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US stocks finish mixed; gold surges amid positive IMF forecast and trade tensions
Wall Street ended Tuesday with mixed results and gold reached a new record high, as investors took into account the positive economic outlook from the International Monetary Fund Jerome Powell, Federal Reserve Chair, against a resurgence of U.S.-China Trade Tensions The stock market lost momentum in the late session following U.S. president Donald Trump He posted on social media about his decision. Trade ties can be cut off The Dow recovered from an early sell-off and managed to make modest gains. Crude prices dropped, and the benchmark U.S. Treasury Yields eased. The S&P and Nasdaq ended the session in the negative. Powell stated in a Tuesday speech that the U.S. overall economy "may have a firmer trajectory than anticipated." He also warned that there is no "risk-free policy path as we navigate between the tensions between our employment goals and inflation targets." This echoes an IMF report that raised its global outlook for growth as the shocks from tariffs and financial conditions were less severe than expected. The IMF, however, warned that a trade war between two of the largest economies in the world could have a significant impact on output. Peter Cardillo is the chief market economist of Spartan Capital Securities, based in New York. Tuesday, the U.S. began charging China tit-fortat port charges. The bilateral trade tensions that have roiled the world markets in this year erupted late last week when China tightened its controls on rare earth exports. Trump responded by threatening to raise tariffs on Chinese imports up to triple digits. Bank Earnings Kick Off Earnings Season Upbeat quarterly results by high-profile financial companies including JPMorgan Chase and Goldman Sachs as well as Citigroup, Wells Fargo, and Citigroup kicked off the third-quarter earning season. Cardillo said that if the banks are any guide, this will likely be a good earning season. Cardillo added, "That is another factor that supports the recent highs in the market." The Dow Jones Industrial Average rose 202.88, or 0.44% to 46,270.46. Meanwhile, the S&P 500 dropped 10.41, or 0.16% to 6,644.31, and the Nasdaq Composite declined 172.91, or 0.76% to 22,521.70. Investors watched developments in France where the Prime Minister appeared to be holding off on a major pension overhaul. MSCI's global stock index fell by 2.45 points or 0.25 percent to 978.64. The pan-European STOXX 600 fell 0.37% while Europe's broad FTSEurofirst 300 fell 7.41 points or 0.33%. Treasury yields fell but were still off their lows after Powell's remarks and the IMF revised its growth outlook. The yield of the benchmark 10-year U.S. notes dropped 2.3 basis points from Friday's 4.051% to 4.028%. The yield on 30-year bonds fell 1.1 basis point to 4.6234%, from 4.634% at the end of Friday. The oil prices dropped on the back of trade war fears and a report by the International Energy Agency that raised the prospect for increased supplies while dampening the demand. U.S. crude oil fell 1.33% on the day to settle at 58.70 dollars per barrel. Brent settled at $62.39 dollars per barrel. Due to increased trade-driven risks, the dollar declined while the Swiss Franc and Japanese yen strengthened. The dollar index (which measures the greenback versus a basket including the yen, euro and Swiss franc) fell by 0.26% at 99.04 while the euro rose by 0.31% to $1.1604. The dollar fell 0.37% against the Japanese yen to 151.71. The latest salvo of the Washington-Beijing Trade Spat boosted demand for gold to surpass $4,100. Spot gold increased by 0.75%, to $4140.97 per ounce. U.S. Gold Futures increased 0.77% to $4140.20 per ounce.
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A trade group wants to prohibit the export of scrap aluminium cans to China
A trade group representing aluminum industry demanded on Tuesday a ban on U.S. imports of used beverage containers to China in order to support American productions of cars, fighter planes, tanks, and satellites. The Aluminum Association stated that the United States exports more than 2,000,000 tons of aluminum scrap each year while consuming between 5 and 6 million tons. The group demanded an immediate ban on the export of used beverage containers outside North America for national security reasons, stating that much of U.S. waste flows to China, where it is processed before being shipped back to North America as finished products. The group stated that the U.S. Aluminum industry faces an annual supply gap of approximately 4 million metric tonnes of raw aluminum. They also said it would take many years to become self-sufficient, as well as billions of dollars in addition to accessing a large amount of affordable energy. Nearly half of the scrap aluminum exported by the United States is recycled. The association stated that this is especially concerning because the demand for aluminum in important areas such as cars, planes, and packaging has been growing. In June, President Donald Trump imposed tariffs of 50% on aluminum metal imported to the United States. Canada imports two-thirds the total amount of primary aluminum used in the United States each year. The Commerce Department announced in August that it would be increasing steel and aluminum tariffs for more than 400 products, including auto parts worth $240 billion annually. These parts include electrical steel and automotive exhaust systems needed for electric vehicles, as well as bus components. The U.S. tariffs do not only apply to steel and aluminium, but also to many 'derivatives' made from these metals. (Reporting and editing by Chris Reese, Chizu Nomiyama)
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US stocks are mixed and gold is up as economic forecasts outweigh trade tensions
Wall Street stocks were mixed Tuesday, and Treasury yields fell as investors weighed the upbeat economic outlook from the International Monetary Fund (IMF) and Federal Reserve Chairman Jerome Powell with renewed U.S. China trade tensions. S&P 500, Dow and crude prices all fell sharply after the opening of the three major U.S. indexes. Gold prices, a safe haven, also jumped above $4,100 for the first time. The Nasdaq, which is dominated by tech stocks, remained modestly lower. Powell warned that the U.S. overall economy may be "on a slightly firmer trajectory than anticipated" in a speech he gave on Tuesday. He also said there was no "risk-free policy path as we navigate between our employment goals and inflation targets." This was in line with an IMF report that raised its outlook for global growth as the impact of tariffs and financial conditions has been less than expected. The IMF, however, warned that a trade war between two of the largest economies in the world could have a significant impact on output. Peter Cardillo is the chief market economist of Spartan Capital Securities, a New York-based brokerage. On Tuesday, the United States and China started charging port fees tit for tat. Late last week, bilateral trade tensions that have roiled world markets in recent years erupted after China tightened its controls on rare earth exports. U.S. president Donald Trump responded by threatening to raise tariffs on Chinese products into triple digits. The third quarter earnings season kicked off with positive quarterly results from high profile financial firms such as JPMorgan Chase and Goldman Sachs. Citigroup, Wells Fargo, and Citigroup also reported good results. Cardillo said that if the banks are any guide, this will likely be a good earning season. This is another factor that supports the recent highs in the market. LSEG data show that analysts estimate an aggregate growth rate of 9.2% year-on-year for the S&P500 in the third quarter, up from the 8.8% reported at the start of the month. Official economic data are unavailable as the U.S. shutdown continues due to a partisan impasse in Congress. A National Association of Independent Business survey showed that small business sentiment was deteriorating, as inflation concerns returned to the forefront. The Dow Jones Industrial Average gained 392.34 points or 0.85% to 46,460.87. The S&P 500 rose 18.74 points or 0.28% to 6,673.46. And the Nasdaq Composite dropped 42.25 points or 0.18% to 22,652.35. European stocks closed lower on Friday as renewed U.S. China trade tensions soured investors' sentiment. French tire maker Michelin also cut its annual forecasts, sending its share price to its lowest level in over two years. Investors watched developments in France where the prime minister seemed to be holding off on a major pension overhaul. The MSCI index of global stocks rose by 0.51 points or 0.05% to 981.60. The pan-European STOXX 600 fell by 0.37% while Europe's FTSEurofirst 300 fell by 7.41 points or 0.33%. Emerging market stocks dropped 12.50 points or 0.92% to 1,340.81. MSCI's broadest Asia-Pacific share index outside Japan fell by 1.02% to 695.44. Japan's Nikkei dropped 1,241.48 or 2.58% to 46,847.34. Treasury yields fell but were still off their lows after Powell's remarks and the revised IMF growth outlook. The benchmark 10-year U.S. note yield dropped 2.3 basis points from Friday's 4.051% to 4.028%. The 30-year bond rate fell by 0.6 basis points, from 4.634% to 4.6282% late Friday. The yield on the 2-year note, which is usually in line with expectations of interest rates, dropped 3.9 basis points from Friday's close to 3.483%. The oil prices dropped on the back of trade war fears and a report by the International Energy Agency that raised the prospect for increased supplies while dampening the demand. U.S. crude oil fell 1.33% on the day to settle at 58.70 dollars per barrel. Brent settled at $62.39 dollars per barrel. As trade-related risks increased, the dollar dropped while the Swiss Franc and Japanese Yen strengthened. The dollar index (which measures the greenback in relation to a basket of currencies, including the yen, the euro and others) fell by 0.27%, while the euro rose 0.32%, reaching $1.1605 The dollar fell 0.32% against the Japanese yen to 151.78. Bitcoin fell by 2.13%, to $113.334.48. Ethereum fell 3.91% to $4.121.82. Gold rose above $4,100 on the back of rising expectations for Fed rate cuts, and the safe-haven demand that arose from the latest salvos in the Washington-Beijing Trade Spat. Spot gold increased by 0.88%, to $4146.12 per ounce. U.S. Gold Futures increased 0.32% to $4121.80 per ounce.
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Russian official: Work to restore connection to Zaporizhzhia Nuclear Plant begins this week
On Tuesday, a Russian official announced that the restoration of external power to Zaporizhzhia's nuclear power plant in Russia will begin this week. The station has been operating on diesel generators since it was shut down for three weeks. In the first few weeks of Moscow’s invasion of Ukraine in February 2022, Russian forces captured the Zaporizhzhia Plant. Both sides have accused each other of military actions that led to the collapse of the external line on July 23, 2022. Mikhail Ulyanov is Russia's permanent representative at international organizations in Vienna. He told Russian state news agency RIA that "active preparations are currently underway." We expect that the repair work will begin on both transmission lines by the end of the week. Ulyanov stated that in order to carry out the repairs, it is "essential to agree on local ceasefires in the areas where the work will be carried out". The Vienna-based U.N. Nuclear watchdog International Atomic Energy Agency has repeatedly called for both sides to refrain form actions that compromise nuclear safety. The plant is Europe's biggest with six reactors. It produces no electricity right now, but it needs to produce power in order to keep the fuel cool inside and avoid any possible meltdown. Rafael Grossi, Director General of the IAEA, said that the diesel generators provide the needed power and has worked with both sides to restore the external links. Ukraine's Foreign Minister accused Russia of intentionally severing an external power line at the station to connect it to Moscow's grid. This month, a top Russian diplomat denied that Russia has any intention to restart the plant. (Reporting and Editing by Lisa Shumaker).
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Gold as a safe-haven reaches record highs above $4,100/oz due to Fed rate cuts and trade worries
The gold price surpassed the $4,100 mark on Tuesday. This was boosted by the expectation of a rate reduction this month by the U.S. Federal Reserve, and by investors fleeing to safety following a resurgence in trade tensions with Beijing. As of 1:50 pm, spot gold was up 0.9% at $4,145.85 an ounce. ET (1750 GMT) after reaching a record-high of $4,179.48 in earlier session. U.S. Gold Futures for December Delivery gained 0.7% and settled at $4,163.40. Metal prices have risen by 57% in the past year. On Monday, they broke the $4,100 barrier. The rally was driven by a number of factors including geopolitical uncertainty, the expectation of U.S. rate cuts, central bank purchases and strong ETF inflows. Bank of America analysts and Societe Generale see gold at $5,000/oz by 2026. The uptick in U.S. - China trade tensions, ongoing government shutdown and expectations of more Fed easing all support gold, said Peter Grant. Grant said that U.S. president Donald Trump's threat to impose 100% duties on Chinese products, the roll-out of tit for tat port charges by both of the world's largest economies, and a macro-trend of de-dollarization, could push gold up to $5,000/oz in mid-next-year. Treasury Secretary Scott Bessent announced on Monday that Trump will meet Chinese leader Xi Jinping later this month in South Korea. Gold that does not yield tends to perform well in low interest rate environments. The markets are expecting a 25 basis-point cut in the Fed's rate this month. This will be followed by another reduction of 25 basis points in December. Fed Chair Jerome Powell stated during his speech to the National Association for Business Economics' annual meeting that "based on the data we have, it seems fair to say the outlook for unemployment and inflation has not changed much since the September meeting four week ago." Spot silver, buoyed up by the same factors that drive gold and tightness on the spot market, reached a record high at $53.60/oz, before retracing 0.9%, to $51.86. Palladium rose by 3.2%, to $1,521.50, while platinum fell 0.3%. Reporting by Noel John in Bengaluru, Pablo Sinha, Sherin Elizabeth Varighese, and Anil D'Silva; editing by Anil d'Silva and Sahal Muhammed.
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Integra Capital announces graphite discoveries in Argentina
Integra Capital's general managing director announced on Tuesday that the company, which invests in zinc and led mining assets, had made a graphite find in northern Argentina. Graphite is a component of rechargeable batteries used in electric vehicles. It is listed on the U.S. Geological Survey's draft list of critical minerals to the U.S. national or economic security. China is the world's largest graphite manufacturer, and has restricted supplies of critical minerals for the U.S. Integra's Pablo Tarantini said that a discovery had been made in the Teo project of the Argentinean company, located in La Rioja Province. However, no resource estimations were available. He said, "We have just sent the samples," at a mining seminar in Argentina held on the fringes of LME Week in London. "We've got the right flake, but we have to know how much there is," Tarantini said, adding that the area where the find was made was approximately 10 km in length. He said that the main market would be batteries. Tarantini said that while there are several graphite projects located in Canada, Integra is a firm believer in developing the resources in Latin America in order to supply the U.S. Titan Mining, a Toronto-listed company, announced on Tuesday that it will begin producing graphite at its Empire State Mine in New York State. (Reporting and editing by Paul Simao; Tom Daly)
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Gold as a safe-haven reaches record highs above $4,100/oz due to Fed rate cuts and trade worries
The gold price surpassed the $4,100 mark on Tuesday. This was boosted by the expectation of a rate reduction this month by the U.S. Federal Reserve, and by investors fleeing to safety following a resurgence in trade tensions with Beijing. As of 12:46 pm, spot gold was up 0.8% at $4,143.17 an ounce. After hitting a high of $4179.48 in the earlier session, spot gold rose 0.8% to $4143.17 per ounce as of 12:46 p.m. U.S. Gold Futures for December Delivery gained 0.7% to $4.160.20. Metal prices have risen 57% in the past year. On Monday, they broke the $4,100 barrier. The rally was driven by a number of factors including geopolitical uncertainty, the expectation of U.S. rate cuts, central bank purchases and strong ETF inflows. Bank of America analysts and Societe Generale see gold at $5,000/oz by 2026. The uptick in U.S. - China trade tensions, ongoing government shutdown and expectations of more Fed easing all support gold, said Peter Grant. Grant said that U.S. president Donald Trump's threat to impose 100% duties on Chinese products, the roll-out of tit for tat port charges by both of the world's largest economies, and a macro-trend of de-dollarization, could push gold up to $5,000/oz in mid-next-year. Treasury Secretary Scott Bessent announced on Monday that Trump will meet Chinese leader Xi Jinping later this month in South Korea. Gold that does not yield tends to perform well in low interest rate environments. The markets are expecting a 25 basis-point cut in the Fed's rates this month. This will be followed by another reduction of 25 basis points in December. Fed Chair Jerome Powell stated that "based on the data we have, it's fair to say the outlook for inflation and employment has not changed much since the September meeting four week ago." Silver spot, buoyed up by the same factors that drive gold and tightness on the spot market, reached a record $53.60/oz, before reversing 1.4%, to $51.63. Palladium rose by 3.5%, to 1,523.73, while platinum rose 0.2%, to $1649.50. (Reporting and editing by Anil D’Silva and Sahal Muhammed in Bengaluru, and Noel John and Pablo Sinha, both of Bengaluru)
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Petrobras faces new environmental queries on Foz do Amazonas drilling license
According to documents seen on Tuesday, Brazil's Ibama environmental agency has requested more information from the state-run Petrobras in order to complete the licensing process of drilling in the Foz do Amazonas Basin. A new technical report highlighted "pending issues and uncertainty" in Petrobras emergency and wildlife protection plan. Ibama approved the emergency response test performed by Petrobras back in August but requested adjustments before making a decision on the license. Petrobras issued a statement in which it said that it would "respond to all inquiries from the agency, as it had done since the start of the process, and fully comply with the requirements of environmental licensing procedures." The company said that it has scheduled several technical meetings this week, and is confident that the license will be granted soon. Magda Chambriard, Petrobras' CEO, said that she was surprised at Ibama’s request for more information. She reaffirmed, however, her support for the expansion of oil exploration. Chambriard anticipates that the license will be granted on October 16 and warns that Petrobras may need to purchase a new drilling ship if it is not approved by Oct. 22. Petrobras reported last week that it had incurred standby costs of 180 million reais (32.84 millions) for the drillship whilst awaiting the licence. Since years, the company has sought approval to drill in a region that is believed to have significant reserves. However, it faces opposition due to environmental and social concerns. The oil workers' union (FUP), on Monday, said Petrobras had spent more than 1 billion reais since 2022 on environmental licensing, including 543 millions on rig rentals, 327 millions on vessels, and 142 million on air services.
Italian lobby: China's restrictions on rare earths threaten Europe's automotive industry
The expected new Chinese restrictions on rare earth metals exports may have a significant effect on the European automotive industry, according to the Italian auto parts maker lobby ANFIA, who said Tuesday that reserves of these materials are low.
China, despite an agreement signed in July to expedite shipments into Europe, has tightened its control on rare earth exports. Last week it announced new restrictions.
The country refines the majority of rare earths in the world, which are vital for industries such as semiconductors, automotive manufacturing, and defence.
ANFIA chairman Roberto Vavassori stated that manufacturers were able to maintain their production even when China cut supplies in the previous months. However, reserves of rare-earth metals are now depleted.
Vavassori, speaking at the ForumAutoMotive Conference in Milan, said that "the buffer for reserves is no longer there".
Rare earths are used in the automotive industry for electric motors, and other vehicle components.
Vavassori stated that the rare earth industry is small and worth less than $5 billion worldwide, but it can still slow down the global auto industry. (Reporting and editing by Barbara Lewis; reporting by Giulio P.)
(source: Reuters)