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Australian shares fall after Q3 inflation data points to RBA rate holding next week
Australian shares fell on Wednesday, as banks continued to lose money and real estate stocks reversed their course. Local investors also sharply reduced bets that the central bank would cut rates next week following higher-than-expected third quarter inflation. By 0047 GMT the S&P/ASX 200 Index had fallen 0.6%, to 8,958.50 - below the psychologically important 9,000 point level. Early trade saw little change in the benchmark. The Australian Bureau of Statistics consumer price index (CPI), which measures prices for goods and services, rose by 1.3% during the third quarter. This was higher than expected at 1.1% due to rising housing and travel expenses. After the release of the data, the odds of a policy easing were significantly reduced. Investors now price in a 90% chance of the Reserve Bank of Australia holding the cash rate at 3.60%. Next week, on November 4, the RBA will decide on interest rates. The local stock exchange saw a drop of 1,1% in the banks, while the "Big Four' banks were down between 0,6% and 1,7%. Stockland Corporation, which is a peer company in the real estate sector, fell 2% and caused a 0.8% fall. The healthcare stocks dropped 2.6%. This was due to a drop of 4.8% in CSL shares, which fell for the second day running after the company announced on Tuesday that it would delay the U.S. separation of its Seqirus division. Iron ore prices rose following China's recent proposal to limit steelmaking capacity. BHP Mining rose by 0.7%. Woolworths shares rose 1.6% in the wake of an increase in sales for its first quarter, which exceeded market expectations. The benchmark S&P/NZX 50 Index in New Zealand rose 0.4%, to 13,462.37. (Reporting by Shivangi Lahiri in Bengaluru; Editing by Alan Barona)
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Lynas, an Australian company, invests in a new Malaysian facility to produce heavy rare earths to meet the rising demand
Lynas Rare Earths, a company based in Australia, announced on Wednesday a new separation plant in Malaysia. The announcement came as the company noted a growing demand for rare earth oxides that are sourced from outside China. Lynas is the largest rare-earth manufacturer outside of China. The project will cost approximately A$180,000,000 ($116.96,000,000) and have the capability to separate up 5,000 tonnes of heavy rare earth feedstock per year. Amanda Lacaze, CEO of Lynas, said, "Market demand is high for heavy rare Earths and we can be selective about where and at what price we sell them." Lynas Mt Weld in Western Australia and other sources will provide feedstock. The company stated that the timeline for construction of the project is subject to approval by regulatory agencies. Lynas is in talks with a number of partners to ensure that it can offer a wider range of products for fair prices. The shares of the company continued to decline for the fourth session in a row, falling more than 1% at A$15.63 by 2345 GMT following reports of a potential delay in Chinese restrictions on rare earths.
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Australian shares fall as healthcare stocks drag down; inflation data is in focus
Australian shares fell on Wednesday as healthcare stocks lost ground to miners. Local traders were cautious in advance of the third-quarter consumer prices data due later that day. By 2330 GMT, the S&P/ASX 200 index had fallen 0.1% to 9,002.10 point. The benchmark index ended Tuesday 0.48% lower. Michele Bullock, Reserve Bank of Australia Governor, said after the bell Tuesday that an increase of more than 0.9% in core inflation for the third quarter would be a strong argument against a rate reduction at the Reserve Bank of Australia’s next meeting. Investors are now pricing in a 45.4% probability of a 25 basis-point rate reduction at RBA's next week meeting, before the release of inflation figures later on Wednesday. CSL shares fell 3.8% on the local exchange, for the second day in a row, after the company announced Tuesday that it would delay the U.S. separation of its Seqirus division. Banks fell 0.1%, with two of the "Big Four lenders" falling by around 0.4%. Commonwealth Bank of Australia (CBA) and ANZ Group, however, rose 0.3% and ANZ Group, respectively, 0.4%. Iron ore prices rose after China's recent proposal to limit steelmaking capacity. Rio Tinto (BHP) and Rio Tinto (Rio Tinto) both rose by 0.7%. Woolworths shares fell 0.3% in the company news after the firm reported a slight increase in its first quarter sales. Analysts at Jefferies noted that "the last six weeks of the Q1 weren't better than the first 8 weeks." The benchmark S&P/NZX 50 Index in New Zealand rose 0.4%, to 13,454.95 index points. (Reporting by Shivangi Lahiri in Bengaluru; Editing by Alan Barona)
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US appeals Court revives $2.5 Billion opioid lawsuit in West Virginia
The largest drug companies in the U.S. won a trial in 2022, but the U.S. Court of Appeals reversed that decision. The 4th U.S. The 4th U.S. The 4th Circuit has reopened the case and said that the lower court must re-evaluate if the three drug companies are responsible for paying for addiction treatment and prevention in the city and the county, on the basis of their alleged failures to stop "suspicious", large orders from pharmacies. Cencora's spokesperson stated that the company is disappointed with the ruling, and they are considering their next steps. This could include a second appeal. Cencora says drug companies have to "walk a tightrope" between providing necessary medication and preventing diversion of controlled drugs. Cardinal Health declined comment. McKesson has not responded to comments immediately. Huntington Mayor Patrick Farrell stated that the city is looking forward to a chance to hold drug distributors responsible for "the devastating damage that they have done to our city and to far too many families". Distributors had agreed to pay as much as $21 billion in order to settle the thousands of lawsuits filed against them by local and state governments across the nation. Communities in West Virginia, which was hard hit by the opioid crisis, chose not to join the national settlement and instead sought a larger recovery. In 2022, U.S. district judge David Faber ruled in favor the three drug companies, concluding that West Virginia's law on "public nuisances" did not create any liability for companies who sold prescription drugs and that the companies had met their obligation to report suspicious orders of drug to U.S. regulatory agencies. The 4th Circuit reversed those findings. The appeals court determined that the three drug manufacturers shipped opioids to pharmacies repeatedly in quantities exceeding the distributors thresholds for "suspicious orders" without reporting to the U.S. Drug Enforcement Administration. According to the 4th Circuit, Cencora (formerly AmerisourceBergen) supplied 775 potentially suspect orders over a period of five years from a single Cabell County pharmacy, but only reported 16 orders to the DEA. Dietrich Knauth reported from New York, and Nate Raymond from Boston. Richard Chang and Aurora Ellis edited the story.
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Sources say that US officials meet with mining executives in Brazil to talk about rare earths.
The U.S. The U.S. According to anonymous sources, the meetings took place on the sidelines an event that was taking place in Salvador in the state of Bahia in the northeastern part of Brazil. Rare earths are expected to come up in the negotiations between Brazil and the U.S. aimed at removing the tariffs placed by President Donald Trump against Brazilian products. One source said that the discussions also show how the U.S. seeks alternative suppliers in the face of trade disputes with China which dominates rare earths markets. This source who was present at the meeting said that Escobar talked about partnerships between U.S. mining companies and Brazilian miners to explore rare Earths. Brazil is a country with vast mineral reserves, despite its small production. These minerals are vital for the manufacture of high-tech equipment. A second source confirmed that St George Mining of Australia, which operates a rare-earths project in Minas Gerais, was present at the meeting. Julio Nery of the mining lobby group Ibram confirmed that Escobar had met with representatives in the sector but refused to provide any details. "He has already met with Ibram at least three or four occasions and requested to meet with Raul Jungmann," Nery said, referring Ibram president Raul Jungmann. Reporting by Lisandra paraguassu from Brasilia, and Marta Nogueira from Rio de Janeiro. Fernando Cardoso wrote the article. Natalia Siniawski edited it.
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The long-stalled campaign to make daylight savings time in the US permanent has failed.
The U.S. Senate took up a long-stalled attempt on Tuesday to end daylight saving time and make it permanent, but failed to reach a consensus. Senator Rick Scott (a Republican) and other senators took the floor Tuesday to urge passage of the first unanimously-approved bill in March 2022. Senator Tom Cotton, however, said that he would be opposed to any attempt to speed up the bill. Congress has been debating the issue for many years. The issue was discussed in a hearing held earlier this year, and President Donald Trump supported the change. However, it does not seem to be any closer to an agreement. In the United States, standard time returns on Sunday.
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Stocks reach record highs on tech boost as Fed and earnings are in focus
The global shares rose to a record intraday on Tuesday, helped by signs that trade tensions have cooled between the U.S. The U.S. Federal Reserve will announce its policy on Wednesday, kicking off a week of announcements by central banks around the world, including those in Japan, Canada, and Europe. According to CME's FedWatch Tool, the Fed is widely expected at this meeting to reduce interest rates. Markets are pricing in a 99.9% probability of a 25 basis point rate cut. The markets have been boosted by expectations of a lower interest rate path from the central banks, as well as recent signs of an easing of trade tensions between China and the U.S. This has sent stocks higher, and kept the yield on the 10-year U.S. Treasury anchored near multi-month lows. The ongoing U.S. shutdown has also led to an absence of economic data that investors can parse. Investors have turned to other sources for information on the state of the economy due to the lack of official data. The ADP National Employment Report released its first weekly estimate on Tuesday. It showed that private payrolls in the United States increased by 14,250 jobs per week over the last four weeks. Subadra Rajappa is the head of U.S. Rates Strategy at Societe Generale, New York. She said: "Volatility was extraordinarily low, which in some ways, surprised me, but it appears to be very stable and you are seeing a continued rally in risky asset classes." "It's been difficult to read the economy, particularly for the Fed meeting. You have lower yields, a more favourable financial environment, a drop in inflation, and a somewhat stable job market." At their meetings, the European Central Bank (ECB) and Bank of Japan will likely keep rates largely unchanged. DOW LEADS GAIN AMONG MAJOR INDEXES Wall Street closed with another record. This was boosted by a 2% gain in Microsoft following a deal it made that allowed OpenAI to restructure as a public benefit company while giving the megacap a 27% share in ChatGPT. Also providing a boost was a 5% jump in Nvidia after CEO Jensen Huang said the artificial-intelligence chip leader will build seven new supercomputers for the U.S. Department of Energy, and the company has $500 billion in bookings for its AI chips. The Dow Jones Industrial Average rose by 161.78 points or 0.34% to 47,706.37. The S&P 500 gained 15.73 points or 0.23% to 6,890.89, and the Nasdaq Composite gained 190.04 or 0.80% to 23,827.49. Peter Cardillo is the chief market economist of Spartan Capital Securities, a New York-based brokerage. He added that "enthusiasm" about Trump's Asian visit has also been expressed. Stocks have been rising as U.S. president Donald Trump and Chinese counterpart Xi Jinping meet to discuss a framework to halt the tougher U.S. trade tariffs and China’s export restrictions on rare earths. This could ease market concerns about escalating a trade war. This week, Microsoft, Alphabet Apple, Amazon, and Meta Platforms will report their earnings. Investors will be watching closely to see if the results justify high valuations. More than four out of five S&P companies beat expectations LSEG data shows that 86.7% of the 180 S&P companies who have announced earnings up to Tuesday morning have surpassed analyst expectations. MSCI's global stock index rose 21.18 points or 0.12% to 1,013.68. It had previously reached a record high of 1,015.73, while the pan-European STOXX 600 closed down 0.22%. The yield on the benchmark 10-year U.S. notes dropped 2.1 basis points, to 3.976%. The dollar index (which measures the greenback versus a basket currencies) fell 0.07% at 98.70. Meanwhile, the euro rose 0.11% to $1.1656. The dollar fell 0.52% against the Japanese yen to 152.07, after comments from a Japanese Minister and U.S. Treasury Sec. Scott Bessent helped ease some concerns over a more expansive fiscal policy and monetary policies in Japan. The value of the pound fell by 0.45%, to $1.3275. U.S. crude oil settled at $60.15 a barrel, down 1.89%, while Brent settled at $64.40 a barrel, down 1.86%. Investors weighed the impact of U.S. sanction on Russia's largest oil companies, along with a possible OPEC+ production plan.
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Utility Edison exceeds profits estimates with higher electricity rates
Edison International announced a higher-than-expected third-quarter profit on Tuesday as it benefited from increased rates for its service. Utilities can raise electricity rates by using general rate cases (GRC). Regulation utilities initiate the proceedings to request a rate hike based on their total costs of providing services and claim a revenue shortage. The U.S. power companies are looking to increase their customers' electricity bills in order to meet the rising demand for AI-focused datacenters, domestic manufacturing, and extreme weather conditions like wildfires. Southern California Edison (a subsidiary of Edison International) posted an increase in adjusted third-quarter profit, due primarily to the higher revenue generated by the 2025 General Rate Case Final Decision. Edison said that the Eaton Fire was confirmed by the Wildfire Fund Administrator as a "covered fire", making it eligible to receive financial assistance through the state-backed funds. The wildfires that have ravaged Los Angeles are expected to be one of the most expensive natural disasters in U.S. History. This has put the electric utilities in the area under increasing scrutiny. Southern California Edison reached an agreement with several intervenors in September to recover approximately $2 billion from the $5.6 billion losses attributed to 2017-2018 wildfires, mudslides and other natural disasters. Edison expects its full-year adjusted profit in 2025 to be between $5.95 to $6.20 a share. This is a significant change from the previous view, which was $5.94 to $5.34 a share. According to data compiled and analyzed by LSEG, the Rosemead-based utility reported an adjusted profit per share of $2.34 for the quarter that ended on September 30. This compares with analysts' estimates of $2.18. Sumit Saha, Bengaluru. Shilpa Majumdar, editing.
MORNING Quote AMERICAS-Waller and Bessent assist peg back Treasury yields
A look at the day ahead in U.S. and global markets from Mike Dolan Salvos from a Federal Reserve guv and the inbound Treasury Secretary assisted pin down today's inflation-inspired retreat in worrisome U.S. Treasury yields before Donald Trump's. inauguration as president on Monday.
The turnaround of the year's increase in U.S. yields and the. dollar paired with news of a positive end to last year for. China's economy nudged world stocks up on Friday.
Two-year Treasury yields hit their least expensive level. because Jan. 2 - a punchy 20 basis points off Monday's peaks -. after Fed board guv Christopher Waller on Thursday held out. the opportunity of three or four rates of interest cuts this year.
Not unlike a comparable projection from Bank of England. policymaker Alan Taylor the previous day, the uncommonly dovish. draw from Waller recommended two times as much easing this year than. currently priced into futures markets.
With the Fed governor inviting the week's remarkably soft. inflation report and stating March might not be dismissed for a. resumption of rate cuts, Fed funds futures have moved back. closer to pricing 2 rate cuts in 2025 - having doubted any. cuts were coming as recently as last week.
The rally in Treasuries saw two-year yields slip listed below 4.45%. and the 10-year penetrated back under 4.60%. The dollar. index held up, partly because the yen damaged. in spite of fresh reports the Bank of Japan would raise its secret. policy rates next week.
Although a tech-sector drag saw Wall Street stock indexes. step back on Thursday - after the prior session's best. day of the year so far, amid an earnings-related bank stocks. boom - futures were up once again ahead of Friday's bell and a. three-day weekend due to Monday's Martin Luther King vacation.
BESSENT HEARING
Next week's inauguration and Trump's preliminary policy relocations. are now firmly in focus and the Treasury market stays key.
To that impact, the confirmation hearing for Trump's. Treasury Secretary pick Scott Bessent on Thursday was an. important marker for the financial obligation market and the dollar.
Bessent underscored prepare for a rollover of Trump's 2017. tax cuts - positing an economic catastrophe if they were not,. in spite of disquiet amongst some Congressional Republicans. However he. likewise stood directly behind the dollar's dominant worldwide role,. supported Fed self-reliance and firmly insisted no financial obligation default would. ever be thought about.
Earlier in the day, the current U.S. economic medical examination. showed retail spending remained firm, weekly jobless claims. ticked up and organization confidence recorded by the Philadelphia. Fed study jumped higher this month. December industry and. real estate begins numbers are out later Friday.
Overseas, news of a 5% Chinese gross domestic product development. for 2024 fulfilled both market forecasts and the government's target. -- despite some doubts about that just a couple of months back. Fourth. quarter annual readings were greater than anticipated at 5.4% and. both commercial and retail sales development in December also. surprised to the benefit.
Perhaps of biggest relief in Beijing was news that regular monthly. home costs stopped succumbing to the very first time since 2023--. although they stayed 5.3% lower year-on-year.
Chinese stocks were partially greater.
Longer-term issues for the Chinese economy continued to. lurk, however, with information showing the population there fell last. year for the third year running.
In Europe, euro zone inflation was available in as anticipated however there. was another negative surprise for Britain's struggling economy. with a surprise drop in UK retail sales in December. The pound. and recently edgy British gilt yields slipped.
Secret advancements that ought to provide more instructions to U.S. markets in the future Friday:. * U.S. December real estate starts and authorizations, Dec industrial. production, Nov TIC data on foreign holdings of Treasuries. * U.S. corporate incomes: State Street, People Financial,. Regions Financial, Truist, Huntington Bancshares, Schlumberger,. Fastenal
(source: Reuters)