2024-09-20 20:36

Fed's Waller flags risk of inflation going too low FedEx falls on quarterly profit drop, forecast trim Nike jumps after appointing new CEO Indexes: Dow up 0.09%, S&P off 0.19%, Nasdaq off 0.36% NEW YORK, Sept 20 (Reuters) - U.S. stocks closed nearly unchanged on Friday, as investors paused buying after a strong rally in the prior session that was fueled by an upsized interest-rate cut by the Federal Reserve, while Nike's gains helped nudge the Dow to a record. After notching their biggest daily percentage gains since mid-August, major averages were subdued for most of the session, but managed to secure weekly gains of at least 1%. Stocks briefly had pared losses after comments from Fed Governor Christopher Waller increased expectations the central bank will cut interest rates by 50 basis points at its November meeting, having just cut by 50 bps on Wednesday. Fellow Governor Michelle Bowman, however, maintained that a smaller Fed cut this week would have been preferred. "The market is still trying to recalibrate because, yes, there were some market participants that may have expected 50 basis points but a lot of people didn't," said Sid Vaidya, U.S. chief wealth strategist at TD Wealth in New York. "You have to be a little bit more selective and measured just because we are expecting growth to slow down a little bit and valuations, especially in large-cap growth, are a bit stretched so you want to be a bit selective." The Dow Jones Industrial Average (.DJI) , opens new tab rose 38.17 points, or 0.09%, to 42,063.36, the S&P 500 (.SPX) , opens new tab lost 11.09 points, or 0.19%, to 5,702.55 and the Nasdaq Composite (.IXIC) , opens new tab lost 65.66 points, or 0.36%, to 17,948.32. For the week, the S&P 500 gained 1.36%, the Nasdaq rose 1.49%, and the Dow climbed 1.62%. Markets are fully pricing in a cut of at least 25 bps in November, with expectations for a cut of 50 bps given a 48.9% chance, according to CME's FedWatch Tool , opens new tab. Utilities (.SPLRCU) , opens new tab surged 2.69% to a record high as the best-performing of the 11 major S&P sectors, led by a 22.29% jump in Constellation Energy (CEG.O) , opens new tab shares after the company signed a data-center deal with Microsoft (MSFT.O) , opens new tab to help resurrect a unit of the Three Mile Island nuclear plant in Pennsylvania. Also supporting the Dow was Intel (INTC.O) , opens new tab, whose shares closed up 3.31% after the Wall Street Journal reported Qualcomm (QCOM.O) , opens new tab had made a takeover approach to the chipmaker. The Fed began its monetary-easing cycle on Wednesday and projected a period of steady economic growth and low unemployment and inflation. FedEx (FDX.N) , opens new tab plunged 15.23% after lowering its full-year revenue forecast, sending the Dow Jones Transport index (.DJT) , opens new tab down 3.53%, its biggest daily drop since late April 2023. Nike (NKE.N) , opens new tab jumped 6.84% after saying former senior executive Elliott Hill will rejoin the company to succeed John Donahoe as CEO. Options and futures linked to stock indexes and individual stocks were set to expire simultaneously on Friday in an event known as "triple witching," and helped lead to the heaviest trading-volume day of the year. Historically, equities have performed well in a rate-cutting environment. However, the outlook appears bleak with the S&P 500's valuations high above its long-term average. Declining issues outnumbered advancers by a 1.66-to-1 ratio on the NYSE and by a 1.87-to-1 ratio on the Nasdaq. The S&P 500 posted 32 new 52-week highs and one new low while the Nasdaq Composite recorded 114 new highs and 105 new lows. Volume on U.S. exchanges was 19.97 billion shares, compared with the 11.48-billion average for the full session over the last 20 trading days. Sign up here. https://www.reuters.com/markets/us/futures-pause-after-wall-streets-rally-fed-policy-pivot-2024-09-20/

2024-09-20 20:21

LIMA, Sept 20 (Reuters) - Peru's central bank expects that the Andean nation's economy will grow 3.1% this year and a further 3.0% in 2025, it said in a report on Friday, maintaining expectations for a rebound after gross domestic product (GDP) contracted by 0.6% last year. Central bank chief Julio Velarde said in a presentation that the 3.1% growth expectation was "probably biased to the upside." The bank raised its fiscal deficit forecasts to 3.3% of GDP this year, from a prior estimate of 2.8%, and to 2.0% next year from a previous forecast of 1.6%, which Velarde attributed to less revenue and more public investment. Peru has this year set a rule not to exceed a deficit of 2.8% of GDP. Velarde pointed notably to government support for struggling state oil firm Petroperu (PETROBC1.LM) , opens new tab, which last week approved a further $1.75 billion in financing after its directors resigned. Financial bailouts to Petroperu should this year be equivalent to 0.66% of GDP, he said. The monetary authority also expects a $21.67 billion trade surplus this year, slightly under the previous estimate but which would nevertheless break a fresh record in spite of lower prices for copper amid lower demand prospects from China. The bank also slightly increased its inflation forecast for this year to 2.3% from an earlier estimate of 2.2%. This however remains firmly within the target range of the central bank, which last week cut its benchmark rate by 25 basis points to 5.25%. The government, meanwhile, has predicted the economy will grow 3.2% this year and 3.1% in 2025. In July, the economy grew nearly 4.5%, the fourth consecutive month of growth, continuing a recovery from adverse climate and anti-government protests that slowed the country's key mining industry last year. The South American country, a major world supplier of copper, is currently battling extensive forest fires that have burned through crop lands and hit some archaeological zones. Sign up here. https://www.reuters.com/world/americas/perus-rebounding-economy-grow-31-this-year-cenbank-forecasts-2024-09-20/

2024-09-20 20:06

OSLO, Sept 20 (Reuters) - Norway's Equinor (EQNR.OL) , opens new tab has scrapped plans to export so-called blue hydrogen to Germany because it is too expensive and there is insufficient demand, a spokesperson for the energy company said on Friday. Equinor and Germany's RWE (RWEG.DE) , opens new tab signed a memorandum of understanding in January 2022 to build a hydrogen supply chain for German power plants to help reduce greenhouse gas emissions. The plans included producing hydrogen from natural gas in combination with carbon capture and storage - known as blue hydrogen - in Norway and exporting it to hydrogen-ready gas power plants in Germany via the world's first offshore hydrogen pipeline. "The hydrogen pipeline hasn't proved to be viable. That also implies that hydrogen production plans are also put aside," Equinor spokesperson Magnus Frantzen Eidsvold told Reuters. "We have decided to discontinue this early-phase project," he added. The pipeline was not RWE's project, but required support from both Norway and Germany, the German company said in emailed comments. Last year, Equinor CEO Anders Opedal said the cost of the total supply chain could run into the "tens of billion euros", while the pipeline alone would cost some 3 billion euros ($3.35 billion). Eidsvold said Equinor also could not continue maturing the projects without firm long-term commitments from European buyers to import hydrogen. "We are not able to make this kind of investments when we don't have long-term agreements and the markets in place," Eidsvold said. Plans to develop hydrogen-ready gas power plants in Germany with RWE will go ahead but hydrogen for them will be procured on the continent, not exported from Norway, Eidsvold said. The German government has been in intensive talks on the issue with Norway, a German economy ministry official told Reuters on Saturday. The official said the new plan now includes converting Norwegian gas into blue hydrogen in the Netherlands and shipping the captured carbon dioxide back to Norway for storage. RWE said hydrogen-ready gas power plants could start production at earliest from 2030 provided the German government approves a support regime for such plants. Equinor will continue other early-phase hydrogen projects, such as in Britain and the Netherlands, as well, Eidsvold added. ($1 = 0.8955 euros) Sign up here. https://www.reuters.com/business/energy/norways-equinor-scraps-plans-export-blue-hydrogen-germany-2024-09-20/

2024-09-20 19:58

Sept 19 (Reuters) - The families of the six workers who died in the March collapse of the Francis Scott Key Bridge in Baltimore filed lawsuits on Friday against the owner and operator of the cargo ship that struck the bridge. The lawsuits filed in Maryland federal court by the families of Carlos Daniel Hernandez Estrella, Alejandro Hernandez Fuentes, Miguel Angel Luna, Dorlian Ronial Castillo Cabrera, Maynor Yasir Suazo Sandoval and Jose Mynor Lopez seek unspecified damages from the registered owner of the ship, Grace Ocean Pte Ltd, and its manager, Synergy Marine Group, claiming they negligently allowed the ship to depart Baltimore when they knew it was plagued by mechanical issues. Julio Cervantes Suarez, another worker who survived the bridge's collapse, filed a separate lawsuit on Friday against the companies, also seeking unspecified damages for his injuries. Cervantes was in his truck when it fell into the river from the bridge, according to his lawsuit. Darrell Wilson, a spokesperson for the companies, said in a statement that the filing of the claim was anticipated ahead of a September deadline but declined to comment on its merits. "We do look forward to our day in court to set the record straight," Wilson said. Craig Sico, one of the attorneys representing Maynor Yasir Suazo Sandoval's family, said the lawsuits were filed as part of a coordinated effort between the victims' families. "It's our belief that the crew of the Dali could foresee this incident taking place," Sico told Reuters in an interview. The U.S. Department of Justice filed a lawsuit on Wednesday against the companies over the disaster, accusing the companies of wilfully ignoring or mishandling mechanical problems on the ship. The department's lawsuit seeks at least $100 million it says the government spent in responding to the disaster and clearing the wreck of the Dali ship and bridge debris from the Port of Baltimore so the waterway could reopen in June. In the early morning of March 26, the container ship lost power and crashed into a support pylon, sending the bridge into the Patapsco River and killing six people who were working on the span at the time of the crash. Grace Ocean and Synergy filed a petition on April 1 in Maryland federal court to limit their liability from the crash to the present value of the ship and its cargo, which they estimated to be just over $43 million, according to the petition. Claimants have until Sept. 24 to come forward. The company that employed the workers who died in the collapse, Brawner Builders, also sued Grace Ocean and Synergy on Wednesday, seeking an unspecified sum in damages for the deaths of its workers and loss of construction vehicles and equipment on the bridge. Also on Friday, Ace American Insurance filed a lawsuit against Grace Ocean and Synergy, seeking to recoup $350 million it said it paid to the Maryland Transportation Authority after the bridge's collapse as part of a property insurance policy. Representatives for Ace American, now known as Chubb, did not immediately respond to a request for comment. A spokesperson for Grace Ocean and Synergy did not immediately respond to a request for comment on the Chubb lawsuit. Sign up here. https://www.reuters.com/world/us/families-workers-killed-baltimore-bridge-collapse-sue-cargo-ship-owner-operator-2024-09-20/

2024-09-20 19:20

NEW YORK, Sept 20 (Reuters) - A roaring rally in U.S. stocks will face a gauntlet of economic data, looming political uncertainty and a corporate earnings test in coming weeks as investors navigate one of the most volatile periods of the year for equity markets. The benchmark S&P 500 (.SPX) , opens new tab this week hit its first closing all-time high in two months after the Federal Reserve unveiled a hefty 50-basis point rate cut, kicking off the first U.S. monetary easing cycle since 2020. The index is up 0.8% so far in September, historically the weakest month for stocks, and has gained 19% year-to-date. But the rocky period could carry over until the Nov 5 election, strategists said, leaving the S&P 500 vulnerable to market swings. "We're entering that period where seasonality has been a bit less favorable,” said Angelo Kourkafas, senior investment strategist at Edward Jones. "Despite the excitement about the start of the new rate-cutting cycle, it could still be a bumpy road ahead." The second half of September is historically the weakest two-week period of the year for the S&P 500, according to a Ned Davis Research analysis of data since 1950. The index has also logged an average 0.45% decline in October during presidential years, data from CFRA going back to 1945 showed. Volatility also tends to pick up in October in election years, with the Cboe Market Volatility index (.VIX) , opens new tab rising to an average level of 25 at the start of the month, as opposed to its long-term average of 19.2, according to an Edward Jones analysis of the past eight presidential election years. The VIX was recently at 16.4. The market could be particularly sensitive to this year's close election between Republican Donald Trump and Democrat Kamala Harris. Recent polls show a virtually tied race. "Unless the data deteriorates considerably, we think U.S . elections will start to be more at the forefront," UBS equity derivative strategists said in a note. Investors are also looking for data to support expectations that the economy is navigating a "soft landing," during which inflation moderates without badly hurting growth. Stocks fare much better after the start of rate cuts in such a scenario, as opposed to when the Fed cuts during recessions. The coming week includes reports on manufacturing, consumer confidence and durable goods, as well as the personal consumption expenditures price index, a key inflation measure. Attention will be squarely on employment after Fed Chair Jerome Powell said the central bank wanted to stay ahead of any weakening in the job market as the Fed announced its cut this week. The closely-watched monthly U.S. jobs report is due on Oct 4. "We're going to have hyper-focus on anything that speaks to the strength of the labor force," said Art Hogan, chief market strategist at B Riley Wealth. Meanwhile, the rally in stocks has pushed up valuations. The S&P 500 has a price-to-earnings ratio of 21.4 times expected 12-month earnings, well above its long-term average of 15.7, according to LSEG Datastream. With the scope for valuations to go higher now more limited, investors said that puts a greater burden on corporate earnings to be strong in order to support stock gains. Third-quarter reporting season kicks off next month. S&P 500 earnings for the period are expected to have climbed 5.4% from the prior year, and then jump nearly 13% in the fourth quarter, according to LSEG IBES. FedEx (FDX.N) , opens new tab shares tumbled on Friday after the delivery giant reported a steep quarterly profit drop and lowered its full-year revenue forecast. "Extended multiples put pressure on macro data and fundamentals to support S&P 500 prices," Scott Chronert, head of U.S. equity strategy at Citi, said in a report. Sign up here. https://www.reuters.com/markets/us/wall-st-week-ahead-investor-focus-turns-data-election-earnings-after-fed-cut-2024-09-20/

2024-09-20 18:26

Loonie notches weekly gain of 0.2% Retail sales rise 0.9% in July Price of US oil increases 0.5% Bond yields rise across the curve TORONTO, Sept 20 (Reuters) - The Canadian dollar steadied against its U.S. counterpart on Friday as domestic data showed retail sales rising more than expected in July and despite the greenback notching gains against some other major currencies. The loonie was trading nearly unchanged at 1.3560 to the U.S. dollar, or 73.75 U.S. cents, after moving in a range of 1.3543 to 1.3589. For the week, the currency was up 0.2%. Canadian retail sales grew by 0.9% in July from June, eclipsing forecasts for a gain of 0.6%, while a preliminary estimate showed sales up 0.5% in August. The data "may ease concerns that the economy has slowed sharply," Shaun Osborne, chief currency strategist at Scotiabank, said in a note. "That should help limit upside movement in the USD at least." The U.S. dollar (.DXY) , opens new tab strengthened against a basket of major currencies after the Bank of Japan left interest rates unchanged. The American currency was clawing back some declines after the Federal Reserve kicked of its easing cycle on Wednesday with a half-percentage-point reduction in interest rates. The Fed's larger-than-usual rate cut has led to investors raising bets the BoC would increase the size of its cuts. The central bank has eased three times since June, moving in quarter-percentage-point steps. Still, BoC Governor Tiff Macklem said adoption of artificial intelligence by businesses could add to price pressures in the short term by boosting demand. The price of oil , one of Canada's major exports, added to its weekly gain, advancing 0.5% to $72.34 a barrel. Canadian bond yields moved higher across the curve. The 10-year was up 1 basis point at 2.937%, having rebounded from a 16-month low on Tuesday at 2.829%. Sign up here. https://www.reuters.com/markets/currencies/canadian-dollar-clings-weekly-gain-retail-sales-beat-estimates-2024-09-20/