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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%.
Oil bulls pull back as stocks remain plentiful: Kemp
Portfolio financiers have soured on the outlook for petroleum rates as a prepared for large depletion of inventories throughout the 3rd quarter has stopped working to materialise.
Hedge funds and other money managers sold the equivalent of 103 million barrels in the six major futures and alternatives contracts over the 7 days ending on July 23.
Combined sales over the last three weeks had amounted to 144 million barrels, according to records submitted with ICE Futures Europe and the U.S. Commodity Futures Trading Commission.
As an outcome, funds had actually cut their net position to simply 380 million barrels (19th percentile for all weeks since 2013) from a current high of 524 million (35th percentile) on July 2.
The most current week saw sales throughout the board in Brent ( -38 million barrels), NYMEX and ICE WTI (-31 million), European gas oil (-21 million), U.S. gasoline (-9 million) and U.S. diesel (-5 million).
Chartbook: Oil and gas positions
The peak summer usage season has already passed the half-way point and there has actually been just a modest exhaustion of stocks up until now.
U.S. stocks of crude oil and refined fuels such as fuel and diesel have remained near long-term seasonal averages in recent weeks.
Adequate inventories have actually sapped some of the incipient bullishness among traders and caused area prices, calendar spreads and fracture spreads to retreat.
Funds stay neutral or slightly bearish about U.S. crude however have actually ended up being very bearish towards Brent and all the refined fuels.
The anticipated recovery in manufacturing throughout The United States and Canada, Europe and China has run out of momentum because the start of April.
And high rates of interest continue to prevent purchases of pricey durable products such as brand-new vehicles, home appliances and electrical equipment.
On the services side, there are likewise indications the post-pandemic rise in travel and tourist has actually peaked as an outcome of high rates and cost-of-living pressure on customers.
The anticipated depletion of international petroleum inventories has already been pushed back several times this year; now it looks like it has actually been postponed once again.
U.S. GAS
Investors acquired futures and choices linked to U.S. gas rates for the very first time in 5 weeks as inflation-adjusted prices dropped pull back towards multi-year lows.
Hedge funds and other cash supervisors purchased the equivalent of 151 billion cubic feet (bcf) of futures and options connected to gas prices at Henry Hub in Louisiana over the 7 days ending on July 23.
Small purchasing followed they had sold 980 bcf over the previous four weeks, according to place records submitted with the futures regulator.
Working gas inventories remain well above average for the time of year and show just restricted if any indication of normalising after a remarkably moderate winter in 2023/24.
Stocks are the second-highest on record for the time of year and still 479 bcf (+17% or +1.35 basic discrepancies) above the prior 10-year seasonal average.
The surplus has actually narrowed gradually regardless of hotter-than-normal temperature levels elevating airconditioning need so far this summer season, slow wind speeds, and low gas rates motivating more gas-fired generation.
The U.S. airconditioning season has actually now passed the normal half-way point restricting the capacity for further exhaustion; working stocks are likely to start the winter heating season higher than average.
The persistent surplus has actually caused front-month futures rates to drop to less than $2 per million British thermal units in an effort to increase gas-fired generation and limit further stock build-up.
After changing for inflation, front-month rates remain in just the 2nd percentile for all months since the start of the century.
Ultra-low rates seem to have actually lured a minimum of some fund managers to book earnings by buying previous bearish brief positions. Short covering represented two-thirds of all the buying in the most current week.
More normally, nevertheless,, the hedge fund community remains extremely mindful about the capacity for a rebound even from the present incredibly low cost level.
Fund supervisors held a net position of just 341 bcf in the two significant contracts, in only the 42nd percentile for all weeks considering that 2010.
Associated columns: - U.S. crude oil prices pull away in the middle of doubts about more stock draw( July 25, 2024). - Oil financiers gain back grace after post-OPEC swoon (July 9,. 2024). - Oil traders expect large inventory draw in 3rd quarter( June. 28, 2024)
John Kemp is a market analyst. The views revealed are. his own. Follow his commentary on X https://twitter.com/JKempEnergy.
(source: Reuters)