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The rosy outlook of chipmaker TI soothes tariff concerns for the moment
Texas Instruments announced a second-quarter revenue forecast that was above Wall Street expectations on Wednesday. The company attributed this to a robust demand for analog chips, despite the fact that the threat of U.S. Tariffs has created uncertainty in the semiconductor industry. TI shares rose more than 5% after-hours following the announcement. This was the first major U.S. semiconductor company to provide an outlook this earnings season. The stock price had dropped over 17% this year due to macroeconomic worries and trade tensions. LSEG data shows that TI estimates revenue for the quarter ending June between $4.17 and $4.53 Billion, compared to analysts' average estimate $4.10 Billion. The earnings per share is projected to be between $1.21-$1.47, which is also higher than the average estimate. Kinngai Chang, senior analyst with Summit Insights Group, says that the positive forecast is driven by "cyclical demand recovery" and possible tariff pull-ins. Haviv Ilan, the CEO of Haviv Group, sounded a cautionary note. On a call after earnings, Haviv Ilan said, "We'll have to wait and see" what happens in the second half 2025, as well as into 2026. He cited ongoing uncertainty regarding tariff policy. According to an April notice by the Chinese main semiconductor association, while President Trump has exempted for now semiconductors from further levies and tariffs, Beijing has imposed high tariffs on U.S. made chips. Analysts asked Ilan if customers were stockpiling the chips in anticipation of expected taxes. I would guess that in a time of uncertainty, you might want to stock up on a bit more inventory. He said. Tore Svanberg, Stifel's analyst, noted that it may be too soon to determine the impact of the increased tariffs and escalating Sino U.S. Trade tensions on the chip company and the industry as a whole due to the ongoing tariff negotiations. CHINA WORRIES TI, a company with significant manufacturing capacity in America, derives about a quarter of its revenue annually from China. This makes it vulnerable to ongoing tit for tat tariffs between Beijing & Washington. Ilan stated that the company could use its manufacturing facility in China to meet any needs. Since years, the legacy chipmakers have worked to adopt a “China-for China” policy. They set up fabs to meet domestic demand in the face of escalating tensions. TI is facing stiff competition in China, where state subsidies have boosted the production of mature-node chips. Ilan stated that "the competition in China has intensified." (Reporting by Arsheeya Bajwa in Bengaluru; Editing by Tasim Zahid)
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Gold sinks and stocks rise as US tariffs on China are not sustainable
The dollar rose against the euro, and other currencies on Wednesday. Meanwhile, gold-backed safe-havens fell as the Trump Administration signaled its willingness to deescalate the trade war. U.S. Treasury secretary Scott Bessent stated that the high tariffs between China and the United States are not sustainable. Meanwhile, U.S. president Donald Trump indicated he would be open to easing the trade tensions. Persons familiar with the discussions said that the White House was open to a rate reduction on Chinese imports to help advance the negotiations with Beijing, but would not be doing so alone. Trump, who had threatened to fire Federal Reserve Chairman Jerome Powell on Tuesday evening, has now backed down from his threats. The market is looking for a softer stance towards China on trade and tariffs. It would also be nice to see a sign of a willingness to negotiate, and to ease off from the current high tensions. Investors have been concerned about U.S. assets due to Trump's tariff war. Stocks rose on Wednesday as well, thanks to some positive earnings reports in the U.S. Boeing shares rose 6.1% after the company reported a smaller-than-expected quarterly loss. The Dow Jones Industrial Average rose by 419.59, or 1.07 percent, to 39.606.57. The S&P 500 gained 88.10, or 1.67% to 5,375.86. And the Nasdaq Composite increased by 407.63, or 2.50 percent, to 16,708.05. Tesla shares rose 5.4% despite the fact that company results were below analyst expectations. Elon Musk, the Tesla CEO, said in a conference call with analysts that he will significantly reduce his work at the Department of Government Efficiency starting next month so he can focus on his companies. Tech and consumer discretionary accounted for the largest percentage gains among the 11 major S&P 500 sectors, while consumer staples, energy, and other areas lagged. The MSCI index of global stocks rose by 11.95 points or 1.50% to 808.21. The pan-European STOXX 600 ended up 1.78%. Spot gold fell 3% after hitting record highs recently, to $3,281.6 per ounce. The dollar rose 1.27% to 143.435 yen. The dollar last gained 1.32% against the Swiss Franc at 0.8298. The euro fell 0.86%, to $1.132. This is a drop from $1.15 earlier in the week. That was a 3-1/2 year high. Benchmark 10-year rates, which move in the opposite direction to prices, declined on Wednesday. This was a partial relief for investors who had been concerned about Trump's new trade and economic policies. The bond rally lost steam as the economic data released Wednesday was mixed with some surprises on the upside. One of them was a reading of the U.S. Department of Commerce for home sales in March that was higher than expected. The benchmark 10-year Treasury yields last stood at 4.385%. This is a little lower than Tuesday. The 30-year yields fell by five basis points, to 4.83%. Citadel's CEO and founder Kenneth Griffin warned that Trump's government must be cautious about the potential damage done to U.S. Treasury bonds. The price of oil ended lower. U.S. crude fell $1.40, settling at $62.27 per barrel. Brent crude dropped $1.32, settling at $66.12. (Analysts Amanda Cooper and Wayne Cole, Sydney, and Lewis Krauskopf, New York, and Bernadette, Baum, Gareth Jones and Mark Heinrich in New York, and Sandra Maler, Cynthia Osterman, and Sandra Maler, contributed to this report.)
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FirstEnergy's profit beats estimates for the first quarter on higher electricity prices
FirstEnergy, a utility company, beat Wall Street expectations for its first-quarter adjusted profits on Wednesday. The utility was helped by a rate increase. U.S. Electric utilities are investing more in infrastructure as a result of extreme weather and a growing demand. This is to meet the demand, but also improve resilience. Rate case proceedings are used by utilities to calculate the cost of electricity, natural gases, private water, and steam according to investments made by customers. As the demand for electricity from AI data centres, domestic manufacturing and electrification of industry increases, power bills will rise. The company reported that its total quarterly distribution deliveries increased by more than 4% in comparison to last year when the weather was mild. The adjusted quarterly profit for its integrated and distribution segments increased by 10 cents each from the previous year. FirstEnergy provides electricity to about 6,000,000 customers in Ohio, Pennsylvania and New Jersey. It also serves West Virginia, Maryland, West Virginia, and West Virginia through its three segments: distribution, integrated transmission, and stand-alone. According to data compiled and analyzed by LSEG, the Akron, Ohio, based company posted an adjusted profit per share of 67 cents in the first three months, compared to analysts' estimates of 61 cents. Reporting by Tanay and Pooja in Bengaluru, editing by Alan Barona
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GM will increase production at Ohio transmission plant
General Motors confirmed on Wednesday that it is increasing the production of transmissions in its Toledo, Ohio plant, and shifting away from manufacturing EV drive units to parts for gasoline cars. Transmission plant is used to support the production of light trucks in Fort Wayne, Indiana. First reported that GM was going to increase production in the Indiana assembly plant after U.S. president Donald Trump announced 25% auto import tariffs. A spokesperson from the automaker stated that the shift in production at Toledo was not due to tariffs. General Motors is revising production plans for Toledo Propulsion in order to accommodate additional capacity of ICE propulsion units, in line with the current market demand. When GM After a $760-million investment, Toledo became the first U.S. factory to produce EV powertrains. The automaker still hasn't produced retail drive units at the Toledo facility. In a memo to workers, Rob Morris, Toledo's plant director, explained that the company has decided to increase capacity in order to meet the current demand for ICE products. The memo stated that the second drive-unit production line would not be updated, and one of the production lines for drive units in the facility will be converted into a transmission. GM made some other changes to its EV plan, including delaying the start of EV production at Orion Assembly Plant in Michigan. It failed to meet its EV production target of producing and wholesale 200,000 EVs across North America by 2024. Instead, it ended up with 189,000 units. Separately, Trump's Tariffs The automakers have changed their ways or expedite investment plans. Some automakers and suppliers are seeking to increase investment in the U.S., to avoid the steep duties. Others are waiting to see whether the duties will stick. Center for Automotive Research Analysis Find out Trump's 25% tariffs on autos, imposed by him in early April, will cost automakers in the U.S. $108 billion in 2025. Import taxes on auto parts are still scheduled to be implemented by May 3. (Reporting and editing by Diane Craft in Detroit, Kalea Eckert and Nora Eckert)
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Newmont profits beat estimates, as the gold rally outweighs weak production.
Newmont, the world's largest gold miner, beat Wall Street expectations for its first-quarter profits on Wednesday. A rally in bullion helped offset lower production and sent its shares up by 2% after-hours. Gold prices have been increasing over the last few quarters, and reached record highs from January to March, when fears over Donald Trump's unpredictable tariff plans sparked a global trade conflict, driving investors towards the safety of gold. Newmont's average quarterly realized gold price jumped 41%, to $2,944 an ounce. Gold production, however, fell 8.3%, to 1,54 million ounces. This was due to lower contributions from non-core operations. In February of last year, the company announced that it would sell off non-core assets to reduce its debt. As of March 31, this debt was $3.22 billion. Newmont announced late last year that it would sell the Eleonore Mine in Canada to UK-based Dhilmar Ltd. for $795 millions and its Musselwhite Gold Mine, located in Ontario, to Orla Mining. The deal was valued at $850million. Discovery Silver, a gold mining company, announced in January that it would purchase Newmont's Porcupine Operations stake in Ontario, Canada for $425 millions. Newmont's quarterly total costs, which reflect the industry's overall expenses, increased 14.7% in the quarter January-March due to lower production. According to LSEG, on an adjusted basis the company earned $1.25 a share for the three months ended March 31. This compares with the analysts' average estimate, which was 90 cents a share. Reporting by Tanay in Bengaluru, Editing by Tasim and Devika Syamnath
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California Governor seeks assistance for struggling oil refiners
California Governor Gavin Newsom directed state officials in California to increase efforts to ensure reliable fuel supplies to the nation's largest auto market. This prompted oil companies to blame state policy for difficult business conditions, and high pump prices. Newsom's April 21 letter to California Energy Commission vice chair Siva Gunda was seen by us on Wednesday. This came just days after Valero Energy announced that it would permanently close or restructure the refinery in Benicia by April 2026. Benicia refinery represents about 9% state crude oil refining capability. Newsom wrote: "I am writing to ask you to intensify the efforts of the State to work closely and immediately with refiners to plan short and long term, as well as to ensure that Californians have access to reliable, safe and affordable transportation fuels." Newsom said that, although the demand for gasoline in California was on a downward trend, it would continue to exist in years to come. The Governor set a deadline of July 1, for the CEC, to make recommendations on how to manage fuel supplies in the state during the energy transition. He also asked the agency to reinforce its belief that refiners could operate profitably. California has one of the most aggressive policies on climate change in the United States and has set a goal for 2035 to ban all new gasoline powered cars. California has some of the highest gasoline prices in the United States, due to its reliance on imports to compensate for a declining supply. Newsom claimed that the Trump administration is responsible for the economic instability and market turmoil which are harming oil companies. A trade group for refining said this assertion was false and blamed California instead. Chet Thompson of the American Fuel & Petrochemical Manufacturers said that Governor Newsom's letter directing the California Energy Commission to'redouble its efforts' to work with refiners to'make them see the value' in serving the Californian market is a joke and a blatant attempt to cover his behind," he wrote in an emailed message. Fuel manufacturers in California struggle to compete and California drivers pay the highest prices for fuel because of state policies. Not the new administration in Washington. Reporting by Nichola Choy Editing by Marguerita Groom
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Gold, stocks and the dollar fall as US tariffs on China are not sustainable
The dollar rose against the euro, and other currencies. Gold, a safe haven for investors, fell as Trump's administration indicated a willingness deescalate the trade war. Scott Bessent, U.S. Treasury secretary, said that the high tariffs between China and the United States are not sustainable. U.S. president Donald Trump told journalists that the U.S. "will have a fair agreement with China," without giving any details. Trump, who had threatened to sack Federal Reserve Chairman Jerome Powell on Tuesday evening, has now backed down from his threats. Peter Cardillo is the chief market economist of Spartan Capital Securities, a New York-based brokerage. Investors have been concerned about U.S. assets due to Trump's tariff war. Stocks were also boosted by some earnings reports in the U.S. Boeing shares were up 6.6% after the company reported a smaller-than-expected quarterly loss. The Dow Jones Industrial Average rose by 426.71 or 1.09% to 39,612.42. The S&P 500 gained 91.83 or 1.73% to 5,379.12. And the Nasdaq Composite increased by 457.34 or 2.79% to 16,755.85. Tesla shares rose 8.1% despite the fact that company results were below analyst expectations. Elon Musk, the Tesla CEO, said in a conference call with analysts that he will significantly reduce his work at the Department of Government Efficiency starting next month so he can focus on his companies. The MSCI index of global stocks rose by 11.56 points or 1.45% to 807.82. The pan-European STOXX 600 ended up 1.78 %. Spot gold fell 3% after hitting record highs recently, to $3,281.6 per ounce. The dollar index (which measures the greenback in relation to a basket including the yen, the euro and others) rose by 0.32%, while the euro fell by 0.88%, at $1.1319. The dollar gained 1.32% against the Japanese yen to reach 143.45. Citadel's CEO and founder Kenneth Griffin stated on Wednesday that Trump’s administration must be cautious about the potential damage done to U.S. Treasury bonds. Investors are worried that the White House's pressure to reduce interest rates could fuel inflation, just as Trumps tariffs increase prices. The benchmark yields on U.S. Treasury securities have remained relatively unchanged. The yield on the benchmark U.S. 10 year notes was unchanged at 4,389% as of late Tuesday. U.S. crude oil fell $1.40, settling at $62.27 per barrel. Brent crude dropped $1.32, settling at $66.12.
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Sources say OPEC+ will consider accelerating output if oil prices drop 3%
The oil prices fell 3% on Tuesday as sources claimed that OPEC+ was considering accelerating their output increases for June. However, losses were reduced following a report stating that U.S. president Donald Trump could reduce tariffs on Chinese imports. Brent crude futures fell $1.92 or 2.85% to $65.52 at 1:42 pm EDT (1742 GMT), while U.S. West Texas intermediate crude dropped $1.99 or 3.13% to $61.68. Three sources familiar with OPEC+ discussions said that several OPEC+ members would suggest to the group that it increase oil production for a second month consecutive in June. Recent tensions have arisen among OPEC+ member countries over the compliance with production quotas. "It would not surprise me if OPEC wanted to increase production." This could cause concern about the cohesion within the cartel. "Maybe they're tired holding back production increases," said Phil Flynn an analyst at Price Futures Group. Brent traded at $68.65 per barrel earlier in session, which was its highest price since April 4. After the OPEC+ announcement, both benchmarks dropped more than $2. Futures pared losses in the early afternoon trading, following a report by the media in which Kazakhstan Energy minister Erlan Akkenzhenov stated that the country was meeting its obligations towards OPEC+. He also said they were working together to find "mutually satisfactory solutions" for its oil production management. Akkenzhenov had earlier said that his country would put national interests ahead of those of OPEC+ producers when deciding the level of its oil production. Kazakhstan angered OPEC+ by producing more than the quota. The Energy Information Administration reported on Wednesday that U.S. crude stockpiles increased while gasoline and distillate stocks posted greater-than-expected declines last week. The EIA reported that crude inventories increased by 244,000 barrels, to 443.1 millions barrels for the week ending April 18. This was a much higher figure than analysts had expected in a poll. They were expecting a draw of 770,000 barrels. Potential for Tariff Reprieval News about trade tariffs has helped to curb some oil prices losses. A source familiar with this matter told Reuters on Wednesday that the Trump administration was considering lowering tariffs for imported Chinese products pending discussions with Beijing. Any action would not be taken unilaterally. A Wall Street Journal article citing an official of the White House said that China's tariffs will likely be reduced by between 50% and 60%. U.S. Treasury secretary Scott Bessent stated that he believes excessively high tariffs will need to be reduced between the U.S. After criticising the Fed's failure to cut interest rates for days, Trump has now backed down from his threat to fire Federal Reserve chair Jerome Powell. This eases investor concerns about economic uncertainty. The U.S. has issued new sanctions against an Iranian shipping magnate who's network deals with Iranian crude oil and liquefied gas worth hundreds of million dollars. (Reporting from Georgina Mccartney in Houston and Shadia Nasralla. Additional reporting by Robert Harvey, London, Jeslyn Lerh, Singapore. Editing by Louise Heavens. David Goodman. Rod Nickel. Nia Williams.
OPEC+ will consider another accelerated increase in oil production for June
Three sources with knowledge of OPEC+ discussions have said that several OPEC+ members are likely to suggest that the group increase oil production in June, for a second month running. This is because a dispute between members about compliance with production quotas has worsened.
Oil prices fell to a four-year-low in April. This was due to a U.S. - China trade war, and a surprise decision by OPEC+ in May that they would increase their output by 411,000 barrels of oil per day - three times what the group had originally planned.
Three sources, without naming specific countries, said that some countries wanted to increase production by the same volume as the increase in May.
On May 5, eight OPEC+ member countries will gather to discuss the output plan for June.
Requests for comments from the Organization of the Petroleum Exporting Countries (OPEC) and the Saudi Arabian Authorities were not immediately responded to.
The oil prices that were positive in the early trading on Wednesday turned negative later. Brent crude, a global benchmark, traded down by more than 2%, to less than $66.50 a barrel.
OPEC+ sources claim that Saudi Arabia pushed to increase output faster in May, after Kazakhstan and Iraq upset the kingdom with their production levels. OPEC+ senior ministers met on April 5, and said that compliance must improve.
Kazakhstan said, however, that it would put national interests ahead of those of OPEC+ in deciding output levels.
The Kazakh Energy Minister said on Wednesday that the country would not be able to reduce the production of independent oil companies on its land and would also not close its own oil fields, as this would harm their future production.
Amrita Sen is the co-founder and CEO of Energy Aspects. She said, "Kazakhstan’s statement confirms our belief that OPEC+ will implement another accelerated unwind for three months again at the May meeting. It may also continue in July or through the summer."
Overproducers
Kazakh oil production fell by 3% in the first two months of April compared to the average of March, but it was still higher than the OPEC+ quota that the country had promised to meet following months of overproduction.
Iraq, the largest producer in the group, has also announced it will reduce output. However, Kpler data shows that exports have increased month-over-month for April.
Not all eight OPEC+ members who are increasing production in response to earlier voluntary cuts do not support a faster increase.
Two separate OPEC+ source said that some countries, such as Russia, prefer to stick with the slower monthly production increases of 135,000 bpd, which were approved earlier, to avoid a crash in prices.
The OPEC+ production increase follows calls by U.S. president Donald Trump to lower oil prices. He also returned to his "maximum-pressure" policy on Iran, whose oil exports Washington wishes to reduce to zero.
Trump will visit Saudi Arabia next May, and calls the country one of America's most important Middle East allies.
The potential increases in May and June are part of an overall plan by Russia and Saudi Arabia to slowly unwind the most recent production cut of 2.2 millions bpd.
OPEC+ has also agreed to cut 3.65 million bpd in other production until the end next year. This will support the market. Reporting by Ahmad Ghaddar and Olesya Astakhova. Editing by Simon Webb and David Goodman.
(source: Reuters)