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Stocks fall ahead of Fed announcement, yields and dollar are up slightly
The?dollar, U.S. Treasury yields and most major stock indices fell on Tuesday as the Federal Reserve is expected to cut interest rates. However, policymakers may also make hawkish remarks. Treasury yields and dollar rose after the release of U.S. Labor Market Data, which showed that U.S. Job Openings grew modestly in October but hiring remained low. Investors expect the Fed to announce a rate reduction on Wednesday, but policymakers are expected to remain divided. Some policymakers are concerned that the price pressures may easily return, while others are more concerned with the health of labor markets. It's quiet before the storm. Adam Sarhan, CEO of 50 Park Investments, New York, explained that tomorrow's Fed meeting is a major catalyst. It's normal for the market to be in a mild state right now. The Reserve Bank of Australia had earlier held rates at the same level as was expected on Tuesday. It also warned against further policy easing, and that rates may rise if inflation pressures remain stubborn. The Australian dollar rose 0.3% to US$0.6641. Both the Bank of Canada (BoC) and Swiss National Bank (SNB) are expected to keep rates unchanged when they meet respectively on Wednesday and Thursday. Investors digested the news that Washington would allow Nvidia to export its H200 processors - its second best artificial intelligence chip - to China and collect a 25% fee for such sales. ?Nvidia shares were down by 0.3%. JPMorgan Chase shares fell by 4.7%. JPMorgan Chase Consumer and Community Banking Chief Marianne Lake said that the bank expects costs to rise. About $105 billion by 2026. The Dow Jones Industrial Average dropped 179.03, or 0.38% to 47,560.29. The S&P 500 fell 6.00 points, 0.09% to 6,840.51, and the Nasdaq Composite grew 30.58, or 0.13% to 23,576.41. The MSCI index of global stocks fell by 1.60 points or 0.16% to 1,006.44. The pan-European STOXX 600 Index slipped 0.1%. A OUTLOOK AT RATES The dollar index, which measures greenbacks against a basket including the yen, euro and yen, increased 0.15% to reach 99.22. Investors also consider the outlook for interest rates in 2026. This is not only with the Fed, but also outside the United States. "A hawkish repricing has been rolling across curves in other countries - rate increases are being priced in for Australia and Canada in 2026, so the dollar may be under pressure if Jerome Powell, the Fed Chair, fails to out-hawk the markets," Karl Schamotta said, Chief Market Strategist at Corpay, in Toronto. The yield on the U.S. benchmark 10-year Treasury note increased 1.4 basis points, to 4.186%. It had previously hit a low of 4.141%. This was the first time in five weeks that the Treasury market has seen a four-session winning streak. Investors focused their attention on the peace talks between Russia and Ukraine. Brent crude futures fell 55 cents or 0.88% to settle at $61.94 per barrel. U.S. West Texas Intermediate Crude fell 63 cents or 1.07% to $58.25. The yen also weakened on the foreign exchange markets. The yen weakened instantly after a powerful earthquake rocked Japan Monday.
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With a win over PSV, Soccer-Atletico rockets up the Champions League rankings
Atletico Madrid came from behind on Tuesday to defeat PSV Eindhoven by a score of 3-2 and climb to seventh place in the Champions League standings. This ensures their progression to the knockout stage. After Guus Til had given PSV an early advantage, Julian Alvarez and?David?Hancko scored after some poor defending from their Dutch hosts. Ricardo Pepi's goal, five minutes before the end of play, was enough to send PSV roaring back. The crowd was vociferous and urged the home team on, but despite numerous chances,?PSV couldn't force a dramatic draw late. The home team was hoping to continue the momentum from their 4-1 shock win over Liverpool at the end last month in their last Champions League match and they got off to an early start at the Philips Stadion. They were undone, however, by mistakes and ended up dropping from 15th to the 19th place in the rankings. Atletico, who occupied the 12th position before Tuesday's game, now has 12 points after six matches. This should be enough for them to qualify at least for the playoffs, if they are to judge by last season's results. PSV has a lot to do, as they are still only on eight points. They have games against Newcastle United at home and Bayern Munich away next month. In the 10th minute, Til was given a simple finish by Couhaib Drieech after Couhaib had set up a quick counterattack. Giuliano SIMEONE stole a pass from Matej Kovar, the goalkeeper, to Yarek GASIOROWSKY, which was intended for Yarek. Simeone then fed Alvarez and?Sorloth, who scored in the 37th minute. Hancko scored a rebound goal in the 52nd to give Atletico the lead. Four minutes later, Sorloth headed in Pablo Barrios's pinpoint cross without the home defenders being seen. PSV RETROACTIVE GOAL TO ASSURE TENSIVE FINISH PSV, which has scored several late goals in Champions League, set up a tense end when Ivan Perisic flicked a corner on and Pepi touched it in at the backpost. Armando Obispo blew a golden opportunity to score a goal at the end of the game. "We suffered unnecessarily. We would have scored more goals if we were more clinical. Alvarez said, "We suffered but what matters is that we got three points." Jerdy Schoouten, captain of the?PSV, said: "I don't think we created the chances. They did." They're lethal. We could have played better, especially in the second-half. The small things were what decided the game. We became stagnant, couldn't move out of the way and got nervous. It's a pity to lose. We improved in the second-half. (Written by Mark Gleeson, Cape Town. Edited by Clare Fallon & Toby Davis).
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Source: SpaceX will pursue an IPO in 2026 that raises more than $25 billion.
Elon Musk’s SpaceX will?be pursuing an initial public offer next year. The company is looking to?raise more than $25 billion with a valuation of over $1 trillion. SpaceX has begun discussions with banks regarding the public listing. This could happen around June or July. Musk said in 2020 that SpaceX would list Starlink a few years later, once revenue growth was "smooth and predictable". SpaceX didn't?immediately reply to a comment request. Saudi Aramco is the only IPO that has?achieved a value of $1 trillion or higher. It debuted 'in December 2019 and had an estimated market capitalization of $1.7 billion. SpaceX will use the funds raised from the public listing for the development of space-based data centres, including the purchase of the chips needed to run them. Musk had expressed an interest in this idea during a recent meeting with?Baron Capital. Bloomberg News reported that the news earlier in the day. Bloomberg reported that the company will make a revenue of?around $15 billion by 2025. This is expected to increase to?between $22 and $24 billion by 2026. The majority of this revenue will come from Starlink. Media reports last week claimed that the rocket maker was launching a secondary stock sale, which would put it at $800 Billion. This would make it the second most valuable private company in the world. Musk dismissed these reports on Saturday, calling them untrue. (Reporting from Juby Babu and Echo Wang in Mexico City; editing by Maju Samuel.)
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Atletico rockets up the Champions League rankings with a win over PSV
Atletico Madrid came back from behind to beat PSV Eindhoven by a score of 3-2 on Tuesday and move up to the seventh position in the Champions League rankings. This ensures their progression to 'the knockout stages. After Guus Til had given PSV an early lead, Julian Alvarez?, David Hancko? and Alexander Sorloth took advantage of some sloppy Dutch defending to score. Ricardo Pepe's goal, five minutes before the end, was enough to spur PSV on and force them into a resounding comeback. The crowd was clamoring for the 'home team to win, but despite numerous chances,?PSV couldn't force a dramatic draw. Mark Gleeson, Cape Town; Clare Fallon, editing.
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GE Vernova increases revenue forecasts for 2026 and boosts the share buyback
GE Vernova announced on Tuesday that it expected a?higher level of revenue in 2026 compared to its?forecasts for 2025. This was due to a?strong demand for power. It also increased its share-buyback plan by 4 billion dollars. In after-market trading, the company's shares rose 6.7% to $667.37. The turbine manufacturer increased its share repurchase authority to $10 billion from $6 billion, and doubled its dividend quarterly to 50 cents per share. The demand for grid equipment,?gas and steam turbines and GE Vernova has increased due to the surge in electricity consumption by data?centers devoted to artificial intelligence and cryptocurrency. In October, GE Vernova announced that it would increase its workforce by 5,000. Buy Now The remaining 50% of the transformer manufacturer Prolec GE was acquired for $5.28 Billion, strengthening its North American grid-equipment business. In 2026, the company expects a 16% to 18% growth in organic revenue in its power segment and a 20% increase in its electrification sector. The forecast also includes a free cash flow of between $4.5 billion to $5.0 billion in 2026. This compares with the expectation between $3.5 billion to $4.0 billion in 2025. The company expects revenue to range between $41 billion and $42 billion in the coming year. This compares with an expected $37 billion or $36 billion this year. According to data compiled and analyzed by LSEG, analysts on average expected revenue of $41.4billion for 2026. Reporting by Tanay in Bengaluru, editing by Maju Samuel
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Mexico's Sheinbaum aims for US water deal amid Trump tariff warning
Mexican officials are meeting their U.S. counterparts to discuss water deliveries. The negotiations have heightened tensions between both trading partners, with tariffs threatened if Mexico does not comply. U.S. president Donald Trump accused Mexico on Monday of violating a 81-year old treaty that outlines the sharing of water between neighbors. He threatened to impose a 5% additional tariff on Mexican goods if Mexico did not immediately provide 200,000 acre feet of water by December 31. One acre-foot of water is equivalent to half of an Olympic-sized swimming pool. Mexican President Claudia Sheinbaum, along with other senior officials from Mexico will be meeting virtually with U.S. officials including Agriculture Secretary Brooke Rollins as well as Secretary of State Christopher Landau. Sheinbaum said in her morning presser that she expected the dispute to be resolved. According to the 1944 agreement governing the sharing of water through a?network of dams? and reservoirs?, Mexico is required to deliver 1,75 million acre feet of Rio Grande water every five years. Mexico, the U.S.'s largest trading partner in Latin America, has struggled at times to meet its water deliveries. It cites drought conditions caused by climate change and local demand. Mexican officials claim that the treaty allows for leniency by allowing the 'water debt' to be rolled forward to the next 5-year cycle. This is a source of tension between Mexican and U.S. counterparts, who believe the delayed deliveries are devastating to Texan farmers, who rely on the water to grow their crops. Sheinbaum stated that Mexico's ability to deliver more water is restricted by its?own needs as well as the physical size and length of the pipeline. Ted Cruz, a Republican senator from Texas, said that Mexico has "flagrantly" violated its treaty obligations. The spokesperson stated that "Mexico’s water shortage is a deliberate choice made by the Mexican Government,?not the result of infrastructure or environment shortfalls." Trump threatened tariffs against Mexico earlier this year, and accused them of "stealing water from Texas farmers." Mexico agreed to boost its water deliveries to Texas in April, temporarily settling the dispute that threatened to complicate the ongoing U.S., Mexico, and Canada trade negotiations. (Reporting and writing by Kylie Madry, Aida Pelaez Fernandez; editing by Lisa Shumaker).
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Anglo American, Teck Resources shareholders approve mining merger
Anglo American shareholders and Teck Resources shareholders approved a merger announced earlier on Tuesday, according to the companies. This paved the way for the creation of a new copper giant, with regulatory approvals remaining the last hurdle. Anglo released a statement saying that more than 99.17% votes were cast in favor by Anglo's London-listed shareholders. For the motion to be passed, a simple majority was needed. Teck shareholders have also passed their approval threshold of two thirds. The new company 'Anglo-Teck' will have its headquarters in Vancouver and its primary listing in London. Teck and Anglo-American announced in September their plans for a $53 Billion all-stock merger with no premium. This would create the fifth largest copper producer in the world. Both companies have been undergoing significant restructuring over the past few years, largely due to previous takeover attempts. Copper, an important metal used in the construction and power industries, will benefit from a'surging demand' driven by artificial intelligence and electric vehicles. A wave of takeovers has prompted miners to rush into developing new projects, but no major deal is yet completed. The risk of an outsider was a major obstacle to the deal. BHP, the world's biggest listed miner?made a new approach for Anglo, in November. Meanwhile, activist investors were pushing Rio Tinto towards Teck. The combined entity will?produce more than 1.2 millions metric tons copper per year. By the fourth year following the completion of the tie-up, it is expected that the combined entity will generate annual savings and gains in efficiency worth $800 million. Teck shares fell 0.8% after the shareholder vote. Anglo's shares in London closed 0.5% lower. Both companies will now need to obtain regulatory approvals in Canada, China and key other jurisdictions. The review will be based on national interest and competition, especially given that copper is a critical mineral. (Reporting from London by Clara Denina and Unnamalai L, Bengaluru by Maju Sam and Matthew Lewis).
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EIA raises forecast for US oil production in 2025 to a new record high, as supplies soar
The Energy Information Administration announced on Tuesday that U.S. production of oil is likely to be higher than expected this year. The EIA raised its forecast of 2025 oil production to 13.61 million barrels a day, which is the highest ever recorded. The EIA, however, lowered its estimate for 2026 total production by 50,000 barrels per day to 13.53 millions bpd. The EIA's 'update' in the U.S. production estimate for this year adds to the expectation that oil?markets are heading towards a supply?overhang. The Department of Energy’s statistical arm also raised its oil consumption estimate for?2025 by 100,000 bpd, to 20.6 millions bpd. It forecasts that the demand for 2026 will be flat. The EIA reported that the price of U.S. benchmark West Texas Intermediate oil will average $65.32 a barrel in 2025. This is up from its estimate last week, which was $65.15 a barrel. The EIA forecast that global benchmark Brent prices would average $68.91 per barrel by 2025. This is higher than its November forecast of $68.76. Reporting by Liz Hampton, Arathy S. Somasekhar, Scott DiSavino, and Barbara Lewis in New York.
Stocks are near flat one day before the Fed's announcement; dollar and yields both slightly up
The major stock indices were little altered on Tuesday, and the dollar edged up as investors focused their attention on the Federal Reserve meeting. They also digested the news that Washington has allowed Nvidia to export its second-best chips into China.
Treasury yields rose slightly after U.S. data on the labor market. The dollar extended its gains following the data which showed that U.S. employment increased modestly during October while hiring was subdued. Donald Trump, the U.S. president, said Washington would allow Nvidia to export its H200 processors to China. A 25% fee will be charged for such sales. Nvidia shares fell 0.7%.
Investors expect the Fed to announce a rate cut on Wednesday, but policymakers are expected to remain divided.
It's quiet before the storm. Adam Sarhan of 50 Park Investments, New York, explained that the market is experiencing mild movements because tomorrow's Fed meeting will be a "big catalyst."
According to CME's FedWatch Tool, traders now see an 89.6% probability of a rate cut of 25 basis points this week. The Reserve Bank of Australia had held rates at the same level as expected earlier on Tuesday. The Reserve Bank of Australia, however, ruled out any further policy easing, and warned that the rates could rise if inflation pressures remain stubborn. The Australian dollar rose 0.26% against the greenback to $0.6639.
The dollar index (which measures the greenback in relation to a basket including the yen, the euro and other currencies) rose by 0.15%, reaching 99.22.
Both the Bank of Canada (Canada) and Swiss National Bank (Switzerland) are expected to keep rates unchanged when they meet respectively on Wednesday and Thursday.
The Dow Jones Industrial Average dropped 138.43, or 0.29, points to 47,601.06, while the S&P 500 declined 1.35, or 0.02, points to 6,845.16, and the Nasdaq Composite grew 31.37, or 0.13, points to 23,576.17.
The MSCI index of global stocks fell by 1.04 points or 0.10% to 1,007.00. The pan-European STOXX 600 fell by 0.1%. Isabel Schnabel, a member of the European Central Bank's board, said that even though it was not imminently foreseeable, the next move for euro interest rates would be upwards. She also warned that if rates were left unchanged too long they could lead to a passive easement?of monetary policies.
On the Treasury Market, the yield of the benchmark U.S. 10 year notes increased by 1 basis point, to 4,182% from 4,172% at the end of Monday. Kevin Hassett, White House economist and top candidate to be the next Fed chair, stated on Monday that central banks should "continue to reduce interest rates". This will raise questions as to how the Fed will function in the medium-term.
Investors focused on the peace talks between Russia and Ukraine, which lowered oil prices. Brent crude futures dropped 55 cents or 0.88% to settle at $61.94 per barrel. U.S. West Texas Intermediate Crude fell 63 cents or 1.07% to $58.25.
The yen also weakened on the foreign exchange markets. The yen weakened instantly after a powerful quake that rocked Japan Monday.
(source: Reuters)