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Trump and Takaichi reach agreement on critical minerals, rare earths, and supply
The White House announced that U.S. president Donald Trump and Japan prime minister Sanae Takaichi signed a framework deal on Tuesday to secure the supply of rare earths and critical minerals through mining and processing. Both countries want to strengthen the supply chains of rare earths, which are used in everything from electronics to cars and renewable energy. The statement stated that the U.S., Japan, and other countries will cooperate by using economic policy tools, as well as coordinated investment, to develop a diversified, liquid and fair market for rare earths and critical minerals. China processes 90% of rare earths in the world. It has recently increased export restrictions, adding new elements to its control list. They have also tightened their oversight over foreign producers who rely on Chinese material. In contrast, the U.S. has only one rare earth mine that is operational and is racing to secure minerals essential for electric vehicles and advanced manufacturing. Trump will meet Chinese President Xi Jinping Thursday. In their agreement, the U.S.A. and Japan agreed that they would streamline and deregulate processes and timelines for obtaining permits and securing rare earths and critical minerals, and also address unfair trade practices and non-market policies. The White House added that both countries would look at a stockpiling agreement that would be mutually beneficial and would work with other international partners in order to ensure the security of supply chains. (Reporting from Katya Golubkova and Kanishka in Washington DC, and editing by Himani Sarkar & Stephen Coates).
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Gold returns to $4,000 on the back of a weaker US dollar and rate cuts
Gold prices recovered some lost ground Tuesday, rising over the $4,000 per ounce level. A weaker dollar and expectation of further Federal Reserve rates cuts outweighed the pressure from signs that U.S. China trade tensions are thawing. As of 0141 GMT spot gold was up by 0.7% to $4,009.39 an ounce after falling more than 3% Monday, its lowest level since 10 October. U.S. Gold Futures for December Delivery rose by 0.1%, to $4.022.10 an ounce. Gold buyers who were on the sidelines are now tempted to take positions at these prices. We are also seeing some softness in the dollar which gives gold a reprieve," stated KCM Trade Chief Analyst Tim Waterer. Gold is now cheaper for holders of other currencies due to the dollar index's 0.1% decline. Top Chinese and U.S. economists hammered out the framework for a trade agreement that U.S. president Donald Trump and his Chinese equivalent Xi Jinping will decide on this week. Trump told reporters that he believed a deal with China would be made. He also announced in Malaysia a series of deals with four Southeast Asian countries on minerals and trade. This was the first stop on his five-day Asia tour. If Trump and Xi had a productive trade meeting this week, gold could be swimming against the flow to some extent. Waterer noted that this could be countered if the Fed adopts a more dovish tone in its rate-cutting announcement this week. Investors are waiting for any language from Fed chair Jerome Powell that is forward-looking. The Fed is widely expected to lower interest rates by the end of their policy meeting on Tuesday. Both the European Central Bank (ECB) and the Bank of Japan, are expected to keep rates unchanged this week. The gold price has risen by 53% in the past year. It reached a high of $4,381.21 at the end of October, boosted by economic and geopolitical uncertainty, bets on rate cuts, and central bank purchases. Other than that, silver spot fell 0.3% per ounce to $46.74, platinum dropped 1.2% to 1,571.85 and Palladium dropped 0.8% to $1391.15. (Reporting and editing by Sherry Jac-Phillips, Subhranshu Sahu and Brijesh Patel in Bengaluru).
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Oil drops as OPEC plans to increase output offset US-China trade optimism
The oil prices fell on Tuesday, extending the declines from the previous two sessions. This was due to OPEC's plans to increase output, which offset optimism about a possible U.S. China trade deal. Brent crude futures dropped 4 cents, to $65.58 per barrel at 0106 GMT. U.S. West Texas Intermediate Crude Futures fell 9 cents to $61.22. In a morning report, ANZ stated that traders weighed progress in U.S. China trade talks against the broader outlook of supply. OPEC+ - which includes the Organization of Petroleum Exporting Countries (OPEC) and its allies, including Russia - is leaning toward a modest increase in output for December. Four sources familiar with these talks confirmed this. After reducing production to help support the oil markets for several years, the group began reversing these cuts in April. The prospect of a deal between President Donald Trump and Xi Jinping, the two world's largest oil consumers, who are due to meet in South Korea on Thursday, is expected to support the market. Wang Yi, China's Foreign Minister, told Marco Rubio by phone that Beijing hopes Washington will meet them halfway in order to "prepare high-level interaction" between the US and China. Brent and WTI posted their largest weekly gains in June last week after Trump, for the first time during his second term, imposed sanctions against Russia related to Ukraine, targeting oil companies Lukoil, and Rosneft. Lukoil, Russia's largest oil producer, announced on Monday that it will sell its overseas assets in response to the sanctions. The Russian company has taken the most significant action to date in response to the Western sanctions imposed over Russia's conflict in Ukraine that began in February 2022. The market was shocked by the U.S. decision to sanction two of Russia’s largest oil producers, Rosneft PJSC (PJSC) and Lukoil PJSC (PJSC), which together account for nearly half of Russia’s total crude imports. ANZ said that concerns about a glut of crude oil still remain. Ashitha Shivprasad, Bengaluru (reporting); Sonali Paul (editing)
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Two people killed by explosion in underground mine in Australia
An explosion early Tuesday morning in Australia's New South Wales State killed two workers and injured another. The state's premier referred to the incident as a "sobering" reminder of the dangers in the mining industry. Police said that emergency services were dispatched to Cobar, a remote mining town located 700 km (435 mi) northwest of Sydney. They were informed of a serious workplace accident in which people had been injured. The Australian media reported that the incident took place at the Endeavor Silver, Zinc and Lead Mine, owned by Polymetals Resources Ltd. Polymetals didn't immediately respond to an inquiry for comment. The mine was operational since 1982, but closed in 2020 for maintenance. According to its website, Polymetals purchased the site in 2023. They restarted mining this year. The New South Wales Premier Chris Minns stated that while mining safety has improved greatly, deaths in the industry show that it must remain vigilant at all times. Minns, in a press release, said: "This is an incredibly sad day for the Cobar Community and it will be felt throughout the mining industry." (Reporting from Renju Jose, Sydney; editing by Lisa Shumaker).
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NextEra Energy and Google partner to restart Iowa nuclear power plant
NextEra Energy, a U.S. utility company, and Alphabet’s Google signed a power supply agreement that would help restart Duane Arnold Nuclear Plant in Iowa. After years of stagnation the nuclear industry is experiencing a renaissance. This is due to a massive surge in demand for power as Big Tech searches for cleaner energy sources to power its data centers. After the bell, NextEra Energy shares rose by over 1%. They now stand at $87.24. After 45 years of operation, the Duane Arnold Energy Center with a capacity of 600 megawatts was shut down in 2020. The U.S. has not restarted a fully closed nuclear reactor, but Duane-Arnold would be one of three plants currently in the process. NextEra reported that the Duane Arnold Energy Center in Palo, Iowa is the only nuclear plant in the state. It is expected to be reopened by the first quarter of 2020. The agreement will last 25 years and the tech giant is expected to purchase electricity from the 615 MW plant in order to power its cloud-based AI infrastructure, as well as driving economic investment into the Midwest region. NextEra announced that Central Iowa Power Cooperative, a minority owner of the plant, will buy the remaining output of the plant on the same terms and conditions as Google. NextEra now owns the entire plant. The utility also announced that it has signed agreements with CIPCO and Corn Belt Power Cooperative to purchase their combined 30% stake in Duane Arnold.
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Wall St reaches new highs thanks to tech earnings and US-China trade optimism
Wall Street's major indexes closed at record highs on Monday for the second consecutive day as investors were optimistic about the prospects of a U.S. China trade deal. They also looked forward to an exciting week that will include high-profile earnings from the technology sector and the widely anticipated U.S. rate cut. U.S. president Donald Trump and his Chinese equivalent Xi Jinping will meet on Thursday in order to decide on a plan that could pause the tougher U.S. duties and China's export restrictions on rare earths. This would ease market jitters about a possible trade war, and send Wall Street's VIX "fear gauge", to a month-low. During his weekend TV appearances Scott Bessent, U.S. Treasury secretary, spoke about the agreements reached after two days of talks on trade in Malaysia. These included China purchasing U.S. soya beans and rare-earths. Scott Wren of the Wells Fargo Investment Institute, St. Louis Missouri, commented that Bessent's remarks, along with the upcoming summit, boosted expectations for a easing of U.S. China tensions. The earnings of five of the "Magnificent Seven", namely Microsoft, Apple Alphabet Amazon and Meta, will be released later this week. This will test the durability of the rally in the stock market, which is largely based on the optimism surrounding growth and capital expenditures relating to artificial intelligence. Wren said that "the market expects to see confirmation of all the AI CapEx, revenues and profits coming from AI," with five out of seven Mag Seven reports reporting this week. Preliminary data shows that the S&P 500 rose 82.92, or 1.2%, to 6,874.61 while the Nasdaq Composite grew 431.22 or 1.86% to 23,636.09. The Dow Jones Industrial Average gained 333.87, or 0.71% to 47,540.99. Communication services, consumer discretionary, and technology are all major S&P 500 sectors that have seen a sharp rise. Materials and consumer staples were the laggards. The Philadelphia SE Semiconductor Index has reached a new record high. Qualcomm's shares soared after the company announced two AI chips that will be available in data centers next year. Nvidia, the leader in AI chips, also rose. On the same day, shares of Chinese companies listed in the U.S., including Alibaba Group Holdings, JD.com Holdings, PDD Holdings, and Baidu, also rose. FED RATE FULLY PRICED IN The Federal Reserve's rate-cutting plans are all but set after last week's lower inflation figures. Investors will be watching Jerome Powell for any clues about a December cut as the U.S. shutdown delays key data releases. Keurig Dr Pepper shares rose after raising $7 billion in order to finance the purchase of Dutch coffee giant JDE Peet’s. Lululemon's shares rose after it announced a partnership to launch a clothing collection with the National Football League. Janus Henderson's shares rose after the company confirmed that it had received an acquisition offer from Trian and General Catalyst. After President Javier Milei won the election, shares of Argentine firms listed in the U.S. soared. Reporting by Sinead carew in New York and Pranav Kashyap in Bengaluru. Editing by Pooja desai, Devika syamnath, and Richard Chang.
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Australian financiers establish investment company to tap into strategic metals boom
Former executives of Australia's resources investor Taurus launched on Tuesday a company that could provide funding up to $500m per project in multiple strategic metals projects worldwide. This would help junior miners fill the funding gap. Benwerrin is an investment management firm that aims to boost the supply of metals like copper, which are in high demand for energy transition, data centers, and defence at a moment when the U.S., and its allies, are searching for alternatives to China, the dominant producer. "The 'why now?' There is a market crying out for investment. Martin Boland, Managing Partner at Investec, said that there are a large number of projects across many commodities. Due to U.S. regulations on fund-raising, he could not reveal how much money the firm had available to invest. However, he said that it would target junior and mid-tier miner. He said that private capital will need to fill in the void left by traditional capital providers. Interest in the sector is growing The International Finance Corporation and other government institutions are increasingly seeking to work with resource investors who can help them develop high-risk mining projects. The U.S. government and Abu Dhabi announced last week that Orion Resource Partners in New York, one of the largest mining investment firms in the world, would be receiving $1.8 billion to support global mining projects and refinery. Doug Silver, the co-founder of Orion and an early architect of what is called a mine finance method known as streaming, will be working with Benwerrin as an advisor. Boland stated that the firm evaluates opportunities ranging from the low end, tens and millions of dollars to the upper half of a billion dollar range. The company will invest in the development of base metals such as copper and precious metals. It also makes investments in bulks as well as some industrial metals. However, it won't be investing in metals processing, or in frontier areas such as West Africa. He said, "Africa remains a very attractive investment for us. But we are probably investing a little more selectively now than five years ago." Boland stated that rare earths, which are often highly complex projects with high execution risks, will not be the focus of Boland's attention. Benwerrin is named after an Aboriginal word that means "long hill". It will provide capital primarily for brownfield projects and buyout activities, which are mining sites with existing infrastructure. This can be in the form of loans, or as a return for a stream or royalty. These contracts exchange a percentage of revenue or production for funding. Franco-Nevada, a $37 billion gold mining company in North America, has made them a popular form of capital. Boland is one of the three Taurus employees who have joined Benwerrin. The team will consist of 14 specialists in various sectors, including sustainability, from Perth, Melbourne Vancouver, Toronto, and Denver. Boland stated that mining is attracting investors seeking exposure to inflation linked gains from real assets. He also said that not only certain metals are needed for battery technologies, but a wide range. The energy transition, AI demand profiles, and the need for defense - these are all factors that make people realize the importance of mined commodities. (Reporting by Melanie Burton; Editing by Sonali Paul)
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Wall St reaches new highs thanks to tech earnings and US-China trade optimism
Wall Street's major indexes hit new record highs Monday, as the excitement surrounding a possible U.S. China trade deal set a tone for a busy week of high-profile earnings from technology companies and a widely anticipated interest rate reduction. On Thursday, Donald Trump and Xi Jinping (the Chinese counterpart) will meet to discuss the future of the U.S.-China relationship. A framework This could stop the tougher U.S. Tariffs and China's export restrictions on rare earths. It would also ease market anxiety about a possible trade war, and send Wall Street's VIX "fear gauge", to a month-low. During his weekend TV appearances the U.S. Treasury Sec. Scott Bessent After two days of talks on trade in Malaysia, the United States and China had reached agreements about China purchasing U.S. soya beans and its rare earth exports. Scott Wren said that Bessent’s comments boosted the hopes of easing U.S. China tensions. He is a senior global market analyst at Wells Fargo Investment Institute, located in St. Louis. Five heavyweights " Magnificent Seven The "group" - Microsoft Apple Alphabet Amazon and Meta will test this week the durability of the rally in the stock market, which is largely based on the optimism surrounding growth and capital expenditures relating to artificial intelligence. Wren said that "the market expects to see confirmation of all the AI CapEx, revenues and profits coming from AI," with five out of seven Mag Seven reports reporting this week. As of 2:12 pm ET The Dow Jones Industrial Average increased 214.35, or 0.45% to 47,421.47. The S&P 500 rose 69.51, or 1.02 %, to 6,861.20, and the Nasdaq Composite gained 400.31, or 1.72 %, to 23,604.75. Communication services, consumer discretionary, and technology were the three most active sectors in the S&P 500, while materials and consumer staples lagged behind. Philadelphia SE Semiconductor Index hit a new record high, and was the last to gain 2.5%. Qualcomm's shares soared 13% following the announcement of two AI chips that will be available in data centers next year. Nvidia, the leader in AI chips, rose 2.5%. U.S. listed shares of Chinese companies rose on Monday. Alibaba Group Holdings, JD.com, and PDD Holdings all rose by more than 2%. Baidu gained 5%. FED RATE CUTS FULLY PRICED In Cooler inflation numbers last week have all but sealed the bets that the Federal Reserve will cut rates by 25 basis points on Wednesday. Investors are closely monitoring Chair Jerome Powell’s comments to get clues about a December rate cut as the U.S. shutdown delays key data releases. Tesla, among individual stocks, was up 5.7%. It was S&P 500’s second largest gain behind Nvidia. Keurig Dr Pepper shares jumped by 7% following an increase in its sales forecast. The company raised $7 billion for the purchase of Dutch coffee giant JDE Peet’s. Lululemon's shares rose by 2% following the announcement of a partnership between the company and the National Football League for the launch of an apparel collection. U.S. listed shares of Argentinean companies soared after the election victory of President Javier Milei. YPF grew by 22.5%. Banco Macro jumped 37%. Banco BBVA Argentina and Grupo Financiero Galicia both advanced by around 40%. Janus Henderson's stock soared nearly 13% following the confirmation of an acquisition proposal by Trian and General Catalyst. On the NYSE, there were 529 highs and 63 lows. On the Nasdaq 2,482 shares rose, while 2,137 fell. The ratio of advancing to declining issues was 1.16:1. The S&P 500 recorded 34 new highs for the past 52 weeks and three new lowests, while the Nasdaq Composite registered 123 highs for this period and 48 lows. Reporting by Sinead carew in New York; Pranav Kashyap, Twesha dikshit and Richard Chang in Bengaluru. Editing by Pooja desai, Devika syamnath, and Richard Chang.
Australia retreats as CSL delays spin-off of vaccine division
The Australian share market fell on Tuesday. Biotech giant CSL was the main culprit, as it weighed down the healthcare sub-index. CSL hit a low of nearly seven years after delaying the spin-off of its vaccine division.
By 2353 GMT, the S&P/ASX 200 index had fallen 0.3% to 9,032.40. The benchmark closed Monday 0.4% higher.
The shares of the biotech giant CSL fell as much as 16.6%, to A$176.23. This is their lowest level since December 24, 2018. After the firm announced that it does not expect to complete the spinoff CSL Seqirus by fiscal 2026 due to increased volatility on the U.S. flu vaccine market.
The company was also the biggest loser in the benchmark index, causing the healthcare sub-index to drop as much as 7.9% and reach its lowest level since Nov. 2, 2023.
The technology stocks dropped around 3.6%. WiseTech Global shares fell up to 16.3%, reaching A$71.17. This was their lowest level since 7 April, and they were among the worst performers on the benchmark.
The Australian corporate regulator is investigating the firm, and so are federal police. They executed a search order for documents relating to alleged share trading by the founder Richard White and other employees.
Gold stocks fell 5.6% on the back of falling bullion prices, which were boosted by signs that tensions between the U.S. and China are easing. This reduced gold's appeal as a safe haven.
The gold miners Evolution Mining (formerly Northern Star Resources) and Evolution Mining fell by 4.3% and 3.8% respectively.
The "Big Four" lenders gained between 1.2% to 2.4%, while the banks saw a gain of 1.6%.
Investors in Australia are now waiting for the third-quarter CPI figures, which will be released on Wednesday, before determining how central banks' interest rates will move.
New Zealand's benchmark S&P/NZX 50 was mostly flat at 13,392.44 point.
(source: Reuters)