per million British thermal units (mmBtu), their lowest level since August 2022, according to data from financial firm LSEG. The AECO benchmark has been trending lower throughout 2024 following a mild winter that left Canada, the world's sixth-largest natural gas producer, with a significant surplus of supply. Now summer air conditioning demand is winding down and storage levels in Alberta are very close to being full, said RBN Energy analyst Martin King, who warned prices would struggle to meaningfully recover until colder weather starts to bite in late October. "It seems pretty clear we are going to stay weak until we get a demand pickup because we are running out of places to put the gas," King said. Alberta has 504 billion cubic feet (bcf) of natural gas storage, according to RBN, which is essentially full. British Columbia and Saskatchewan have a further 80 bcf of capacity, of which 36 bcf is still available. Overall western Canadian storage levels are 30% higher than the three-year average for this time of year. Months of subdued AECO prices have already prompted a number of major producers, including ARC Resources (ARX.TO) , opens new tab and Canadian Natural Resources (CNQ.TO) , opens new tab, to shut in or delay completing natural gas wells. Field receipts showing how much gas producers are putting onto pipelines systems, a proxy for wellhead production, have come off in the last three weeks, suggesting even more companies are responding to low prices by shutting in production, RBN's King said. He estimated 700 million to 800 million cubic feet a day of gas is currently offline, taking production to around 17.3 billion cubic feet a day (bcf/d) this month. Canada's production year-to-date has averaged 18.1 bcf/d. Many producers and analysts are looking ahead to the start-up of the Shell-led (SHEL.L) , opens new tab LNG Canada project in northern British Columbia next year as a major new source of 2.1 bcf/d of demand that will help the AECO market recover. "We are expecting natural gas prices to be pulled higher over the winter and early 2025 with growing demand from LNG export capacity increasing," Eight Capital analysts said in a research note. Sign up here. https://www.reuters.com/business/energy/canadian-natural-gas-prices-fall-two-year-low-storage-fills-2024-09-23/

2024-09-23 21:27

Sept 23 (Reuters) - The U.S. Federal Trade Commission is expected to greenlight U.S. oil producer Chevron's (CVX.N) , opens new tab purchase of Hess (HES.N) , opens new tab as soon as this week, two people familiar with the matter said, leaving Exxon Mobil's (XOM.N) , opens new tab challenge to the $53 billion deal as its final hurdle. The proposed merger was first announced last October, and the FTC sent a second information request to Chevron two months later. Hess shares were up as much as 3% in after-hours trading on Monday following the news. Uncertainty over the deal's closing has knocked Chevron shares down 1% this year compared to a 6.5% increase in energy share fund XLE (XLE.P) , opens new tab. Exxon and CNOOC Ltd (0883.HK) , opens new tab, Hess's partners in a Guyana joint venture, are challenging the deal by claiming a right of first refusal to any sale of Hess's Guyana assets, the prize in the proposed merger. A three-judge arbitration panel is due to consider the case in May 2025. Chevron and Hess say a decision is expected by August, while Exxon expects it by September 2025. The proposed all-stock acquisition is one of the largest in a consolidating U.S. oil and gas industry where several multi-billion dollar deals have been disclosed. Chevron's announcement of the Hess deal followed Exxon's $60 billion purchase of U.S. shale giant Pioneer Natural Resources, which closed in May. Two other mergers, Occidental Petroleum's (OXY.N) , opens new tab deal for CrownRock and Diamondback Energy's (FANG.O) , opens new tab bid for Endeavor Energy Resources, have closed even though they came after the Chevron-Hess combination. The FTC required Exxon to withdraw its offer of a board seat to Pioneer Natural Resources CEO Scott Sheffield as a condition for its go-ahead. The FTC alleged he colluded with OPEC to reduce U.S. oil and gas output to potentially raise the price of oil. Sheffield denied the allegations and has asked the FTC to vacate its ban on his taking an Exxon board seat. A spokesperson for the FTC declined to comment on Monday. EXXON ARBITRATION The dispute over terms of the contract governing the Exxon-CNOOC-Hess partnership stalls any closing to the second half of 2025. The Guyana consortium controls one of the world's fastest growing and lucrative oil provinces with more than 11.6 billion barrels of recoverable oil and gas discoveries since 2015. Exxon operates all production in Guyana with a 45% stake in an offshore oil production consortium with Hess and China's CNOOC, as minority partners. Combined earnings for the trio from Guyana last year were $6.33 billion on $11.25 billion in revenue. The information was first reported by CTFN, a data and news provider to financial professionals. Sign up here. https://www.reuters.com/markets/deals/ftc-set-greenlight-chevrons-53-billion-buy-oil-rival-hess-sources-say-2024-09-23/