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Yale University considers selling private equity fund interest
Yale University announced on Tuesday that it is exploring the sale of private equity funds and has been advised by Evercore, an investment banking firm. Why it's important In a statement, a Yale spokesperson did not mention the amount or reason of this step. Other universities such as Harvard and Princeton had explored financial options recently due to President Donald Trump’s threats to reduce their federal funding. KEY QUOTES In an email, the university spokesperson stated that the University was exploring the sale of private equity funds and Evercore is advising them in this process. This has been ongoing for several months. "We continue to be committed to private equity as a major component of our investment program, and we continue to make commitments for funds raised by current investment managers. We continue to actively search for new relationships with private-equity firms within the Endowment. By the Numbers Yale's endowment grew to $41.4 billion by June 30, 2024, up from $40.7 billion one year before. According to the annual financial report of the university, the endowment generated a 5.7% return on investment, net fees. Harvard announced earlier this month that it planned to borrow $750,000,000 from Wall Street for contingency planning, while Princeton stated it was considering selling $320,000,000 of taxable bonds. CONTEXT Trump has threatened withholding federal funding for colleges and universities due to pro-Palestinian protests on campus against U.S. allies Israel's military attack on Gaza. He also threatens to do so over a variety of other issues such as climate initiatives and transgender policies, diversity, equity, and inclusion programs. The government's actions have been condemned by rights advocates as an attack on academic freedom and the right to free speech. (Reporting and editing by Sonali Paul in Washington, Kanishka Singh)
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Steel Dynamics posts upbeat quarterly results
Steel Dynamics beat Wall Street expectations for revenue and profit in the first quarter, thanks to higher steel shipments. Steel shipments were a record 3.5 million tonnes, and earnings from the company's metals recycling operations and steel fabrication operations also increased. Mark Millett, CEO of the Steel and Steel Fabrication operations at the company, said that the underlying steel demand had improved during the first quarter. Customer orders were up and backlogs grew throughout the quarter. The Trump administration's tariffs have seen imports decline from recent highs. Fort Wayne, Indiana based company reported net income of $1.44 per shares for the quarter ending March 31. This is down from $584m, or $3.67 a share, one year ago. LSEG data shows that they were ahead of analyst estimates of $1.38 a share. Revenue dropped to $4.37 Billion from $4.20 Billion a year earlier, but was still higher than analysts' expectations of $4.20 Billion. The company's shares were up by 2% after the market closed. Reporting by Aatreyee dasgupta in Bengaluru and Abhinav parmar; editing by Shailesh kuber
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Dollar gains, earnings and U.S. China tariff talks are the focus of attention.
U.S. shares rebounded from Tuesday's loss as investors focused on the earnings. Meanwhile, the dollar rose following comments by U.S. Treasury secretary Scott Bessent in a closed door meeting that he believed there would be a deescalation of U.S. China trade tensions. U.S. Treasury Long-Term Yields dropped after rising on Monday. Bessent described future negotiations with Beijing, as "slogs" that have not yet begun. This was according to someone who heard him speak to investors in a JP Morgan conference. Investor confidence is shaken due to the multi-fronted tariff wars of U.S. president Donald Trump, investors are concerned that this could cause severe disruptions in world trade. The International Monetary Fund slashed Tuesday its growth forecasts in the United States and China, as well as for most other countries. It cited the impact of U.S. Tariffs, which are now at a 100-year high. Investors also assessed Trump's criticisms of Federal Reserve Chairman Jerome Powell on Tuesday. Trump criticised Powell this week for not cutting rates. This raised concerns over Trump's influence on the central bank, and increased concerns about U.S. financial stability. Trump stated last week that he believed Powell would leave his position if Trump asked him to, despite Powell's own statement. Although it is not clear whether Trump has the power to fire Powell. However, lawsuits filed by Trump over other firings are being monitored as possible proxy. Earnings season in the first quarter of 2018 for U.S. firms has picked up. The shares of 3M Co, an industrial conglomerate, rose 8.1% following the company's first-quarter earnings beating expectations. However it warned that tariffs could have a negative impact on its 2025 profits. Alphabet is due to release its results later this week. Stocks are down overall, but this is not a "fire sale" where you should get rid of all your stocks. Oliver Pursche is senior vice president and adviser at Wealthspire Advisors, Westport, Connecticut. All of the soft data (economic data) are deteriorating, but the hard data continue to be strong. Investors are struggling with this, he said. Neel Kazhkari, Minneapolis Fed president, said that the Fed's independence in monetary policy was fundamental and key to better economic results. The Dow Jones Industrial Average increased by 1,016.57, or 2.6%, to 39186.98. The S&P 500 gained 129.56, or 2.51% to 5,287.76. And the Nasdaq Composite increased 429.52 or 2.71% to 16,300.42. Apple gained 3.4%. Tesla shares were up slightly in after-hours trade after the company beat analyst's estimates on total gross margin, but missed revenue estimates. Bitcoin extended its recent gains, resulting in a 8.6% increase for shares of Coinbase Global. Bitcoin rose 4.61% to $81,360.62. The MSCI index of global stocks rose by 12.25 points or 1.56% to 795.36. The pan-European STOXX 600 ended the day up by 0.25%. The dollar gained some ground. The U.S. Dollar Index, which measures greenbacks against six major currencies, rose 0.6% to 98.937 after falling as low as 97.923 the previous session. This was a level that had not been seen since March 20,22. The dollar rose 0.42% to 141.470 yen after falling earlier below the psychological 140 yen level for the first since mid-September. The fear that Trump's policies on trade could cause a U.S. economy to slow down led some investors to purchase U.S. government bond. Benchmark 10-year yields remained at 4,391% on Monday, about 1.5 basis points below the previous day. Gold reached a new all-time record of $3,500.05 in the morning, due to the recent weakness of the dollar and the demand for safe havens. Last, spot gold was at $3.425.91 per ounce. The oil prices rose by more than $1 per barrel as a result of new U.S. Sanctions against Iran, and rising stock market. Brent crude futures gained $1.18 or 1.8% to settle at $67.44. The U.S. West Texas intermediate crude contract for May that expired at Tuesday's settlement rose by $1.23 or 2% to close at $64.32. WTI June, which is more actively traded, also rose 2% to close at $63.47.
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Sam Altman resigns as Oklo Chairman
OpenAI CEO Sam Altman is stepping down as chairman of Oklo's nuclear technology startup, opening the door to a possible tie-up. Shares of Oklo fell more than 11 percent in Tuesday's extended trading. Jacob DeWitte will become chairman of Oklo, the company that aims to build its first small nuclear reactor module by 2027. Caroline Cochran said that the startup would continue to "explore potential strategic partnerships with OpenAI and other leading AI companies", in a press release. Altman's AltC Acquisition Corp., a special purpose acquisition corporation, will acquire Oklo in the U.S. by May 2024. After decades of stagnation interest in nuclear energy has surged. The generative AI boom is driving up power consumption, and businesses around the world are trying to achieve net-zero emissions. Oklo began a Pre Application Readiness Assessment in March with the U.S. Nuclear Regulatory Commission for its Aurora Powerhouse Reactors. This assessment was to be used for the first phase of Oklo’s combined license submission for the reactors. Oklo has signed a nonbinding agreement with Las Vegas data center operator Switch to supply power.
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Phillips, a Democrat, resigns as a member of the US Energy Regulatory Panel
Willie Phillips resigned as a Democratic Commissioner on the U.S. Federal Energy Regulatory Commission on Tuesday. This opened the door for Donald Trump to nominate a new member, giving the five-member commission a Republican majority. The resignation of Phillips, whose term had been set to go through June 30, 2026, allows Trump to nominate a Republican who would likely be easily confirmed by the Republican-controlled Senate. Trump's focus is on increasing oil and gas production and opening pipelines that will bring gas from Pennsylvania into the U.S. Northeast. New York politicians blocked the Constitution Pipeline, which would have transported gas from Pennsylvania. It's unclear what Trump can do to make the pipeline work. Politico reported Phillips' resignation plans before the White House even asked him. Phillips served as chairman under former president Joe Biden. The White House didn't immediately respond to an inquiry for comment. In a press statement, Mark Christie, the Republican Trump appointed as FERC chairman on his first day of office in his second-term, said: "We will miss his presence here at FERC." "I wish him, his family and future success. I'm confident that he will be successful no matter what career path he chooses." Phillips stated in a press release that the grid is facing increasing challenges due to the surge in demand from data centers and a lack of construction for new power plants. Phillips stated, "These complex problems demand bold, creative solutions and I look to continue working on them in my next chapter." (Reporting and editing by Alistair Bell; Timothy Gardner)
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US pays part of the loan to Michigan nuclear plant for restart
The Energy Department announced on Tuesday that a Michigan nuclear reactor, which hopes to be the United States' first to restart after permanent shutdown, has received approximately 10% of the $1.52 billion U.S. funding approved during former president Joe Biden’s term. The Department's Loan Programs Office approved the disbursement of nearly $47 Million of the loan guarantee for the Palisades Nuclear Plant Holtec Inc hopes will reopen this year. The loan guarantee, which was approved by Biden's administration, was a conditional loan that was made to Palisades. This was the second time the Trump administration has disbursed money. The original loan guarantee of more than $150 million has already been paid out. Energy Secretary Chris Wright stated in a press release that the Energy Department was working to ensure America’s nuclear renaissance would be just around the corner. Many politicians, from both major political parties, support nuclear energy as electricity demand is on the rise for the first two decades. This is due to artificial intelligence, cryptocurrency and electric vehicles. Entergy, a Michigan-based power company, closed its 800-megawatt Palisades nuclear reactor in 2022 after it had produced electricity for over 50 years. The plant shut down two weeks earlier than planned due to a problem with a control bar, despite the $6 billion federal program designed to save nuclear power plants from increasing costs. Holtec needs to get permits from the Nuclear Regulatory Commission before they can reopen Palisades. Holtec is currently repairing the steam generators in the reactor, as the standard maintenance procedure was not followed during the shutdown. A source stated that the LPO had hundreds of billions of dollars in available financing. However, the Trump administration will likely use this financing more narrowly than did the Biden administration, and approve loans mainly for nuclear power and the development of critical minerals. About 100 of the 220 employees who worked at LPO have left since Trump's administration.
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United Steelworkers union remains 'unalterably against' US Steel-Nippon agreement
The United Steelworkers told Treasury Secretary Scott Bessent that it is "unalterably opposed" to a $15-billion bid from Japan's Nippon Steel for U.S. Steel or any deal which would give Nippon power over the company. USW President David McCall wrote to Bessent late on Monday, saying that the union didn't believe any of the mitigations proposed during the initial Committee on Foreign Investment in the United States review (CFIUS), which was conducted on the deal. McCall's letter to Nippon Steel Corporation, which was seen by McCall in its entirety, stated that "we remain unalterably against the acquisition of United States Steel by Nippon Steel Corporation." Treasury Department did not immediately respond to a request for comment. McCall stated that the union's concern had grown since former president Joe Biden blocked this deal in January. He noted that Nippon was continuing to engage in practices which fueled global overcapacity, including by holding 1 million tons in China via joint ventures. He said that in a previous administrative review of Non-Oriented Electric Steel from Japan, the U.S. Commerce Department assigned Nippon a preliminary tariff rate of 205% this month. McCall stated that Nippon appeared to be preparing to divest certain U.S. Steel Assets and failed to commit in multiple meetings to maintain production at plants located in Pennsylvania's Mon Valley and elsewhere. Donald Trump, the U.S. president who assumed office for the second term on January 20, stated that he "wouldn’t mind" Nippon Steel taking a minority stake U.S. Steel. This implied he would want to overhaul the deal structure. Last month, he asked CFIUS to review the U.S. Steel all-cash offer to determine whether "further actions" were appropriate. Trump has said repeatedly that he doesn't think a foreign firm should control U.S. Steel. The two companies say they are working with his administration closely to "secure an important investment." (Reporting and editing by Andrea Shalal)
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Investors assess Trump's comments about Fed chief as stocks jump and dollar inch up
The dollar edged up on Tuesday, even as investors assessed U.S. president Donald Trump's criticisms of Federal Reserve Chair Janet Yellen. The yields on U.S. Treasury Long-Term Bonds fell after rising on Monday. Investors were also closely watching the first-quarter results of U.S. firms. The shares of 3M Co, an industrial conglomerate, rose 8% following the company's first-quarter earnings beating expectations. However, it also noted that tariffs would likely affect its 2025 profits. Bloomberg reported that U.S. Treasury secretary Scott Bessent said that a tariff standoff between the United States and China is unsustainable. He expects that the situation will de-escalate. Trump intensified his criticism of Fed chair Jerome Powell, calling him a'major loser' in a Monday social media post. This raised concerns over Trump’s influence on the central bank, and increased concerns about U.S. financial stability. Investors are concerned that the White House may try to replace Powell by someone who will lower rates. Trump stated last week that he believed Powell would leave his position if Trump asked him to, despite Powell's own statement. Although it is not clear whether Trump has the power to fire Powell. However, lawsuits filed by Trump over other firings are being monitored as possible proxy. Stocks are down overall, but this is not a "fire sale" where you should get rid of all your stocks. Oliver Pursche is senior vice president and adviser at Wealthspire Advisors, Westport, Connecticut. All of the soft data (economic data) are declining, but the hard data continue to be strong. Investors are struggling with this, he said. Investor confidence is already shaken by Trump’s constant back and forth announcements about tariffs. They are worried that this could cause a severe disruption to world trade, as well as hurting the economy. The International Monetary Fund slashed their growth forecasts on Tuesday for the United States and China, citing U.S. Tariffs that are now at 100-year levels. The Dow Jones Industrial Average rose by 882.96, or 2.32 %, to 39,053.37. The S&P 500 gained 118.58, or 2.30 %, to 5,279.14. And the Nasdaq Composite gained 425.76, or 2.58%, at 16,296.66. Tesla shares, which are due to announce quarterly results after closing bell, have risen by 5.8%. Apple and other mega-caps were also up, with Apple gaining 3.6%. Coinbase Global shares rose 8.3%, as bitcoin continued its recent gains. Bitcoin's last gain was 4.07%, at $90 887 19. The MSCI index of global stocks rose by 11.73 points or 1.50% to 794.84. The pan-European STOXX 600 ended the day up 0.25%. The dollar has recovered slightly, but is still near its multi-year lows against the euro and Swiss franc. The dollar index (which measures the greenback versus a basket including the yen, the euro and others) rose by 0.49%, to 98.83. However, the euro fell 0.68%, to $1.1435. The dollar gained 0.28% against the Japanese yen to reach 141.24. The dollar and yen had earlier reached a seven-month peak. The dollar gained 1.01% against the Swiss Franc, a safe-haven currency. Analysts noted that the dollar is still fragile, despite concerns about the U.S. tariffs. Gold reached a new all-time record of $3,500.05 in the morning, due to the recent weakness of the dollar and the demand for safe havens. Gold spot was down last by 0.83%, at $3396.43 per ounce. Oil prices rose as a result of new U.S. Sanctions against Iran, and rising stock market. U.S. crude oil rose by 2.85% to $64.88 per barrel. Brent increased to $67.77 a barrel, an increase of 2.28%. The yield on the benchmark 10-year U.S. notes dropped 1.4 basis points from late Monday to 4.391%.
U.S. manufacturing ETFs win possessions as financiers bet on 'reshoring'.
Financiers are piling into exchange traded funds concentrated on business that are restoring or expanding production in the U.S. and benefiting from federal government subsidies.
Some $2.25 billion has streamed into a little group of ETFs highlighting the so-called reshoring theme this year, bringing their total assets to a record $9.67 billion by the end of August.
Companies keep describing reshoring as a long-lasting driver of their development, and our goal is to find beneficiaries or enablers of that pattern before that theme is mainstream, said Chris Semenuk, who oversees the actively managed Tema American Reshoring ETF, introduced last year.
Its possessions have grown from $6 million in May 2023 to $101.5. million as of the end of August. The fund is up almost 16%. year-to-date, compared to a 17.7% gain in the S&P 500.
Manufacturers have been moving production to the United. States to avoid supply chain snarls and duck stress in between. Washington and Beijing that are drying up financial investment in China.
Congress authorized more than $1 trillion in funding for brand-new. facilities projects in late 2021 and passed a costs that. will offer another $200 billion for chips making the. following summer.
A number of prominent corporate moves have actually also assisted. drive interest, including Taiwan Semiconductor Manufacturing. Co's (TSMC) decision to enhance the size of its. investment in brand-new Arizona fabrication plants to $65 billion or. the federal government's award of as much as $500 million to Century. Aluminium to construct the first aluminum smelter in the. U.S. in 45 years.
BlackRock is the current and largest of the ETF suppliers. competing for investor dollars as interest in the reshoring. theme is sustained by the main function the economy and job development. are taking in the U.S. governmental race. It launched the. iShares U.S. Manufacturing ETF in July.
These stocks might benefit whichever celebration wins the. election, Jay Jacobs, head of thematic and active ETFs at. BlackRock, told Reuters in the latest episode of Inside ETFs.. It's an unusual location of consensus throughout the aisle.
Shares of the ETF have actually climbed 3.5% over the last one month. compared with a roughly 0.9% gain for the S&P 500,. according to LSEG. The new BlackRock fund now has nearly $6. million in possessions.
Strong entertainers in the U.S. production sector consist of. Caterpillar and Eaton Corp., which are up 16.4%. and 27.6% year-to-date, respectively. The S&P 500 industrials. sector, home to a lot of the business whose shares are owned by. the ETFs, is up 13.5% this year.
To be sure, an increase of weaker-than-expected financial information. in current months, including an unanticipated dip in U.S. manufacturing construction costs, has raised issues that. U.S. development might be beginning to soften. The Federal Reserve is. expected to cut rates of interest for the very first time in years at. its Sep. 17-18 meeting in a bid to alleviate financial policy ahead of. any prospective economic slowdown.
At the exact same time, some stocks have become more highly valued. as the wider market has rallied. The industrials sector, for. example, is trading at a forward price-to-earnings multiple of. 26.7, compared with 19.2 a year back.
Wonderfully priced chances are rare;. the type of appraisals we saw in early 2020 are not there any. more, stated Jeff Muhlenkamp, supervisor of the $249 million. Muhlenkamp Fund, a mutual fund.
Nor, he added, is reshoring an automatic ticket to. above-average returns. Business expanding or repatriating. producing centers to the U.S. will likely discover themselves. facing higher labor and basic materials costs.
Whether that will slow the strong growth the funds have. experienced this year remains to be seen. Assets in the $1.5. billion First Trust RBA American Industrial Renaissance ETF. , that made its debut in 2014, have actually tripled in the last. 12 months, while those in the $8.04 billion Worldwide X U.S. Infrastructure Advancement ETF, rolled out in 2017,. have actually grown 50% in the exact same period, according to Morningstar.
The latter fund also has seen year-to-date returns of 26.6%,. outpacing the S&P 500, according to LSEG.
Jacobs sees this as just the start.
If anything, this is more of an entry point for financiers,. he said.
(source: Reuters)