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U.S. stock fluctuates, oil drops amid earnings and trade talks
Wall Street was in a state of flux on Tuesday, with gains and losses, as investors tried to balance corporate earnings, progress made by President Donald Trump’s multi-fronted tariff negotiations and the generally negative economic data. The Dow Jones Industrial Average led the way, while all three major U.S. indexes rose modestly. Canada's election was a rebuke of U.S. president Donald Trump's brutal trade policies and his comments about annexing Canada to become the 51st State in the United States. Tim Ghriskey is a senior portfolio strategist with Ingalls & Snyder, based in New York. "They will be very strict on trade issues. They're probably insulted that Trump wants them to be the 51st State. Ghriskey said, "I hope the rhetoric coming out of the White House subsides." U.S. Treasury secretary Scott Bessent stated on Tuesday that tariff talks were ongoing. He said that Beijing was responsible for the U.S. China trade negotiations and that he did not expect any disruptions to supply chains as a result of these disputes. According to two sources with knowledge of the situation, China has excluded ethane imports from its 125% tariff, the latest indication that the tariff situation remains fluid. This week, the first-quarter reporting period is in full swing. This week, four of the "Magnificent 7" artificial intelligence megacap stocks are expected to release their results: Meta Platforms (Microsoft), Apple, and Amazon.com. Consumer confidence has deteriorated more than expected, and the number of job openings is down 3.9%. Ghriskey stated that "consumer confidence has also dropped significantly." He added, "I think there's a lot of nervousness in the economy because of these trade issues and tariff issues." "There will be some pain at the consumer level." The Dow Jones Industrial Average rose by 225.92, or 0.56 percent, to 40.453.51. The S&P 500 gained 10.79, or 0.19 percent, to 5,539.54. And the Nasdaq Composite increased by 13.18, or 0.07 percent, to 17.378.36. Investors pared back initial gains in European shares as they scrutinized corporate earnings and kept an eye on tariff developments. The MSCI index of global stocks rose by 2.26 points or 0.27% to 829.47. The pan-European STOXX 600 Index rose 0.38% while Europe's broad FTSEurofirst 300 Index rose 8.18 points or 0.39%. Emerging market stocks increased 4.72 points or 0.43% to 1,107.28. MSCI's broadest Asia-Pacific share index outside Japan closed up by 0.34%, at 575.73. Japan's Nikkei gained 134.25, or 0.38% points, to 35,839.99. The dollar rose after Bessent made his comments about progress in trade negotiations, but it was still on track to record its largest two-month drop in over 20 years. The Canadian loonie weakened against the dollar after the Liberals of Canadian Prime Minister Mark Carney retained power following the election on Monday. This was fueled by the backlash from Trump's tariffs, and his comments about Canada becoming the 51st State. The dollar index (which measures the greenback versus a basket including the yen, the euro and other currencies) rose by 0.12%, to 99.16. However, the euro fell by 0.21%, at $1.1397. The dollar gained 0.11% against the Japanese yen to 142.18. The dollar fell 0.31%, to $1.3397. The Mexican peso rose 0.03% against the dollar to 19.586. The Canadian dollar fell 0.22% against the greenback, to C$1.39 a dollar. The yields on U.S. Treasury 10-year bonds fell for the sixth consecutive day, reaching a new three-week-low following weaker than expected economic data. The yield on the benchmark U.S. 10 year notes dropped 3.7 basis points from 4.216% to 4.179% late on Monday. The 30-year bond rate fell 2.9 basis point to 4.6636%, from 4.693% at the end of Monday. The yield on the 2-year bond, which is usually in line with expectations of interest rates for the Federal Reserve (Federal Reserve), fell by 2.5 basis points, to 3.66% from 3.685% at late Monday. Oil prices fell as Trump's multi-fronted trade war increased the probability of a global recession, and fuelled fears that demand would be dampened. U.S. crude dropped 1.93%, to $60.85 per barrel. Brent was down to $64.54 a barrel on the same day. The dollar gained in value, while gold prices declined. Spot gold dropped 0.9% to $3.311.29 an ounce. U.S. Gold Futures dropped 0.69% to an ounce of $3,310.00.
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Companies count the costs of blackouts in Spain and Portugal
Business associations and companies started counting the costs as factories, hotels, and stores in Spain and Portugal slowly returned to normal after the massive blackout of the previous day. CEOE, the main Spanish business lobby, estimated that the outage could shave off 1.6 billion euro ($1.82 billion) or 0.1% of gross domestic product. They noted it would take a week or longer for oil refineries to fully resume their operations, and some industrial ovens were damaged. The meat industry estimates losses up to 190 millions of euros due to the loss of power in fridges, among other things. In some parts of Spain, the blackout lasted for more than 12 hour. The sector's association ANGED reported that most food stores operated normally on Tuesday. However, they were still assessing the amount of produce that had gone bad, or how much money had been lost due to card payment systems going offline and ATMs being out of service. Not everyone had the cash to purchase water, canned foods, flashlights and radios. Bank of Spain has confirmed that payments via card have resumed and ATMs are working. Volkswagen's Navarra plant, which employs 4,600 workers, only resumed production at 2.30 p.m. Tuesday, as the industry was facing some of its biggest challenges. A company spokesperson confirmed that the factory had lost about 1,400 vehicles since Monday. Volkswagen's Spanish SEAT brand also reported that production at its Barcelona factory, where 14,000 workers work, had not been fully restored after the power was restored at 1 am local time. Other sectors such as Spain’s vital tourism industry were mostly unaffected. The telecommunications failure has created a "very complex situation", said Jorge Marichal, the chairman of Spain's Hotel Association CEHAT. Many guests sought refuge in hotels. He said that we had a good occupancy rate and were able to assist some public agencies who requested help in accommodating people. Some companies, hoping for a quick fix to the blackout kept their staff on site for hours. Others, like industrial manufacturer Thune Eureka, in northern Spain sent workers home earlier during the blackout. The company's president, Adrian Garcia Aranyos said that his head of IT was a former power grid supervisor in Venezuela, and this had given them an unexpected advantage. "He knew that it would take at least eight... He said that we made a quick decision because of him after an hour without power. $1 = 0.8771 Euros (Reporting and Editing by Andrei Khalip, Barbara Lewis, Aislinn laing, Jesus Aguado)
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Grangemouth Oil Refinery in Scotland ends crude processing and redundancies begin
The operator of Scotland's sole oil refinery, Petroineos, said in a press release that the facility has ceased processing crude oil as of Tuesday. It is now converting to an import terminal. Petroineos (a joint venture between Ineos founded by British billionaire Jim Ratcliffe and Chinese state-owned PetroChina) confirmed in September the Grangemouth refinery will cease production in the second half of 2025. Iain Hardie is the region head for legal and external affairs of Petroineos. He said that the company had invested 67.06 millions pounds (50 million pounds) to convert to an import terminal. Petroineos announced that it would close the refinery due to losses of around $5000 per day. It also said the refinery was no longer competitive with other sites, such as those in Africa, the Middle East and Asia. Grangemouth is Britain's oldest refinery. Closures are being made in Europe due to a decline in refining capacity as companies look to convert or close oil refining assets. Shell will also close its German Wesseling Refinery in this year. Unite has announced that the first round of layoffs at Grangemouth is underway. Petroineos reported in September that as part of the closure of Grangemouth, the number employees was expected to drop from just 75 to 475. Sharon Graham, Unite's general secretary, said: "Highly-skilled and well-paid workers were thrown onto an industrial trash heap." Hardie, from Petroineos, said: "Our colleagues showed incredible commitment, dignity, and resilience throughout the months of uncertainty about the future of this plant, during the consultation period, the phased shutdown, and the beginning of refinery decommissioning." Unite, however, said that the UK government did not do enough in the short-term to protect jobs. The Grangemouth refinery was primarily responsible for processing crude oil from the North Sea. It is connected to the Forties Pipeline System. According to Kpler, a global provider of real-time analytics and data, it also imports crude oil by sea to the Finnart Terminal, where the last shipment from Algeria arrived on 7 March.
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John Paulson, a billionaire investor, believes that gold will be near $5,000 in 2028.
In an interview, John Paulson, a billionaire investor who has reaffirmed his commitment to U.S. mine projects, said that central bank gold purchases and global trade tensions will likely push bullion to prices near $5,000 per ounce by the year 2028. Gold reached a record-high just above $3.500 last week, and banks are now increasing their estimates. Deutsche Bank, for example, believes that bullion will reach $3,700 per ounce next year. Paulson, who is already the largest shareholder of Idaho gold and antimony developer Perpetua Resources in Alaska, bought last week a 40% stake from Barrick in NovaGold’s Donlin project. When asked where he expected bullion to go, Paulson quoted a recent estimate that he received for levels in the "high $4,000" range within three years. "It is a well-informed forecast." Paulson stated, "I think that number is reasonable." "Central banks and the public are looking to invest their money in more stable sources... "I think that gold will continue to increase in importance around the globe," he said. The New York-based investment cited the Western confiscation after Moscow invaded Ukraine of Russia's holdings of foreign reserves as a catalyst to get central banks around the world - and especially China - to buy gold. Paulson stated that "when the war began, (Russian) kept their gold reserves, which were safe, but their cash – the paper reserve – was confiscated." "So, that made other central banks wake up and ask... "What happens if there is a conflict with America? "Would the U.S. be able to keep our treasuries and our savings disappear?" Paulson stated. He said that the global trade uncertainty, which is fueled by Washington's new tariffs in part, further supports gold. The best option if you lose faith in the dollar (U.S.), is to use gold as a currency reserve, said Paulson. He was being considered for a position in Donald Trump's cabinet during his second term. Paulson refused to disclose details of his conversations with Trump. However, he said that the president was "very pro-America first, the golden age of America and bringing manufacturing, mining and other industries back to America." Paulson has been investing in gold for many years and has said that he is not interested in expanding his investments into other metals or copper. He said that other minerals were a different world and they are not where he wants to focus his efforts. Paulson, the largest shareholder of Perpetua in Idaho, has been receiving support from Trump's White House. Perpetua received its federal mining license in January and is now applying for funding through the U.S. Export-Import Bank. Perpetua’s gold production has been seen as a financial boost to the mine’s antimony production, and ensures a domestic supply for the Pentagon of the metal used in bullets and weaponry. China has banned antimony exports from the U.S. Perpetua works with Sunshine Silver & Refining, backed by Thomas Kaplan’s Electrum Group, to build an antimony refining facility. Sunshine has permits to build a refinery that would meet 40% of the country's antimony needs. Kaplan said that the process of refinement was well established. "We are just upgrading it, and putting it into production." Paulson stated that the Donlin Project in Alaska has been granted federal permits. Paulson also said operating costs should be around $1,000 per ounce, which is far below the current gold price. Paulson and Electrum have also invested in International Tower Hill which is developing a gold mine in Alaska, as well Trilogy Metals which aims at developing projects in Alaska's Ambler District.
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Ecolab confirms its annual profit forecast despite tariffs and a weak quarter
Ecolab, a water solutions company, kept its annual profit outlook unchanged on Tuesday in spite of tariff uncertainty and lower first-quarter revenues and profits. This sent its shares up 1.7%. The company that offers water services such as cleaning, sanitization and cooling to many industries still expects to see earnings grow between 12% and 15% this year. Ecolab uses its diverse supply chain and its 'local-for-local' production model, as well as a recently announced surcharge of 5% on all products and services sold in the U.S., to minimize tariff impact. The tariffs imposed by President Donald Trump on his trade partners and the retaliatory measures taken by other countries, such as China have raised concerns that raw materials and equipment prices for companies like Ecolab could increase. The company's sales for the first quarter fell by 1.5% compared to a year earlier, reaching $3.69 billion. This was due to the sale of its surgery unit announced in 2013 and the weak demand from customers. The company reported a profit of 402.5 million dollars, or 1.41 cents per share for the quarter ending March 31. This compares to $412.1 millions, or 1.43 cents per share a year earlier. Saint Paul, Minnesota based company also predicted current quarter adjusted profits between $1.84 and $1.94 each share. According to data compiled from LSEG, analysts were expecting $1.90 a share. (Reporting and editing by Sahal Muhammad in Bengaluru, Katha Kalia from Bengaluru)
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S&P Global believes that the US and China can breathe easier in their trade war with rivals S&P Global.
S&P Global’s top sovereign analyst said that a trade conflict is unlikely to have a significant impact on the credit ratings of China and the United States. Instead, damage will likely be concentrated in poorer countries or those who are already under downgrade warnings. S&P confirmed its "stable outlook" on its AA+ U.S. government credit rating, days before Donald Trump announced his massive round of trade tariffs for the global market in early April. The U.S. government's debt, which is close to 100% of GDP and the fiscal deficit that runs at 6-7% of GDP are its main credit weaknesses. It also highlighted the uncertainty surrounding Trump's policies and trade deals. Trump's tariffs have led to a reduction in global growth predictions. S&P managing Director Roberto Sifon Arevalo said that most major economies ratings should be able, for the time being, to handle the pressures. "At first, there was a flashback of the COVID period and the thought that this is another global crisis." When you look at the bigger picture, and the transmission channels that are available, it remains a question: Will this be enough to significantly change the creditworthiness of sovereigns worldwide? This does not mean, however, that the ratings for negative outlooks (the rating agency's term for warnings of a downgrade) will not go down. Or that the outlooks will not be lowered as they have already been in Slovakia and Egypt. More importantly, there shouldn't really be any major surprises. According to an S&P model based on credit default swap data, investors are currently pricing a five-notch downgrade for the U.S. and a three-notch cut to China's score of A+. S&P's U.S. credit rating hasn't been lowered since 2011, when it was downgraded from triple-A. China hasn’t seen a cut since 2017, but Fitch, its counterpart, cut Beijing a notch after Trump’s tariffs announcement. Sifon Arevalo stated that "for China and the U.S., there is room (for ratings)." He said that it is not the length of time the tariffs will remain in place that will determine how the two countries are rated, but there must be "some sort of resolution" (on tariffs) within the next few months. In China, it was about how much stimulus the country would inject to offset tariffs. Big Questions S&P is concerned more about possible knock-on effects such as a prolonged slump in commodity prices, such as metals and oil. Many countries depend on these commodities for a large part of their income. Sifon Arevalo stated that "if you have a large swing in commodity price, it has a much greater impact on ratings." Oil prices are 20% lower now than in mid-January. If Trump follows through with his plans to impose tariffs of 20% on EU countries, European ratings may also be put under further pressure. He welcomed Germany's plans to spend half a billion euros on defence and infrastructure, but warned that the current trade problems could further erode the already weak economy of the EU. Sifon Arevalo stated that "if these trade uncertainties are not resolved soon, there will be serious fiscal implications across the continent." You need growth to support fiscal consolidation. Tariffs are not helpful.
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S&P Global believes that the US and China can breathe easier in their trade war with rivals S&P Global.
S&P Global’s top sovereign analyst said that a trade conflict is unlikely to have a significant impact on the credit ratings of China and the United States. Instead, damage will likely be concentrated in poorer countries or those who are already under downgrade warnings. S&P confirmed its "stable outlook" on its AA+ U.S. government credit rating days prior to President Donald Trump's announcement of his global trade tariffs. The U.S. government's debt, which is close to 100% of GDP and the fiscal deficit that runs at 6-7% of GDP are its main credit weaknesses. It also highlighted the uncertainty surrounding Trump's policies and trade deals. Trump's tariffs have led to a reduction in global growth predictions. S&P managing Director Roberto Sifon Arevalo said that most major economies ratings should be able, for the time being, to weather these strains. "At first, there was a flashback of the COVID period and the thought that this is another global crisis." When you look at the bigger picture, and the transmission channels that are available, it remains a question: Will this be enough to significantly change the creditworthiness of sovereigns worldwide? This does not mean, however, that the ratings for negative outlooks (the rating agency's term for warnings of a downgrade) will not go down. Or that the outlooks will not be lowered as they have already been in Slovakia and Egypt. More importantly, there shouldn't really be any major surprises. According to an S&P model based on credit default swap data, investors are currently valuing a five-notch downgrade for the U.S. and a three-notch cut for China's A+ rating. S&P's U.S. credit rating hasn't been lowered since 2011, when it was downgraded from triple-A. China hasn’t seen a cut since 2017, but Fitch, its counterpart, cut Beijing a notch after Trump’s tariff announcement. Sifon Arevalo stated that "for China and the U.S., there is room (for ratings)." He said that it is not the length of time the tariffs will remain in place that will determine how the two countries are rated, but there must be "some sort of resolution" (on tariffs) within the next few months. In China, it was about how much stimulus the country would inject to offset tariffs. Big Questions S&P is concerned more about possible knock-on effects such as a prolonged slump in commodity prices, such as metals and oil. Many countries depend on these commodities for a large part of their income. Sifon Arevalo stated that "if you have a large swing in commodity price, it has a much greater impact on ratings." Oil prices are 20% lower now than in mid-January. If Trump follows through with his plans to impose tariffs of 20% on EU countries, European ratings may also be put under further pressure. He welcomed Germany's plans to spend half a billion euros on defence and infrastructure, but warned that the current trade problems could further erode the already weak economy of the EU. Sifon Arevalo stated that "if these trade uncertainties are not resolved soon, there will be serious fiscal implications across the continent." You need growth to support fiscal consolidation. Tariffs are not a good idea. (Reporting and editing by Hugh Lawson; Marc Jones)
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Battery industry: $100 billion US investment depends on Washington support
The manufacturers and developers of U.S. Energy Storage Projects said that their industry would invest $100 billion in this decade to create an entirely domestic battery supply chain. However, they warned that the goal is contingent upon Washington's support. The American Clean Power Association is a trade association that represents energy storage firms. Its members aim to reduce the sector's dependence on China, who currently supplies most of the U.S. battery supply. The storage projects are therefore likely to be severely affected by the decision of President Donald Trump to impose 145% tariffs on Chinese imports. The industry wants a nuanced approach in order to encourage domestic production. Jason Grumet, CEO of ACP, said in a press conference with reporters before the announcement that "China stole our entire supply chain for over a decade. We're not going get it back within 10 weeks." If the administration begins to see batteries as an important national security technology, then we will move away from broad-based reciprocal duties, which is a blunt way of grabbing attention, and into a strategic conversation. Grid storage projects - mainly large lithium-ion battery systems – can help wind and solar resources by storing energy when the sun shines and the wind blows so it can be later used. According to the U.S. Energy Information Administration, the U.S. utility scale battery capacity increased by 66% in the past year. It was only second to solar for the addition of capacity to the grids. The clean-energy industry has been on alert ever since Trump assumed office in January. He promised to increase fossil fuels, undo climate and renewable energy policies set by his predecessor, Joe Biden, and boost the use of fossil fuels. ACP stated that the $100 billion investment would create 350,000 new jobs, and include between $10 to $15 billion of active projects. These include a Tesla cell factory in Sparks Nevada, a Fluence plant in Tennessee, LG’s Holland, Michigan plant, and an Weirton West Virginia facility by the startup Form Energy. (Reporting and editing by Marguerita Choy)
Finland's Fortum rejects a return to Russia and continues to pursue Uniper assets
Fortum, the Finnish utility, has announced that it will not be returning to Russia, but is still interested in purchasing the Nordic assets from its former German subsidiary Uniper. This announcement came after Fortum beat market expectations with its first-quarter profit.
Since the Russian authorities seized Fortum and Uniper's Russian assets in response to Western sanctions for Russia's 2022 invasion of Ukraine, they have been managed by executives from Moscow.
Markus Rauramo, Fortum's CEO, ruled out any return to Russia if the war were to end. He also said that the arbitration process regarding the Russian seizure was still ongoing. The company is also directly claiming the unpaid loans and interests from its former Russia division.
He said that if the control of the shares could be obtained, they would be able to be sold.
Fortum lost control of Uniper in the 2022 European energy crisis sparked by the invasion of Ukraine when the German government bailed it out. Berlin now plans to sell it.
"Previously, the German Government was looking at an IPO for Uniper as they needed to reduce their shares to under 25% by 2028. Now they've commissioned advisors to examine the possibility of a bilateral sales," Rauramo explained.
Fortum, a company that produces electricity and heat from hydroelectric and nuclear power plants in the Nordics, Poland and other countries, still holds a first right offer on Uniper's Nordic assets.
Rauramo stated that "we continue to be interested" in nuclear, hydro and renewable assets. But for all these, the logic is the same - we examine our balance sheet and our return target.
Rauramo also mentioned Poland as an additional potential growth market.
He said that Poland is one of Europe's largest and fastest-growing markets, but it must decarbonise.
Fortum's first-quarter comparable operating profits fell less than expected to 462 millions euros ($526million) from 530 millions a year ago, thanks to an improved performance in the power generation sector. In a poll commissioned by the company, 14 analysts predicted an average of 364 million euro.
Nordic power prices were lower in the first three months of this year due to a milder winter.
Fortum has raised its forecast for 2025 for the optimisation premium that is included in the achieved electricity price for its portfolio of generation to 7 to 9, euros per megawatt hour from 6-8, euros per MWh.
In Helsinki, its shares rose 4% at midday.
(source: Reuters)