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Wall Street cheers US job growth and chipmaker earnings by ignoring the high price of oil
Investors sent U.S. stock prices higher on Friday as new data showed strong job growth in the U.S., even though oil prices continued to rise due to ongoing fighting near Strait of Hormuz. The Dow Jones Industrial Average grew by 0.21%. The S&P 500 added 0.5% and the Nasdaq Composite rose 0.8%. Microchip Technology, which had forecasted first-quarter revenues above expectations, rose 1.4%. Qualcomm jumped about 4% while Nvidia grew 2%. The oil prices retreated from their early gains, after a new round of fighting in the Strait of Hormuz raised concerns about the ceasefire agreement between Iran and the United States. Benchmark Brent crude futures last moved a little higher to $100.24 per barrel. U.S. employment increased in April more than anticipated, while the unemployment rate remained at 4,3%. This indicates that labor markets are resilient and reinforces expectations that the Federal Reserve will leave interest rates unchanged. Ellen Zentner is the Chief Economic Strategist at Morgan Stanley Wealth Management. She said, "More strong jobs data leaves Fed where it has been for some time - watching and awaiting, focused on its?inflation mandate." Rate cuts are not on the horizon in the near future, but the lack of inflationary concerns in the report today should quieten some of the talk about a possible hike. MIDDLE-EAST CLASHES The U.S., Iran and UAE exchanged fire on the Gulf. This was a test of a ceasefire that had been in place for a month. Investors are left uncertain as both sides downplayed the situation. The market is taking advantage of every opportunity to put a quick stop to the war, said Jan von Gerich, Nordea's chief analyst. "But it appears unlikely that there will be an agreement. I think that there will be more disruptions along the Strait of Hormuz for a long time, and they won't be resolved anytime soon. European stocks fell. The STOXX 600 index for the entire continent was down 0.5%. Asian equities fell from recent highs, but remained on course for a strong week, supported by the revenue and spending plans of U.S. AI Hyperscalers that have boosted chipmakers in the region. MSCI's broadest Asian share index outside Japan dropped 0.8%. However, South Korea's KOSPI rose 0.1% and its weekly gain reached more than 135% - the largest since '2008 - thanks to rallies at Samsung and SK Hynix. This week, Taiwan's benchmark index rose 7% and Japan's Nikkei gained 5.4%. A DOLLAR INCH LOWER Sources familiar with the situation said that the dollar was edging lower, and headed for a second consecutive weekly decline. The yen, however, remained the focus of attention after Japan intervened in the currency markets to stop its slide in early May. The dollar last fell 0.26%, to 156.5 yen. It was heading for a second consecutive weekly decline against Japan's currency. The dollar's gains above 155 yen have been difficult to maintain after suspected interventions totaling nearly $70 billion in the last week. The euro was last trading at $1.178 while the Chinese yuan, Asia's best-performing currency, is hovering around 6.8 per dollar. This is close to its highest since 2023. The British pound and UK government bonds rose on Friday, after British Prime Minister Keir starmer announced that he would not be resigning despite the devastating losses suffered by his Labour Party during local elections. TARIFFS The U.S. Trade Court ruled that President Donald Trump’s?latest 10% global temporary duties are unjustified by a '1970s trade act. Analysts expect an appeal to be filed quickly and that the overall impact on U.S. levy will be minimal. Treasury yields rose in tandem with crude oil prices on Thursday, as traders fretted about inflation. However, they did not change much on Friday. The benchmark 10-year yield was 4.354% and down 4 basis points. Bitcoin is heading towards its sixth consecutive weekly gain at $79660. (Reporting from Lawrence Delevingne, Samuel Indyk and Tom Westbrook respectively in Boston, London and Singapore. Elaine Hardcastle and Mark Potter edited the story. Topra Chopra was also involved in editing.
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Rubio: US Church ties can withstand Trump criticizing Pope Leo
Marco Rubio, Secretary of State on Friday, said that the United States could have a productive relationship with the Catholic Church despite tensions over President Donald Trump's repeated criticisms of Pope Leo. Rubio visited the Vatican Thursday and told reporters that the meeting had been "very positive" before departing Rome. Rubio, when asked about Trump's criticism of Leo for his comments about the Iran War and other issues, said that Trump acts to the benefit of the U.S. Rubio said that Trump acts in the best interest?of the U.S. and "will always speak clearly about how he feels about the?U.S. Rubio stated, "I believe we can do that and continue to have a productive and fruitful relationship with the Church because it also plays an important part in the world." Rubio stated that the U.S. was prepared to give more humanitarian assistance to Cuba which is facing an energy crisis as the U.S. has blocked most oil shipments into the country. Washington issued sanctions on Thursday against a Cuban mining joint venture and a military-controlled conglomerate to pressure the communist leaders of the island to undertake reforms. Rubio stated that the U.S. had provided $6 million to Cubans in humanitarian aid through the "Church" and offered $100 million to 'the government of Cuba, but it refused to do so. (Reporting and editing by Alis Williams, Barbara Lewis and Barbara Lewis; Susan Heavey, Daphne Psaledakis and Simon Lewis).
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Satellite images show a possible oil spill near Iran's Kharg Island Export Hub
Satellite images this week showed a suspected oil spill covering dozens square kilometers of sea near Iran's main oil hub, Kharg Island. Images from Copernicus Sentinel-1 and Sentinel-2 satellites on May 6-8 showed a grey-and-white slick covering the waters west of the island's 8-kilometre (five-mile) length. Leon Moreland of the Conflict and Environment Observatory said that "the slick appeared visually consistent with oil." He estimated that it covered an area of about 45 square kilometers. Louis Goddard of 'consultancy Data Desk', which focuses primarily on commodities and climate, also agreed that it was likely an oil slick. He said the images were the largest since the start of the U.S./Israel war against Iran, 70 days ago. Requests for comment about the images were not immediately responded to by the U.S. Military and Iran's Mission to the United Nations at Geneva. Moreland said that the cause and origin of the spill are unknown at this time, adding that images taken on May 8 did not show any evidence of active spills. Kharg Island is the hub of 90% of Iran's crude oil exports. Most of it is headed for China. The U.S.?Navy is blocking Iran's ports to?stop Tehran's oil tankers from entering or exiting. Meanwhile, U.S. forces and Iranian forces are fighting in the Gulf. The war in the Gulf has also 'trapped hundreds of ships and caused the biggest disruption of crude oil supply worldwide, along with affecting global supplies of oil and gas products.
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Gold gains on US-Iran agreement, jobs data and gold prices
Gold extended gains on Friday following a stronger-than-expected ?jobs report, with prices ?also heading for a weekly ?rise ?as optimism over a potential end to the Iran conflict helped ease concerns about inflation and elevated interest rates. As of 1322 GMT, spot gold was up 0.8%, at $4,723.28 an ounce. Bullion is up 2.4% this week. U.S. Gold Futures increased 0.5% to $4733.00. Data showed that U.S. Employment increased more than anticipated in April, while the unemployment rate held steady at 4.3%. This indicates a resilient labor market. "Traditionally, we would think that a stronger-than-expected jobs number ?would strengthen the dollar and apply some pressure to gold. We did not see this happen today, said David Meger of High Ridge Futures, the director of metals. Gold is trading more like a risky asset than a safe haven at this time. Gold's rebound is linked to the prospect of de-escalation with Iran. With energy prices falling, we are seeing the likelihood for Fed rate reductions increase in the future. Due to its non-yielding characteristics, gold, which is typically seen as a haven in times of global turmoil, is under pressure due to rising interest rates. According to CME FedWatch, the market is now expecting a rate increase of 14% this year. This is down from 22% the previous day. U.S. forces and Iranian forces clashed and renewed attacks on the United Arab Emirates in the Gulf. President Donald Trump, however, said that a ceasefire still held despite this flare-up. Gold demand in India this week was muted as price recovery caused?potential purchasers to postpone their purchases. Meanwhile, premiums on China remained stable due to the safe-haven demand. Silver spot rose by 3.1%, to $80.88 per ounce. Platinum gained 0.2%, to $2,026.80. Both are headed for weekly gains. Palladium fell 0.3% to $1,476.18, but was down almost 3% on the week. Ashitha Shivprasad reports from Bengaluru.
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Russell: Exports of refined fuels from Asia to the US plummet after the closure of Hormuz
The impact of the 'crisis' on the physical fuel markets has worsened. While crude oil futures prices have fluctuated in line with headlines regarding the conflict between the United States, and Iran. Brent contracts fell 7.8% to close at $101.27 per barrel on Wednesday, despite the fact that a sustained and full reopening of the 'Strait of Hormuz is still a long time away. The United States and Israel's February 28th attack on Iran has led to a reduction in the volume of refined products shipped throughout Asia. The Strait of Hormuz is the main energy-consuming region in the world and the destination of about 80% of the pre-war cargoes. In April, the combined export volume of these three fuel types was about 3 million barrels a day (bpd), below the average in the three months before the start the conflict. According to commodity analysts Kpler, jet fuel is the part of the barrel that has been most affected. Asia's fuel exports fell to 596,000 BPD in April from 1.54 Million BPD in the three-month period prior to the beginning of the war. The Kpler data for April was the lowest since 2017. It shows that flow levels are about one-third lower than pre-conflict. Most of Asia's jet fuel exports are destined for other Asian countries who import it, while smaller quantities go to Africa, Europe, and North America. India's jet fuel exports fell to 48,600 barrels per day (bpd) in April, from 141,000 bpd before the war, and China's to 135,000 from 308,000 bpd. According to Kpler, the United Arab Emirates shipped zero jet fuel during the month of April, compared to an average of 106,000 barrels per day (bpd) in the three months preceding the war. Singapore assessment prices reflect the shortage of jet fuel cargoes. The price of oil ended at $158.91 per barrel on Wednesday. This is up 70% over the $93.45 it closed on the 27th February, the day before Israel and the U.S. launched their aerial attack against Iran. SUPPLY SQUEEZE The price of gasoil, the building block for diesel, ended at $141.30 per barrel on Wednesday. This is up by 55% compared to the level before the war. Kpler reports that Asia's transport fuel exports dropped to a 9-year low in April of 2,22 million bpd, down from a 3.54 million average in the three month period before the start the the?Iran War. Exports from Japan fell to 32,600 BPD in April, from 148,600 BPD before the conflict. South Korea's exports dropped from 507,000 to?451,000 BPD, India's to 371,000 from 494,000, and China's to 22,000 from 126 300. The same is true for gasoline. Asia's exports fell to 1,59 million bpd from an average of 2,28 million bpd during the three months before the Iran War. South Korea's shipments fell to 181,300 bpd (from pre-war levels) while China's decreased to 47,000 from 116,000. Data shows how quickly refiners in Asia have struggled to secure enough crude to keep refineries running. As commercial and strategic stocks are depleted, the longer the Strait of Hormuz is closed to most vessels the greater the likelihood that crude shortages will be in Asia. You like this column? Check out Open Interest, your new essential source of global financial commentary. ROI provides data-driven, thought-provoking analysis on everything from soybeans to swap rates. The markets are changing faster than ever. ROI can help you keep up. Follow ROI on LinkedIn, X. These are the views of the columnist, an author for.
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Ukraine considers sending security experts in Baltic States amid drone incidents
The 'foreign minister' of Ukraine said on Friday that the country is considering sending a team to help improve air security in the Baltic States after two drones, allegedly from Ukraine, crashed into Latvia. NATO members Latvia and Lithuania, which border Russia have reported several incidents of this nature in the last few months, as Ukraine intensified its 'long-range attacks' against their enemy. Andrii Sybiha said that if it is confirmed that the drones were Ukrainian and were intentionally knocked from their course by Russia's electronic war, we will sincerely apologize to our Latvian Friends. He said that "we are also looking at the possibility of sending Ukrainian experts to directly help?strengthen airspace security for our friends in order to prevent any incidents," Sybiha said that Ukraine is trying to minimize the chance of such incidents recurring. Police and firefighters in Latvia said that four empty oil tanks had been damaged by the incident in Rezekne on Thursday, which occurred about 40 km (25 miles) from Russia's border. In the wake of these incidents, Latvia and Lithuania called on NATO to boost air defences. (Reporting by Yuliia Dysa; Editing by Alexandra Hudson)
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'We Are American': Acerinox is considering a NYSE listing of US arms
Acerinox's CEO on Friday left a 'door open' for a potential?New York IPO of its U.S. operations, which make up?the majority of the Spanish steelmaker’s earnings. Acerinox, in a Bloomberg News interview last year, floated the idea of listing its U.S. businesses locally after Haynes International is integrated. The acquisition was completed in late 2024. "We can't not consider it," CEO ?Bernardo Velazquez told . "While U.S. valuations and U.S. liquidities remain far higher than those in Spain I believe that we are obliged?to explore all?possibilities." Acerinox will maintain its majority stake in the U.S. company if it proceeds with an IPO, said Miguel Ferrandis, the Chief Corporate Officer, during a call after earnings. He added that the timing for such a move has not been decided. Velazquez said that Acerinox "was not at all concerned" about possible U.S. retaliation against Spain because it refused to allow the U.S. military to use bases in Iran. "The only people who should be concerned about this are those that have to export into the United States." We are Americans, we're regarded as Americans, and we're?fully integrated," said Velazquez, referring the U.S. part of the company, which is a member of U.S. trade associations. Analysts and academics are in agreement that it would be difficult for the U.S. government to impose an embargo against Spain. However, the Trump administration has not yet indicated how they might retaliate. UBS analysts said in a note from March that Acerinox is one of the Spanish companies with the most exposure to the U.S. (Reporting from Gdansk by Javi Larranaga, editing by Milla Nissi-Prussak).
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US hybrid car sales are on the rise, as is gas prices
According to new industry data and dealers, many American car buyers are turning to hybrid vehicles in order to offset the recent spike in gas prices due to the Iran War. Motor Intelligence, a research firm, says that hybrid sales in the U.S. have risen 37% over the past two months. This was a faster growth than the general car market's 15% increase in sales during that time period. According to the American Automobile Association, fully electric cars did not attract the same level consumer interest even though U.S. gas prices reached $4 in late April and hit a four-year peak. Motor Intelligence data shows that U.S. EV sales have risen just 11% over the past two months, below the broader pace of sales. EV sales are still far below what they were one year ago. This is due to the fact that a $7500 federal tax credit expired last fall. The relative apathy of Americans towards EVs is a stark contrast to the trend in Europe where sales of electric vehicles are booming despite higher fuel prices. In Europe, there are more affordable EVs for sale because the tailpipe emissions rules are stricter than in the U.S. In the United Kingdom EV sales jumped by 79% in the two months following the Iran conflict, a much greater increase than on the broader market. Germany's fully electric car sales also outpaced industry growth, increasing 39% during that time period. HYBRIDS ARE EASIER FOR SOME SHOPPERS TO HOLD Analysts and dealers have pointed out several reasons for why hybrids, which are vehicles that use a battery and an electric motor in conjunction with a gas engine to save fuel, have become the preferred choice of U.S. consumers looking for a "green" car. Hybrids tend to be less expensive than EVs and offer more options. Owners don't have to change their routines to adapt to a new technology, such as plugging a car in at night. Kevin Roberts said that hybrids were popular even before the gas prices began to rise. He is director of economics and market intelligence for online marketplace CarGurus. "Higher gasoline prices only kind of increased this interest." Data from digital shopping shows that consumers are increasingly interested in hybrids and electric vehicles. In April, CarGurus saw a 14% increase in hybrid searches, compared to 12% the month before. Searches for electric vehicles (EVs) increased from 3.4% to 5% in April. Brad Sowers is a car dealer in St. Louis who sells Kias, Stellantis, and General Motors. Hybrids made up 35% of sales at Brad Sowers'?Kia dealer in April. This is an increase from 30% in March. Toyota Motors has benefitted from the increasing popularity of hybrids. The Prius, which was introduced in the late 90s, pioneered this technology. Toyota Motor has been focusing on hybrids for two of its best-selling models, the RAV4 and Camry. Toyota's U.S. electrified vehicle sales have grown 34% in the 'two months following the Middle East conflict. This is mainly due to the 'growing hybrid business and a small number of fully electric vehicles. Toyota's U.S. overall sales increased by 23% during that time period. TRUCKS STILL ROLL OUT EVEN WITH HIGH GAS PRICES Some car buyers have not been affected by the rise in fuel costs. According to CatalystIQ, a company that sells data to dealerships, the number of large trucks purchased in March and April was up 20% from before the war. Todd Szott is a car dealership in Michigan with Toyota, Ford Motor, and Stellantis. He said that customers are aware of gas prices but more interested in the deals offered by carmakers. Gas-powered cars are often the ones that offer the largest discounts. He said, "We are still selling a lot of pickup trucks."
Amazon's Chile datacenter moves forward after residents win environmental challenge
Patricio Hernández lives in the north of Chile's capital, Santiago. He and his neighbors fear that a massive Amazon data center could destroy their area. He said that the hill was very important for the community. It is a green area, a place to relax and for community.
He and other local residents attempted to block the construction of the data center. They argued that the permit failed to take into consideration the possibility of building a high voltage power line, which they claimed would be needed to supply the site.
They lost their case. Early April, environmental authorities ruled that the data center was allowed to proceed. They said any plans for a powerline should be evaluated separately.
Amazon Web Services stated that it is aiming to have the data centers consume as little energy and water as possible and that its plan has met environmental requirements.
Construction of data centers has exploded worldwide due to the growing demand for physical infrastructure for computer processing, artificial intelligence and data storage. Data centers are also a source of opposition due to concerns that they could be a drain on resources and cause noise pollution.
Rafael Mattje, AWS Southern Cone's technology chief, said from New Zealand: "Our approach was to design the infrastructure with an emphasis on resource efficiency. We incorporated technologies that minimize energy and water usage."
Last year, the branch of Jeff Bezos’ tech giant that is responsible for data centres announced a large expansion plan in Santiago.
AWS announced that it would invest $4 billion in Chile over the next 15 years in order to build, maintain and operate infrastructure. This will make Chile its third largest hub in Latin America, after Brazil's Sao Paulo, and central Mexico. The new president of Chile, Jose Antonio Kast has promised to reduce redtape and increase connectivity through fiber optic cables. This could make Santiago more attractive for data center developers.
"Chile is an industry magnet," said Sebastian Diaz a sustainable city expert and former advisor for Chile's National Data?Center Plan. He warned Chile and the region to balance attracting investments with protecting people and the environment from negative effects. AWS anticipates that its complex located in Santiago, about 8 km north of the center, will last for 30 years. The center will be one of over 900 AWS data centers worldwide and dozens in the Americas. The construction of the datacenter and any infrastructure related to it could have a dramatic impact on the lives of residents, according to Hernandez.
He said, "We wake every morning to a hill of green that brings us joy in the gray city." (Reporting and writing by Nicolas Cortes, Carolina Fernandez, Sarah Morland. Editing by Stephen Coates.)
(source: Reuters)