Latest News
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Wall Street Journal, July 28,
These are the top stories from?the Wall Street Journal. These stories have not been?verified and we cannot vouch for their accuracy. Johnson & Johnson, a manufacturer of babycare products, has agreed to pay $5.5 Billion to settle outstanding lawsuits alleging that the company's Talc products cause ovarian cancer. The agreement is conditional on 95% participation by the remaining claimants. Iran and Oman have worked to achieve an agreement for the safe passage of ships through the Strait of Hormuz amid a lull between fighting between the U.S. -Kuwait Petroleum signed a $16billion pipeline lease agreement with Kuwait Oil, involving the entire country's export and domestic pipelines. The investors were led by Blackstone, Brookfield, and KKR. Cracker Barrel's CEO Julie Masino has resigned from her position. She will be replaced by David Deno, former Bloomin' Brands' CEO on August 10. Ford has been awarded a Defense Department contract for the development of three truck prototypes that are based on its F-Series pickups. The Pentagon is pushing automakers to help modernize and replenish military equipment depleted from wars in the Middle East, Ukraine and elsewhere. Sazerac, the?cocktail manufacturer of BuzzBallz?, sent a letter to Brown-Forman's shareholders asking them to reconsider their previously rejected $15 billion purchase?offer. Gas cylinder manufacturer Luxfer has agreed to be acquired by Wynnchurch Capital. The company plans to continue as a privately-owned company following the acquisition. (Compiled by Bengaluru Newsroom)
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Gold falls as dollar strength weighs on gold; attention turns to Fed meeting
The gold?prices dropped on Tuesday due to a stronger dollar. Meanwhile, the markets were looking forward to the Federal Reserve’s next policy announcement for clues about the interest rate outlook. Gold spot fell by 0.7% at $4,045.89 an ounce as of 0448 GMT. It had risen as high as 1% Monday. U.S. Gold Futures for August Delivery fell 0.8% to $4 046.20. Dollars held near a month-high, making bullion priced in greenbacks more expensive for holders other currencies. Ilya Spivak is the head of global macro for finance content network Tastylive. The U.S. Federal Reserve is expected to conclude its two-day meeting of policy makers on Wednesday. The Fed is expected to keep interest rates steady at 62%. According to CME FedWatch, 38% of participants in the market expect a rate increase at least 25 basis points. The markets are pricing in a 81% chance of a hike during the September meeting of the central bank. On Monday, President Donald Trump called on the Fed?to lower interest rates. He said the U.S. would have the lowest rate of interest in the world. Trump said that on Monday, the United States was in "good talks" and that there was a possibility of a deal to end their conflict. However, he warned that if the negotiations did not succeed then strikes would be resumed. Saudi Arabia, Jordan, and Iraq reported drone attacks on Sunday, indicating that Tehran was quickly testing the pause of the U.S. campaign. Spivak said that gold will likely rise above $4,200 an ounce if the Fed meeting does not produce language that is "setting the foundation for a rate hike in September". Silver fell by 2% per ounce to $57.23, platinum dropped 0.9% to 1,605.93, and palladium was down 1.6% at $1,270.97. (Reporting and editing by Varun H. K. and Ronojoya Mazumdar in Bengaluru)
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Morning Bid Europe-Chips are jolted by a shift in momentum for AI
Tom Westbrook gives us a look at what the future holds for European and global markets. Chip stocks in Asia fell on Tuesday due to the twin threats of Chinese competition rising and questions over funding and sustainability of AI infrastructure boom. South Korea's KOSPI fell nearly 10%, tripping a circuit breaker. Japan's Nikkei dropped 4.4%. The rally has been so strong that both markets are still the leaders for the year, even though they have now reached multi-month lows. Nvidia fell 5% Monday after a Wall Street Journal article reported that the chipmaker had been in discussions to provide $250 billion worth of financing guarantees for a?OpenAI Data Centre. The report stated that the guarantee would only cover Nvidia inside the center, but that financing OpenAI chips worth up to $35 billion was also being discussed, bringing attention to the circular nature of AI build-out expenditure. Europe's chip leader was also not spared. ASML fell?8.5% following The Information's report that China had begun manufacturing its own immersion deep ultraviolet machines, which are critical to chipmaking and were long dominated exclusively by the Dutch group. Investors are wondering if China's semiconductor sector is moving beyond a catch-up phase to a genuine contender. CXMT soared to the top of China’s stock market on Monday by valuation, causing investors to worry that dominant chip manufacturers may have to share AI spoils more widely. Apple was reported to have asked the U.S. for assurances that CXMT would not be added to a blacklist. The picture of hyperscalers' spending plans will be completed by the earnings at Apple, Meta and Microsoft later this week. Oil prices fell, but that was little help to stocks, or even bonds. They held steady during Tuesday's Asia session, even though crude futures continued their losses. The markets see an approximately 38% chance of a U.S. interest rate increase this week. The following are the key developments that may influence Tuesday's markets: Consumer confidence in France and the U.S. Earnings of Mercedes-Benz (editing by Shri Navaratnam), Barclays, Man Group EssilorLuxottica Logitech Rio Tinto Kering Ford Mondelez Visa NXP Seagate Coca-cola UPS Boeing
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Copper prices fall as rate hike expectations weigh on demand
The copper prices fell on Tuesday as 'lingering bets on an interest rate increase in the U.S. threatened to dampen demand. Crude oil prices also declined as investors assessed a pause in U.S. attacks on 'Iran. By 0300 GMT, the benchmark three-month metric ton of?copper traded on London Metal Exchange had fallen 0.5% to $13,664 per metric tonne. The Shanghai Futures Exchange's most traded copper contract fell 0.14% to 104,800 Yuan ($15.484.86) per ton. The market is waiting for the U.S. Federal Reserve's meeting on Wednesday and the effect of a possible lull in the fighting between Iran and the U.S. Analysts from the?Chinese brokerage Galaxy Futures said that despite the lower crude oil price, expectations of more Federal Reserve rate increases have increased. According to CME FedWatch, 62% of market participants believe that the Fed's interest rates will remain unchanged, and 38% expect at least a 25% increase. Copper market fears that higher rates will dampen economic activity and reduce demand. Red metal prices have risen due to expectations of increased demand from AI infrastructure, electric vehicles and electrification. The jittery stock market also affected traders' appetite for risk. On Tuesday, chipmakers were the main culprits in the Asian stock market's decline. They were worried about the financing requirements of the AI boom. Galaxy Futures analysts stated that "the?market is entering a week of heavy earnings reporting, and sentiment remains cautious." Aluminium prices were down 0.35% at the LME and stable on theSHFE. Disrupted Middle East supply has caused a massive drop in stocks, as well as total stock levels at LME-registered storage warehouses. The lowest level on record since 1998. Nickel?slid 0.16%, and tin fell 1.71%. On the SHFE, nickel dropped 0.77%, tin fell 1.5% and zinc declined 0.5%.
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Gold falls as dollar strength weighs on gold; attention turns to Fed meeting
The dollar strengthened on Tuesday and gold prices fell. Markets were looking for clues about the future of interest rates in the Federal Reserve's policy announcement. Gold spot fell by 0.7% at $4,044.81 an ounce as of 0250 GMT. It had risen as high as 1% Monday. U.S. Gold Futures for August Delivery fell 0.8% to $4.045.40. Dollars are nearing a month-high, which makes greenback bullion prices more expensive for those who hold other currencies. Ilya Spivak is the head of global macro for finance content network Tastylive. The U.S. Federal Reserve is expected to conclude its two-day policy meeting on Wednesday. According to CME FedWatch, 62% of market participants believe that the Fed will keep interest rates at their current level. However, 38% expect a rate increase at least 25 basis points. The markets are pricing in a 81% chance of a hike during the September meeting of the central bank. On Monday, President Donald Trump called on the Fed lowering interest rates. He said that the U.S. would have the lowest rate of interest in the world. Trump said that on Monday, the United States was having "good discussions" with Iran. He also stated that there is a possibility of a 'deal' to resolve their conflict. However, he warned that strikes will resume if the negotiations fail. Saudi Arabia, Jordan, and Iraq reported drone attacks on Sunday, indicating that Tehran had quickly tested the pause of the U.S. campaign. Spivak said that gold will likely rise above $4,200 an ounce if the Fed meeting does not produce language that is "setting the foundation for a rate hike in September". Silver spot fell by 1.9%, to $57.30 an ounce. Platinum lost 1%, to $1605.14, and palladium dropped 1.6%, to $1271.09. (Reporting and editing by Varun H. K. and Ronojoya Mazumdar in Bengaluru)
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Australia builds first oil refinery at home in 60 years, to improve fuel security
Prime Minister Anthony Albanese announced on Tuesday that Australia will be considering building its first?oil? refinery in over 60 years. The war in the Middle East has squeezed supplies from abroad and highlighted the urgency of improving energy security. Albanese stated that the project would help to build Australia's sovereignty and resilience in the fuel sector, which could shield the country against future supply shocks. Albanese stated that if the project is deemed?feasible', Perdaman, a chemical industrial producer in Western Australia will build a new large-scale refinery. Albanese, a reporter in Western Australia's Pilbara Region, told reporters that "the war?in?the Middle East... has an impact here just like it does all over the world." Building national resilience makes Australia less susceptible to events happening around the globe. Albanese announced that his government, along with the Western Australia State Government, will spend A$4,000,000 ($2.8 million) jointly on a feasibility study for the refinery. Albanese continued, "We want the project to be a success and that's why we are looking for the best location. Australia imports about 80% its fuel and is racing to secure supplies in the face of the Iran War. A report by the Australian Treasury warned that global oil markets have become more vulnerable, with "weaker buffers against supply-shocks". The treasury told Treasurer Jim Chalmers that global oil inventories?have decreased since the conflict in the Middle East has intensified. Meanwhile, refined fuel markets now face a?risk of further tightening?, it said. The majority of Australia's oil refineries were constructed in the 1950s and 1960s. However, high operating costs as well as the rise of large refineries across Asia have forced many of them to close over the last three decades. Ampol's Queensland Refinery and Viva Energy's facility in Victoria, both in the east of the country, are now the only two active refineries. In 2000 there were eight. Western Australia's lone refinery will be shut down by 2021, after BP converted its 146,000 barrels a day Kwinana facility into a fuel terminal. ($1 = 1.4306 Australian dollars)
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Asia markets sell off in a broad scale due to AI fears
Asian markets dropped on Tuesday, led by chipmakers, on concerns?about massive funding requirements of the AI boom. A slide in oil prices didn't do much to lift bonds, and traders were worried about U.S. interest rate hikes coming this week. South Korea's KOSPI plunged more than 8 percent to a low of three months, setting off a circuit breaker. Japan's Nikkei fell 4% after a drop of 2.2% for the Philadelphia Semiconductor Index. Nvidia's shares fell 5% overnight, after the Wall Street Journal reported that the company was in discussions to provide approximately $250 billion in financial guarantees for OpenAI in connection with a massive data center project. CXMT shares in Shanghai surged 466% on their debut day, highlighting the growing interest of investors and the competitive threat from Chinese competitors. Chris Weston is the head of Pepperstone's research. He said that there was a growing sense of optimism in mainland markets regarding China's ability build a global competitive AI ecosystem. The Information reported that China had?also started manufacturing locally developed immersion deep UV lithography machines. This chipmaking tool was long dominated exclusively by Dutch supplier ASML. ASML's shares fell 8.5% on Monday. South 'Korea SK Hynix shares fell by nearly 11%, while Samsung Electronics shares dropped more than 9%. In Tokyo, Kioxia was down 18% and?Tokyo Electron was down 9.8%. CXMT, the chip-making indexes and CXMT were also lower in early trading. OIL SLIDES US YIELDS DIPLEAD Brent crude futures continued their nearly 9% drop on Monday, dropping to $87.55 per barrel as hostilities between Iran and the U.S. cooled following Washington's sudden suspension of airstrikes on Saturday. Donald Trump stated on Monday that the United States and Iran were having "good discussions" and that there was a possibility of a deal. The break in fighting has pushed benchmark U.S. Treasury 10-year yields down by four basis points, to 4.64%. Shorter-term rates have not moved much. The Federal Reserve is expected to hike by 25 basis points this Wednesday, according to traders. "The U.S. - Iran War, which is driving up the price of crude, remains the main determinant for what will 'happen in the global economy over the next few months and, as a result, what informs the central bank policy forecasts at the margin," said Thierry?Wizman, currency & rates strategist?at Macquarie Group. We expect the Fed to tighten its bias this week. The expectation of a hike?sooner rather than later' kept the dollar at $1.1370, the euro at $1.14 and the Australian Dollar just below 70 cents. The yen was trading at 163.78 per dollar, barely above a four decade low. Markets are on edge about Japan interfering in the currency pairing, especially if the Bank of Japan holds rates this week, and causes another yen drop. Wizman said that if BoJ communication was not hawkish, and USD/JPY continues to rise, traders can expect an official response. This could include verbal interventions, rate checks or direct FX market interventions, possibly on Friday. (Reporting and Editing by Shri Navaratnam).
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Whitehaven Coal's output in 2026 is at the top of its guidance range, but costs are at the low end.
Whitehaven Coal, Australia's largest coal producer, said Tuesday that its annual sales and output were near the top end of their guidance range due to the recovery of its Queensland mines. However, the company expects its costs for the full year to be near the lower end of the forecast. As the Sydney-based coal mining company tries to absorb higher diesel costs linked to Middle?East conflict, it is important to consider cost forecast. Whitehaven has said that unit costs are expected to be around A$132 ($92.29), towards the low end of their forecast range. This is after they achieved savings in line with its annualised target between A$60 and A$80 million. The company made A$222 for every ton of thermal coal it sold in the 'fourth quarter,' up from A$189 per ton a year ago, thanks to a stronger Asian demand after the supply of liquefied gas was interrupted. The managed run-of mine production for the year ending June 30 was 40.3 Mt, up 3% on the previous year and close to the upper end of the 37-41 Mt range. The managed coal sales increased 8%, to 32.7 Mt. This was within the estimates of 29.5 to 33 Mt. The Visible Alpha consensus estimate was that fourth-quarter production would rise by 1.3%, to 10.7 mt. Queensland operations including the Blackwater and Daunia Mines, which were purchased from BHP Group for $4.1 billion in early 2024, have recovered from weather disruptions in previous quarters, with production increasing 41% sequentially. New South Wales' mines including Maules Creek Narrabri, and Gunnedah posted a 1.6% increase in quarterly production year-on-year, but output fell by 8% from the previous quarter due to tougher mining conditions. Whitehaven shares were down 1.1% at 0058 GMT, following the declines of the energy subindex and the wider market. $1 = 1.4302 Australian Dollars (reporting and editing by Shilpi Major and Subhranshu S Ahu in Bengaluru).
MORNING BID AMERICAS-Microsoft and task openings to hit pre-Fed vigil
A take a look at the day ahead in U.S. and worldwide markets from Mike Dolan To the degree that worries about pricey tech stocks and rising AI capex costs were partially behind recently's market shakeout, Microsoft's quarterly upgrade need to show an essential minute in the future Tuesday, simply as the Federal Reserve's most current policy meeting gets under way.
Markets run the gauntlet of three major reserve bank choices today, the July U.S. work report on Friday and 4 U.S. megacap earnings reports.
With U.S. election unpredictability as the backdrop, uneasiness ahead of the week's occasions not surprisingly held most major macro rates in check. U.S. stock futures were marginally higher ahead of Tuesday's bell, while Treasury yields and the dollar pushed up too.
Caution ahead of the Fed's policy decision on Wednesday - which is preceded by a possible tightening jolt from the Bank of Japan previously that day - may smother the initial reaction to Microsoft's report.
However a key question for investors will be whether growth in Microsoft's Azure cloud-computing organization has actually picked up enough to justify the billions of dollars being spent on synthetic intelligence infrastructure. Its stock was down a touch, out of hours on Tuesday.
Meta follows with its profits release on Wednesday and Apple and Amazon report the day after.
For the next 36 hours approximately, however, it will be hard to disentangle the issues surrounding the so-called Spectacular Seven megacaps from the Fed meeting - where signals on a first rates of interest cut as quickly as September are expected.
With disinflation resuming, Fed attention is shifting to the other side of its twin required and what appears to be a. significant cooling of the labor market.
Friday's nationwide payrolls report for July comes too late to. influence Fed believing today. But policymakers will today. get a look of simply just how much the tasks market was loosening. last month with the current JOLTS job openings numbers.
Treasury markets stayed calm - helped by Fed alleviating hopes,. a cut in federal government loaning estimates for the coming quarter. and falling crude oil rates.
The U.S. Treasury stated on Monday it expects to borrow $740. billion in the third quarter, $106 billion lower than the April. quote and mainly due to lower redemptions in the Federal. Reserve System Free Market Account and a higher cash balance at. the beginning of the quarter.
The government will provide more information on the refunding. schedule on Wednesday early morning.
Although the election fogs the windscreen before then,. experts are already crunching the Treasury numbers to see what. it may suggest for the debt ceiling, which is because of be reinstated. on Jan. 2 unless Congress suspends it once again. As it stands, the. estimated cash balance for December makes it likely government. could last until July or August before lacking cash.
With OPEC+ oil ministers due to meet again on Thursday and. political tensions in OPEC member Venezuela increasing after a. challenged weekend election result there, crude oil prices lessened. to their least expensive in six weeks and clocked their deepest. year-on-year loss since Feb. 1 - nearly 5%.
Somewhere else, the yen deteriorated into the BOJ meeting and. sterling was steady ahead of the Bank of England's most likely. tight choice on a very first UK rate cut on Thursday.
The euro rose on mixed bag of economic numbers. Even. though Germany tape-recorded an unforeseen contraction of its economy. in the 2nd quarter, and some German states surpassed inflation. expectations for July, the euro zone economy as a whole actually. beat projections as GDP in the bloc climbed 0.3% in Q2.
And it was a heavy earnings journal in Europe too.
Requirement Chartered jumped practically 6% after the. UK-based bank announced a $1.5 billion share buyback, its. biggest ever, and lifted its earnings outlook for 2024.
UK possession manager St James's Place skyrocketed more than. 20% after describing a six-year plan to slash expenses and revamp. its services, putting its stock on course for their greatest. one-day rise given that 2008.
Key developments that should provide more instructions to U.S. markets later Tuesday:. * US June JOLTS job openings report, July customer confidence,. Dallas Fed July service sector survey, May home costs. * Federal Reserve's Federal Free market Committee starts two-day. policy conference, choice Wednesday; Bank of Japan also holds. Monetary Policy Satisfying, decision Wednesday. * US corporate earnings: Microsoft, Advanced Micro Devices,. Pfizer, Merck, Corning, Proctor & & Gamble, Starbucks, Caesars. Home Entertainment, Arista Networks, Archer-Daniels-Midland, Sysco,. Stryker, Skyworks Solutions, S&P Global, Stanley Black & & Decker,. American Tower, Illinois Took Functions, Mondelez, Essex Residential Or Commercial Property,. First Solar, FirstEnergy, Howmet, Xylem, Incyte, Zebra, Match,. Live Country, Ecolab, Gartner etc
(source: Reuters)