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Treasury yields decline, US stocks rise; investors evaluate US tax bill
The 30-year U.S. bond yields rose to their highest level in nearly a year before they eased on Thursday. Worries about the U.S. budget outlook and demand for debt remained, but stocks on Wall Street, including tech-related stocks, rose. After recent losses, the U.S. Dollar has strengthened. The yields increased earlier after the U.S. House of Representatives passed the tax bill of President Donald Trump by a single solitary vote late Thursday, adding to concerns about the debt load of the country. The bill would provide new tax breaks for car loans and tips, and increase spending on border security and military. The Congressional Budget Office (CBO) estimates that Trump's tax cut bill will add $3.8 billion to the $36.2 trillion of U.S. national debt in the next decade. Moody's was the last major credit rating agency to remove the U.S. from its triple-A status late last week. Some buyers were attracted by the recent drop in bond prices, which moves inversely with yields. Last week, the 30-year bond yield dropped 3.7 basis points to 5.0521%. Weak demand for the sale of $20 billion in 20-year bonds Wednesday heightened concerns over reduced interest rates on U.S. government debt. The benchmark 10-year and 30-year yields both rose by about 50 basis points in the last month. Ed Al-Hussainy is a senior rates analyst with Columbia Threadneedle Investments. He said that the Treasury market was looking for a "circuit breaker". This can be in the form poor labor market statistics to trigger (Federal Reserve's) cuts and trigger an assessment of the strength the economy. U.S. stock prices rose on Thursday, after dropping in the previous session. Jake Dollarhide is the chief executive officer of Longbow Asset Management, located in Tulsa. The market is a safe haven for technology at this time. The Dow Jones Industrial Average rose by 177.19, or 0.4%, to 42.037.60. The S&P 500 gained 28.89, or 0.4%, to 5.873.50. And the Nasdaq Composite gained 176.57, or 1.94 percent, to 19,049.21. Alphabet shares rose 2.3% while the sector of communication services rose 1%. The MSCI index of global stocks rose by 0.09 points or 0.01% to 874.00. The pan-European STOXX 600 fell by 0.64%. Figures showed that the British government borrowed more in April than was expected, and euro zone businesses unexpectedly returned to contraction. After the data, the euro fell while the U.S. Dollar rose after three consecutive days of losses. The euro last fell 0.41% to $1.1283. The dollar gained 0.29% against the Japanese yen to reach 144.08. Bitcoin, on the other hand, reached a new high partly because investors were looking for alternatives to U.S.-based assets. Bitcoin's last gain was 3.25%, at $111 795 51. The oil price was affected by a report that OPEC+ has discussed a production boost for July. Brent futures dropped 47 cents or 0.72% to settle at $64.44 per barrel. U.S. West Texas Intermediate Crude eased 37 cents or 0.6% to settle at $60.20.
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Rio Tinto to build second lithium project in Chile
Rio Tinto, the global miner, has been chosen by Chilean authorities for a second time in this week to be a partner on a new lithium project. The state-run mining company ENAMI announced its partnership with Altoandinos Lithium Project Thursday. ENAMI reported that Rio Tinto would initially invest $425 million in the project. This will total an investment of $3 Billion. ENAMI holds an initial stake of 49 % and two board positions, while Rio will have three board members. ENAMI stated that Rio's investment in Altoandinos will cover a feasibility study, the use of a pilot plant on its Rincon project, as well as its direct lithium extraction technologies. ENAMI stated in a press release that "Rio Tinto offers a financing solution which ensures the resources necessary for the project up until commercial operation." Rio Tinto stated in a separate press release that it would "advance towards binding agreements as soon as possible", and that feasibility studies will enable a final decision on investment. ENAMI also considered French mining company Eramet, Chinese automaker BYD and Korean Steel Group Posco as potential developers. Ivan Mlynarz, ENAMI's head, said: "After an in-depth analysis we found that Rio Tinto offered the best value to ENAMI." Rio was selected on Monday by the state-run copper mining company Codelco for its Maricunga Lithium project. (Reporting and editing by Kyra Madry; Daina Beth Solon)
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Enel's Italian shareholders have approved up to 3.5 billion euros in investor rewards
Enel, Italy's largest utility, approved on Thursday a plan for a share buyback and the option to cancel shares acquired without reducing capital. This allows Enel to reward its investors more. The board was given the authority to buy back up to 500,000,000 shares at a maximum cost of 3.5 billion Euros ($3.95 billion). Enel’s board will now decide when and how much to spend on the first tranche. Financial analysts say the utility controlled by the government could spend up to 1 billion euros on the first tranche of buybacks, in an effort to increase the value. Share buyback programs were introduced by European oil and gas companies, including Shell TotalEnergies, and Eni of Italy in order to attract investors. Endesa's Spanish subsidiary, announced recently a share buyback program worth up to two billion euros by 2027. A 500 million euro tranche of the programme was launched at the beginning of April.
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White House focuses on food, chemicals and overtreatment in report about childhood diseases
On Thursday, a commission headed by U.S. Secretary of Health Robert F. Kennedy Jr. released a report in which it stated that processed foods, chemicals, stress, and the overprescription and vaccinations and medications may be contributing factors to chronic illnesses among American children. Kennedy said that the report of the commission was "a call to action to act urgently to stop this crisis". This crisis is characterized by an increase in childhood obesity, diabetes and cancer rates, as well as mental disorders, allergies, and neurodevelopmental disorders such autism. It did not recommend specific regulations or restrictions for pesticides in agriculture, as some farming groups had feared. However, it did draw attention to studies that linked health disorders in animals and humans with the weedkillers glyphosate, and atrazine. The report said that the chemicals needed to be researched further. Bayer, the company involved in thousands lawsuits involving its herbicide Roundup containing glyphosate, has said that some of the details in this report are not "fact-based". Bayer stated that "we believe a fact-driven and data driven approach, with robust science following international gold standards, is necessary to support this important initiative." The report reiterated Kennedy's previous statements that highly-processed foods and additives pose health risks, and that the food and beverage industry has too much influence in forming public health recommendations such as the Dietary Guidelines. At a press event, he stated that there was consensus on the need to prioritise what he termed as the crisis of ultra-processed foods. The American Soybean Association criticized the report for being "drafted completely behind closed doors", and incorrectly suggesting that pesticides or soy oil contribute to negative health outcomes. We're discouraging the consumption of heart-healthy oil and forcing people to use fats which will make them unhealthy and cost more. "This is exactly the opposite of what government should do," said Alan Meadows, ASA Director and soybean farmer. The report also criticizes the U.S. childhood vaccine schedule, stating that the number of vaccinations recommended for American children is higher than many European countries. It stated that the effects of vaccine injuries and the link between vaccines, chronic diseases should be investigated. Kennedy, a vaccine skeptic for years, has pushed theories that are contrary to science about vaccine safety. FARM LOBBY SUBSTANCE PRESSURE The policy prescriptions are due in August after the report on Thursday. In February, President Donald Trump issued an executive order establishing the Make America Healthy Again Commission. The commission will investigate chronic illnesses and develop an action plan for combating childhood diseases. The U.S. Department of Health and Human Services and White House jointly manage the commission, with Kennedy as its chairman and the chief of the Domestic Policy Council as its executive director. It includes Agriculture Secretary Brooke Rollins, other cabinet members and federal health agency heads as well as senior White House officials. Farm lobby groups warned before the report was published that criticizing certain farm practices would impede collaboration with the health agenda of the administration and could put food production in danger. A source with knowledge of the issue said that the lobby groups were very insistent on the administration not to mention pesticides. Environmental Protection Agency (EPA) head Lee Zeldin told reporters on a conference call that farmers were key partners in the MAHA agenda, and that any change to pesticide regulations should be carefully considered. He said that "American farmers depend on these products and any further regulation or restrictions of crop protection tools must take into consideration the costs and benefits of adequate protection and alternatives," as well as risk-based scientific processes. Kennedy worked with attorneys from Wisner Baum to win a $289m verdict in 2018 for a Californian man diagnosed with non-Hodgkin lymphoma because he used Roundup regularly as part of his job. The verdict was reduced later to $20.5million. Kennedy also claimed that he had been involved in at least two cases against Roundup maker Monsanto which was acquired Bayer. The report recommended that as a next step, there be a greater focus on drug safety and research and improved surveillance of drugs and their effects on childhood health. It also called for clinical studies to compare the whole-food and processed-food diets among children. The report says that ultra-processed foods, which it describes as industrially-manufactured food products, are associated with poor health. The report cites infant food as an ultraprocessed product that is worrying, saying that more parents are buying European brands. MAHA activists are concerned about certain oils used in infant formula. However, these ingredients provide important fats.
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Modi declares that Pakistan will not receive water from rivers controlled by India
Indian Prime Minister Narendra modi reaffirmed on Thursday that Pakistan would not be able to access water from rivers where India holds rights. This was a further escalation of rhetoric in the standoff over access to water sparked by a deadly Indian Kashmir attack. In an interview, Pakistan's chief lawyer said that Islamabad was willing to talk about water sharing with its neighbours, but India had to stick to the decades-old treaty. India announced last month that it would suspend the Indus Waters treaty as part of a series of measures in response to the attack on Indian Kashmir, which New Delhi attributed to Islamabad. Pakistan denies this charge. A move to deny Pakistan the right to access water would be devastating. The Indus Treaty, which was negotiated in 1960 by the World Bank, ensures that 80% of Pakistani farms will have access to water from three rivers flowing from India. Before agreeing on a ceasefire, the nuclear-armed neighbors had already fought in their most intense military conflict in almost three decades. Pakistan will have to pay for each terrorist attack. Pakistan's military will be responsible. Modi told a crowd at an event in Rajasthan, a state bordering Pakistan that the Pakistani economy would pay hefty price for every terrorist attack. Mansoor Awan, Pakistan's Attorney general, said that Pakistan was willing to discuss or address any concerns. He said India wrote to Pakistan in recent days, citing population increase and clean energy requirements as reasons for modifying the treaty. He said that any discussion would be subject to the terms of the Treaty. Awan, a spokesperson for Islamabad, said that the treaty was legally binding and that no party could unilaterally suspend it. He added that "as far as Pakistan was concerned, the treaty was very much operational and functional and India did everything at its own risk and cost in terms of building any hydroelectric projects." The ceasefire has been mostly maintained. Subrahmanyam Jishankar, the Indian Foreign Minister, said that there are no active exchanges of gunfire and that "forces have been repositioned accordingly". "The military operation is continuing because it's a clear signal... that there will be a reaction if we see acts like the ones on April 22." Jaishankar said to Dutch news outlet NOS that "we will strike the terrorists". He added, "If terrorists are in Pakistan we will strike them there." Since 1947, when India and Pakistan were separated from British India, they have had a tense relationship. They have fought two wars over the Himalayan region called Kashmir, which both countries claim but only rule in part. India accuses Pakistan that it supports islamist separatists within Kashmir. Islamabad, however, denies this claim. In Pakistan's volatile Balochistan Province, a suicide blast on a school bus killed five people including three children on Wednesday. India has rejected the accusations of Pakistan's Prime Minister and Military that "Indian terror proxy" was involved. Since the attack in April, both nations have responded by closing their borders, suspending visas and stopping trade. (Reporting and editing by YPrajesh, Andrew Heavens and Sakshi Dayal)
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Scientists in the US predict a hurricane season above normal for 2025
Scientists from the U.S. Government said that they expected a hurricane season above normal in 2025. They expect three to five hurricanes of major intensity with winds sustained at a minimum of 111 miles per hour (179 km/h). According to the U.S. National Weather Service, 13 to 19 tropical storms will be named with winds at least 39 mph during the Atlantic hurricane season that begins June 1. Six to ten of these storms are expected to develop into hurricanes with wind speeds greater than 74mph. Ken Graham, Director of the National Weather Service, said that the main contributor to this is the warmer sea surface temperature. Both academic and private forecasters have given similar predictions for the current hurricane season that continues until November 30. In the Atlantic between 1991 and 2020 there were an average of 14.4 tropical storms named annually, with 3.2 major hurricanes on average among 7.2 hurricanes. Colorado State University's meteorologists predicted in early April that the 2025 Atlantic hurricane season will be above normal, with 17 named storms and nine hurricanes. Four of these are expected to be major. AccuWeather released its hurricane season forecast for 2025 in late March. The private weather service predicts between three and five hurricanes major out of seven to ten hurricanes, from thirteen to 18 named Tropical Storms. The hurricane season of 2024 was the most expensive on record. Five major hurricanes were among the 11 named storms that made up 18 hurricanes. The storms of 2024 caused the deaths of 427 individuals and total losses of $130 billion. (Reporting and editing by Nia Williams in Houston, Erwin Seba)
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Treasury yields fall, US stocks increase with technology; investors evaluate US tax bill
The 30-year U.S. bond yields rose to their highest level in nearly a year before they eased on Thursday. Worries about the U.S. budget outlook and demand for debt remained, but Wall Street stocks gained ground with tech-related gains. After recent losses, the U.S. Dollar has strengthened. The U.S. House of Representatives approved President Donald Trump's proposed tax bill with a single-vote, increasing concerns about the debt burden of the country. The bill would provide new tax breaks for car loans and tips, and increase spending on border enforcement and the military. Moody's was the last major credit rating agency to remove the U.S. from its triple-A rating. The yield on the 30-year U.S. bond was last down 3.2 basis point at 5.0573%. Weak demand for Wednesday's $16 billion in 20-year bonds increased worries about the interest rate on U.S. government debt. The yields on benchmark German 20-year bonds had reached their highest level in two months. U.S. stock prices rose on Thursday, after a sharp drop in the previous session. Jake Dollarhide is the chief executive officer of Longbow Asset Management, located in Tulsa. The market is a safe haven for technology at this time. The Dow Jones Industrial Average gained 51.28 points or 0.12% to 41,912.24, while the S&P 500 rose 8.79 points or 0.15% to 5,853.45. Meanwhile, the Nasdaq Composite grew 118.49 or 0.63% to 18,990.84. Alphabet shares rose 2.5% and the sector of communication services grew 0.9%. The MSCI index of global stocks fell by 1.92 points (0.22%) to 872.01. The pan-European STOXX 600 fell 0.72%. Figures showed that the British government borrowed more in April than was expected, and euro zone businesses unexpectedly returned to contraction. After the data, the euro fell while the U.S. Dollar rose after three consecutive days of losses. The euro fell 0.44% to $1.1279. The dollar rose 0.1% in late morning New York trading to 143.75yen, after dropping earlier to 142.80yen, its lowest level since May 7. Bitcoin, on the other hand, has risen to a new high partly because investors are looking for alternatives to U.S.-based assets. According to the non-partisan Congressional Budget Office, Trump's tax cut bill will add $3.8 billion to the $36.2 trillion of U.S. debt in the next decade. The oil price was affected by a report that OPEC+ has discussed a production boost for July. U.S. crude dropped 1.45% to $60.69 per barrel. Brent was down to $63.93 a barrel, a drop of 1.51% for the day.
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Rio Tinto searches widely for new CEO in contrast to BHP's strong bench
Rio Tinto will be casting a wide net when it searches for a new chief executive officer due to the fact that there is a short list of internal candidates. This is in contrast to BHP's laser-focused succession plan. Rio Tinto, the largest iron ore mining company in the world, surprised investors on Thursday by announcing that CEO Jakob Stausholm would step down at the end of the year, once a new successor has been appointed. The company did not give a reason for its decision. A source with knowledge of the matter stated that the board held meetings in the last few months on succession with the assistance of executive recruitment firm MWM Consulting. They vetted internal candidates such as Bold Baatar and Simon Trott, while also looking for external leaders. The next generation of mining leaders must be more aggressive. "There's less of it around, and they will need to take more risks to get that," said a person who consults top executives in the industry. The two mining giants have been in the process of changing their CEOs at a crucial time. This is because the demand for copper in various technologies, including artificial intelligence and clean energy transition, has become critical. The year 2024 was marked by a febrile atmosphere as the diversified miner companies failed to pull off major M&A deals. Both companies could hope for success with new leadership. Baatar (Singapore), Rio's Chief Commercial Officer, is a candidate who has received a lot of support from Rio's own internal candidates. In a note, RBC analysts stated that Baatar’s communication skills, portfolio knowledge and ability to solve problems (as demonstrated during his time at the Oyu Tolgoi Mine in Mongolia and Simandou Mine in Guinea) will be key for Rio. The Mongolian has held leadership positions at Rio in the marine and iron ore divisions. In 2016, he joined the Executive Committee, running the Energy & Minerals group before heading the copper division. Trott is the head of iron ore at Rio. He has been with Rio for more than 20 years. In Australia, Trott brought its largest new iron ore mining in over a decade to market. Trott also oversees a massive programme of replacement tons. Investors have reacted negatively to his leadership, citing the fact that Rio's ore exports have declined in quality and production has fallen short. Outside candidates Pecresse joined the company in October 2023 from General Electric Renewable Energy. Prior to this, he worked for Alstom and Imerys. He is regarded as an understated, sharp leader. His wife is French politician Valerie Pecresse. Other candidates include former Rio de Janeiro veterans Newmont CEO Tom Palmer and Andrew Cole, the previous OZ Minerals chief executive officer. This is in contrast to BHP, which has a strong internal team and where the CEO, Mike Henry, is expected to depart within the next year. A new CEO was announced at the time. BHP rotates its top talent regularly through key roles to ensure it has the depth and breadth of expertise available. As a pre-screening process, the board chair and other members mentor internal CEO candidates for many years, according to a source with knowledge of the company. In 2016, the company committed to having 40% of its staff be women by 2025. It is currently on track to meet that goal, and two of its top contenders are female. Geraldine Slattery, BHP's Australia President, is well-liked by investors because of her operational expertise. She previously led BHP's Texas petroleum business. She has worked at BHP for over 30 years. One investor described her as "steely". CFO Vandita Pant has been hailed as a calm and collected person in these uncertain geopolitical circumstances. She helped guide ABN Amro through the depths of the global financial crises, and worked at RBS with BHP’s new chairman, former RBS CEO Ross McEwan. Pant joined BHP as of 2016. Investors have suggested that her background in finance, and not operations, could be a weakness.
US backs Republican states in BlackRock Climate Case
U.S. antitrust enforcers backed up on Thursday the arguments used by Republican states accusing asset managers BlackRock Vanguard State Street and State Street, of conspiring to reduce coal production through climate activism.
The U.S. Department of Justice filed a statement of interests in the case in which Texas and 12 other States claim that the companies used their significant holdings in U.S. Coal companies to discourage the competition.
The agencies asked the judge in Tyler, Texas to reject the asset managers' arguments in their bid for dismissal, including the argument that the alleged misconduct falls under an exemption applicable to passive investors.
In their court brief, the agencies stated that the case involves the exact type of conduct, such as concerted efforts by the companies to reduce production, that has been long condemned under antitrust laws.
BlackRock stated that forcing asset management companies to divest their coal holdings would hurt the companies' ability to access capital and increase energy prices.
State Street claimed that it acts in the best interests of its investors, and that the lawsuit was baseless.
Vanguard reiterated that it will defend its previous comment that it will safeguard its history in protecting returns for investors.
First reported on Thursday, the agencies are expected to support state arguments.
This is a major political setback for top asset managers. BlackRock, Vanguard, and State Street, which together have $27 trillion, are under fire by conservative Republicans from states that produce energy. They claim the firms put social and environmental concerns ahead of maximising returns for customers.
BlackRock is, for example, facing restrictions or outright bans from managing public assets, in states such as Texas and Indiana, due to its ESG policies. In February, there were signs of thawing when BlackRock led a consortium that bought ports near the strategically important Panama Canal. The deal was hailed as a success by U.S. president Donald Trump.
Asset managers call the case "half baked" and claim there is no proof that they demanded a reduction in output. U.S. district judge Jeremy Kernodle will hear arguments in June on the asset manager's bid to dismiss the lawsuit. (Reporting and editing by J. Godoy, Ross Kerber and Chris Sanders; Nick Zieminski and Matthew Lewis)
(source: Reuters)