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Utility AES reports a rise in profit for the quarter on higher electricity prices
AES, a U.S. utility company, reported on Tuesday a higher profit for the third quarter due to increased electricity rates and booming demand. Utilities are pushing to increase customer bills in order to fund upgrades to critical infrastructure, such as electrical grids or power lines. This is to support a surge in electricity consumption that has never been seen before. The main reason for this is the rapid expansion of data centers devoted to artificial intelligence (AI) and cryptocurrency. AES's renewables unit has seen significant growth since last year. This is due to a global push towards cleaner power sources, as the U.S. electricity consumption is predicted to reach record levels. Andres Glski, CEO of Gluski Energy, said: "We have a backlog of 11.1 gigawatts of power purchase agreements signed, including 4 GW from hyperscalers, with the majority coming online in the next three to four years." Utility reported revenue of $3.35billion for the third quarter. This is up from $3.29billion a year earlier. The Virginia-based firm reported a net income of $634 million attributable shareholders, up from $504 million the year before. (Reporting and editing by Shilpi Mahumdar in Bengaluru, Vallari Srivastava from Bengaluru)
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Eversource Energy exceeds profit expectations for the third quarter on higher power rates
Eversource Energy, aided by its higher service rates, beat Wall Street's expectations for the third quarter profit on Tuesday. After the bell, shares of the company grew 2%. U.S. utilities are seeking rate increases to upgrade their grids in the face of extreme weather conditions and a growing demand for industrial electrification, data centers and industrial electrification. Rate-case proceedings are used by utilities to determine the amount customers pay for services such as electricity, gas, steam, and private water. Eversource's profit in its electric transmission unit rose by 6% during the third quarter to $185.5 millions, while that of its electric distribution business increased by nearly 9% to a total of $221.6 millions. According to LSEG, Eversource has lowered its profit forecast for 2025 to $4.72 - $4.80 per common share. The midpoint of this range was higher than the average analyst estimate of $4.73. The third-quarter results have been partially offset by a charge of $75 million or 20 cents per common share due to an increase in liability on two wind projects that were sold to Global Infrastructure Partners. Eversource sold to GIP its stakes in the South Fork Wind and Revolution Wind Projects last year. The adjusted gross proceeds were $745 million. This was down from $1.12billion due to reduced capital expenditure and a delayed commercial operation for Revolution Wind. According to data compiled and analyzed by LSEG, the Massachusetts-based firm posted an adjusted profit per share of $1.19 in the quarter July-September, compared to the analysts' estimated average of $1.15. (Reporting by Dharna Bafna in Bengaluru; Editing by Alan Barona and Tasim Zahid)
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Budget plan: Canada could remove oil and gas emission cap
The government revealed in its budget plan for the first budget of Prime Minister Mark Carney that Canada may scrap a cap on gas and oil emissions if other initiatives like carbon markets, stronger regulation, and carbon capture and storage technology prove successful. In the climate plan that was part of the first budget of Prime Minister Mark Carney, it said the cap would be no longer needed as its value would be marginal. The Canadian emissions cap is not legally enforced and will not take effect until 2030. However, Canadian oil and natural gas companies have condemned it because they believe that this would lead to a reduction in production. Carney has been accused by members of his party for ignoring the Liberals' environmental focus. He has focused on trying steer Canada's economic growth through trade wars against the U.S. Carney's Budget also included measures to accelerate investments in clean energy, including more tax credits, updated clean fuel regulations, and plans to upgrade Canada's electrical networks. The government said it would amend greenwashing laws that created uncertainty for investors. The legislation was passed during the former Justin Trudeau government's tenure last year. criticized Oil companies. Keith Stewart, senior energy strategist for Greenpeace and former UN climate special envoy, said Carney, who was due to release the budget, should do more for the environment. "When you are the Prime Minister, you can set the rules, and tell people that they cannot do certain things, such as continue to develop fossil fuels," said Stewart. "There are some things that government can do, but bankers cannot - and I'm not sure he has made the shift yet." The budget referred to the transition towards low-carbon technology and energy as "an economic necessity." It also called it a "moral duty." (Reporting and editing by Maria Cheng, Caroline Stauffer, and Deepa Babington).
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Brazil's Lula promises "COP of Truth" as UN warns about dangerously high emissions
Brazil's President said that a U.N. Report warning that global carbon emissions are too high to stop global warming has prompted him to declare that the U.N. Climate Change Summit in the Amazon this month will be a COP of Truth and offer real solutions. Despite 30 years of global negotiations, the Paris Agreement of a decade back failed to prevent the world from warming beyond 1.5 degrees Celsius. The United Nations Environment Programme stated on Tuesday that the world is heading for a 2.3 to 2.5degC extreme warming. The forecast is based on the assumption that countries will meet their commitments to reduce emissions. The world will become even hotter if they fail to meet their pledges. UNEP stated that the 1.5C overshoot would be hard to reverse, and that countries will need to reduce greenhouse gas emissions even more to avoid a runaway climate. Brazil's Luiz inacio Lula da Silva, whose nation hosts COP30 from November 10-21 said that failure to deliver past climate agreements - such as the Kyoto Protocol and the promised climate financing - is demoralizing for the people of the world. Lula told reporters in Belem that countries should fulfill their past promises rather than make new ones. Lula stated that he did not want the COP "to continue to be a fair or an exhibition for climate products with everyone seeing their own views and how they wish to see it and no one being forced to act and make things happen." Lula said that he wanted the COP to be serious and to implement the decisions made. He noted that some countries "were not complying" with their commitments under the Paris Treaty to limit global warming to "well beneath" 2degC over pre-industrial levels. The U.N. emission report published on Tuesday showed that the current trajectory of warming was only 0.3degC less than it was before the COP29 meeting in Baku, Azerbaijan. This means the new plans announced for this year did little to change the situation. Brazil will propose the creation of a new global environment council linked to the U.N., which is empowered to travel around and monitor progress in climate pledges all over world. "Because otherwise, nothing will happen." Lula stated that if a country declares "I will not comply", nothing happens. "The COP will lose its momentum and people won't want to take part because it is pointless." MONEY MEETS This conference will take place in the Amazon rainforest in the riverside town of Belem. Dozens of indigenous groups are expected to attend. Despite the high costs and limited capacity, logistical problems have been created. "We wanted to challenge ourselves, not be comfortable." Lula stated that she wanted to show the Amazon to the world. Many corporate executives, bankers, regulators and investors instead have travelled further south, to the Brazilian coastal city of Sao Paulo. They hope to accelerate climate action by highlighting the things that work. In a report released on Tuesday, clean industry groups stated that more than 1,000 clean projects are in the development phase around the world. According to Mission Possible Partnership and Industrial Transition Accelerator, more than 70 clean projects, worth a combined $140 billion are expected to be shovel ready in the coming months. Business experts gathered near Sao Paulo’s financial center to attend panel discussions, roundtables and meetings on topics ranging from carbon markets, to the best practices for pricing carbon stored in a forest. Alicia Arguello is the head of sustainability at Hitachi Energy. She attended a Monday roundtable on green electricity grids. She said, "I received a lot feedback." Another three-day conference was held at a huge convention center across town. More than 150 speakers were present. Some people were disappointed that they had to travel four hours from Sao Paulo to Belem for the COP30 discussion. This meant that they wouldn't be able network with officials from other countries. Climate Fund Managers CEO Andrew Johnstone said, "These people and ourselves tend to be implementers." Being absent from Belem affects the discussions and collaborations which may result when ideas and people are brought together. It's a bad thing. In 30 years of climate talks, the world has made progress. When the Paris Agreement signed a decade ago, the world was on track for a temperature increase of around 4degC. UNEP reported that global carbon emissions will increase by 2.3% in 2024 to 57.7 gigatonnes CO2 equivalent. Reporting by Kate Abnett, Simon Jessop and David Gregorio in Sao Paulo.
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Marathon Petroleum's Q3 profits miss estimates due to higher turnaround costs
Marathon Petroleum, a U.S. refiner, missed Wall Street's expectations for the third quarter profits on Tuesday as higher turnaround costs in refining and losses from renewable diesel weighed on performance. At 1:30 pm, shares of Marathon, which is the largest refiner in the United States by volume, had fallen about 7%. ET (1830 GMT). Marathon's results highlight the challenges facing U.S. refining companies as inflation and high maintenance costs eat away at earnings, despite strong demand. According to LSEG, the company reported a quarterly profit of $3.01, compared to an average analyst estimate of $3.15. Analysts said the results were disappointing, as the earnings missed was rare and came despite outperformance of peers. Valero Energy, Phillips 66, and HF Sinclair all reported better than expected results due to a rebound in the refining margins. COSTS ARE HIGHER, BUT RESULTS ARE LOWER Marathon reported $400 in quarterly refining turn-around costs. This is up from $287 millions a year earlier, due mainly to increased planned maintenance activities. The company estimates that the turnaround expense for the fourth-quarter will be approximately $420 million. This is mainly due to activity on the West Coast. For the third quarter 2025, refining costs increased to $5.59 per barrel from $5.23 a barrel. Refiners in the Gulf Coast reported an increase in operating costs from $3.96 to $4.70 a barrel. John Quaid told investors Tuesday that the downtime at the Galveston Bay Refinery, which is the second largest refinery in the U.S. by capacity, caused by a June fire, had a negative impact on the Gulf Coast's capture rate and results. Marathon plans to invest $200 million in a project for upgrading Galveston Bay’s distillate-processing unit this year, and another $575 million over the next two. The quarter's refining and selling margin was $17.60 a barrel, compared to $14.63 a barrel one year ago. Analysts noted that the third quarter West Coast refining profits of $947m were lower than expected. The refiner’s renewable diesel segment posted a loss of $56M for the third quarter, down from a loss of $61M a year earlier. Executives said that the results were affected by lower margins during the third quarter, due to higher prices for feedstock. Marathon said that its 13 refineries ran at 95% capacity in the third quarter. This is up from 94% one year earlier. The company plans to run its facilities at 90% capacity by the fourth quarter 2025.
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As the market waits for US jobs data, gold slips by more than 1%.
The dollar reached three-month highs as traders awaited U.S. data to determine the Federal Reserve's policy. As of 2:15 pm EST (1915 GMT), spot gold was down by 1.5% at $3,940.75. U.S. Gold Futures for December Delivery fell 1.3% and settled at $3,960.50. Gold is more expensive for holders of other currencies as the dollar index has reached three-month highs. David Meger is the director of metals at High Ridge Futures. He said, "We're seeing the dollar reaching new highs and that it has a weight in the market. Fed Chair Jerome Powell said that the Fed's interest rate cut last week might not be the last for the year. CME Group's FedWatch tool shows that traders now expect a rate reduction at the Fed meeting on December 9-10, down from more than 90% one week ago. Gold that does not yield is a good investment in low interest rate environments and times of economic uncertainty. Investors are paying more attention to non-official economic data such as the ADP National Employment Report, since the U.S. shutdown is likely to be the longest in history, and will halt the release of official government data. ADP's October report is scheduled to be released Wednesday. The Fed's comments have revealed different perspectives on the data gap. Bullion has lost more than 9% of its value since October 20, when it reached a record high. Gold is losing some of its froth, but still prices in the concerns about Fed independence, stagflation and underlying geopolitical risks and tensions. In a note, Rhona O’Connell, an expert at StoneX, stated that some of the froth had been blown away in a much needed correction. Palladium dropped 3.1% to 1,400.30. Platinum was also down 1.8% at $1,538.05. (Reporting from Noel John in Bengaluru and Pablo Sinha; Editing by Alexander Smith and Paul Simao)
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Oil prices fall on strong dollar and fears of oversupply
The oil prices fell on Tuesday due to weaker manufacturing data and a stronger US dollar. In addition, the OPEC+'s decision to pause production increases in the first quarter next year may signal their concern over a possible supply glut. Brent crude futures were down 31 cents or 0.5% to $64.58 per barrel at 12:27 pm (1726 GMT). U.S. West Texas Intermediate Crude was down 33 cents or 0.5% at $60.72. The high dollar valuation is putting pressure on crude futures today. U.S. stocks are also experiencing a large downside correction during the early trading as the government shut down may begin to add downward pressure. This could ultimately hurt domestic fuel consumption," said Dennis Kissler. Senior vice president of BOK Financial's Trading Department. The dollar rose to a new four-month high versus the euro on February 2, as doubts about another rate cut in this year were raised by divisions within the Federal Reserve. The dollar's strength makes assets priced in dollars, such as oil, more expensive for those who hold other currencies. Wall Street's major indexes fell to a new low on Tuesday, after some large U.S. financial institutions warned of a possible market decline. The U.S. shutdown entered its 35th consecutive day on Tuesday, matching the record for longest government shutdown in history set by President Donald Trump during his first term. The cost is increasing every day. The first time food assistance was stopped for the poor, federal employees from airports to the military and law enforcement are not paid and the economy is blinded by limited government reporting. A private sector survey revealed that in Asia, Japan's manufacturing activities shrank at the fastest rate in 19 months in October due to a slump in demand for key automotive and semiconductor products. On the supply-side, the Organization of the Petroleum Exporting Countries (OPEC+) and its allies agreed on Sunday to a modest increase in oil production for December, and a pause of increases in the first three months of 2019. Bjarne Shieldrop, SEB Research's chief commodities analyst, said that the U.S. sanctions against Russian energy companies Lukoil, and Rosneft were fading. "On Nov 21, when the sanctions are imposed (on companies that continue to do business with Russian companies), they will most likely disappear, or be pushed away in due time." The American Petroleum Institute is expected to release its latest U.S. inventories later today. According to a preliminary poll, U.S. crude stockpiles are expected to have increased last week. Reporting by Seher DAREEN in London, Ashitha SHAIVPRASAD in Bengaluru, and Emily Chow, in Singapore. Editing by Ros ROUSSEL, Louise Heavens, and Tomasz JANOWSKY
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IDB announces first Amazonia Bonds and expects Brazil to follow in
Inter-American Development Bank's (IDB) first Amazonia Bond raised $100 million to combat deforestation, boost local communities and support them, according to its chief. Other countries will follow soon. The coupon rate for the five-year bond is 3.802%. Ilan Goldfajn, President of the IDB, said that the operation is the start of a plan for the IDB to issue bonds up to $1 billion "over time." He added that the Brazilian government has told them they intend to issue similar bonds using the same framework developed by the IDB and the World Bank. Brazil's Treasury said that "studies are underway" to evaluate the issue of Amazonia Bonds. The Treasury issued its first sustainable sovereign bond in 2023, under a framework it developed itself. Brazil, Colombia, and Peru are three of the countries that work to protect the Amazon rainforest. This region is home to over 10% of all known species on the planet. Goldfajn stated that the issuance was part of a package IDB initiatives aimed at boosting sustainable finance in advance of next week's COP30 Climate Summit. About $3 billion of this amount will be used to provide currency-hedging services to Brazil through a derivatives agreement with the central banks, who will then extend the service to the local banks. Goldfajn explained that the currency-hedging, announced last year as part Eco Invest – a Brazilian government initiative to attract foreign capital for long-term sustainable project – took time to overcome its technical obstacles. The ISDA agreement will now be signed the following week. The triple-A rating of the IDB is being used to provide lower-cost, longer-term hedging against fluctuations in the local currency. The Brazilian real has gained more than 13% this year, after losing over 20% in 2024. Lula's government will announce a fourth Eco Invest Auction as part of the COP30 announcements. This auction is now aimed at Amazon bioeconomy projects and nature-based tourist infrastructure. Goldfajn stated that the IDB would also seek to increase access to financing for regional cities via its Amazonia Forever Program so they could improve their resilience to flooding, droughts and fires. He added that the project was developed in conjunction with Nordic partners, who provided guarantees for lending. He said that when people in other countries hear about the Amazon, they only think of the forest. "For years, that narrow view focused on deforestation. That's changing. "Our approach is holistic. If we provide people with sustainable living conditions and income, they can live in peace within the forest." (Reporting by Marcela Ayres; Editing by Alexandra Hudson)
Stocks drop after recent rally, dollar gains and bitcoin drops
The major stock indexes fell on Tuesday. Chip stocks were also lower. Goldman Sachs CEOs and Morgan Stanley warned that the equities market could be headed for a correction. Meanwhile, the dollar rose to a 4-month high against euro.
The dollar was also supported by the drop in U.S. Treasury Yields, as a result of a risk-off mood.
Bitcoin, the cryptocurrency, fell 6.45% and dropped below $100,000 for first time since last June.
At an investment summit held in Hong Kong, the bank CEOs warned of the possibility of a stock-market correction of over 10% within the next two year. Nvidia shares fell by 4% and an index of semiconductors was also down 4%.
Palantir Technologies shares fell more than 8%, despite its strong quarterly results. The company's value has more than doubled this year. It forecasts fourth-quarter results that are above market expectations, as rapid adoption of AI is driving demand for its products.
Michael Burry (known for his successful bets in 2008 against the U.S. Housing Market) has placed bearish wagers on Nvidia, and Palantir. This was revealed by a Monday regulatory filing.
The S&P 500 dropped by more than 1%, and the Nasdaq fell by more than 2 %. The Nasdaq has still gained about 21% this year.
Keith Buchanan is a senior portfolio manager with Globalt Investments. He said, "The market has been moving up as it should from an earnings perspective, but it appeared that it was positioning itself for a risk off pullback, even if there were the slightest disappointments."
The Dow Jones Industrial Average dropped 251.44 points or 0.53% to 47,085.24, while the S&P 500 declined 80.42 points or 1.17% to 6,771.55; and the Nasdaq Composite was down 486.09 points or 2.04% to 23,348.64.
The MSCI index of global stocks fell 11.51 points or 1.14% to 996.34.
The STOXX 600 Index fell by 0.3%.
Stocks have been helped by optimism about AI deals. Stocks rose on Monday following Amazon.com’s $38 billion cloud service deal with ChatGPT creator OpenAI.
Divides within the Fed have raised doubts about another rate cut in this year. Jerome Powell, the Fed Chair, said that a rate cut in December was not predetermined. The Fed lowered its rates last week. CME FedWatch shows that traders are now betting on a 66% chance of a December rate cut, down from 94% the week before. The euro dropped for a fifth consecutive session, and was down by 0.3% to $1.148. This is its lowest level since August 1. The dollar fell 0.5% against the yen despite the Japanese currency remaining near its recent 8-1/2 month low.
Sterling fell after UK Finance Minister pointed out that her budget will include "hard decisions". Sterling fell 0.72% to $1.3144. U.S. Treasury rates declined amid a risk-off mood in the financial markets.
Due to the shutdown of the federal government, the Bureau of Labor Statistics' closely-watched monthly jobs report will not be released on Friday as originally scheduled.
The yield on the benchmark U.S. 10 year notes dropped 2 basis points from 4,107% to 4.087% on Monday.
Brent crude dropped 45 cents and settled at $64.44 per barrel. U.S. crude was down 49 cents. A stronger dollar weighed.
Spot gold dropped 1.69%, to $3933.67 per ounce. (Additional reporting by Twesha Dikhshit, Purvi agarwal, Johann M Cherian and Lucy Raitano, in Bengaluru, and Kevin Buckland, in Tokyo. Editing by Sam Holmes and Mark Potter; Sharon Singleton, Richard Chang, and Mark Potter)
(source: Reuters)