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Wall Street drops as Israel-Iran Conflict hits Risk Attitude
Wall Street's major indexes dropped on Friday, after Israel's deadly attack on Iranian nuclear installations inflamed Middle East tensions and battered the risk sentiment in global markets. Israel warned that these large-scale attacks were just the beginning of a long-term operation to stop Tehran from developing an atomic bomb. Iran has promised to respond harshly. Prices of crude oil soared by nearly 7% amid fears that the conflict in the Middle East could disrupt the supply. Exxon, a major U.S. energy company, rose 1.7%. Fuel costs may rise if there are supply bottlenecks. Delta Air Lines fell 3.7%, United Airlines was down 4.4% and American Airlines was down 4.7%. Lockheed Martin, RTX Corporation and Northrop Grumman all gained between 2.2% to 3.2%. "We are facing major policy uncertainty at home and on top of it, we have geopolitical instability, which is impacting not only oil markets but also the risk premium." said Eric Teal. Chief investment officer, Comerica Wealth Management. Washington claimed it was not involved in the attack, but Donald Trump said that Iran brought the attack upon itself by refusing to comply with U.S. demands regarding its nuclear program. Trump also called on Iran to reach a deal. He said that "the next attacks already planned" would be "even brutaler". The office of Israeli Prime Minister Benjamin Netanyahu said that he would be speaking to Trump later today. 10:13 am At 10:13 a.m. ET, the Dow Jones Industrial Average dropped 659.45, or 1.52% to 42,313.10; the S&P 500 fell 60.38, or 1.0%, to 5,984.88; and the Nasdaq Composite fell 227.71, or 1.16 %, to 19,435.01. Only energy stocks gained 1.2%. Financials fell the most with a fall of 2.1%. Adobe shares weighed on the information technology sector, which lost 1.3%. Adobe's share price fell by 6.6%, despite its raising of its forecast for the full year. The majority of megacaps and growth stocks fell. Apple, Nvidia and Amazon all fell by 1.5%. Visa shares have fallen to a new low, a four-week low. U.S. listed shares of gold mining companies rose in response to a rise bullion price. Newmont rose by 2.2% while AngloGold Ashanti gained 2.1%. The S&P 500 is still 2.6% below the record high it reached earlier in the year. This follows stellar gains in May, driven by positive corporate earnings and a softer stance from Trump on trade. The Nasdaq, a tech-heavy stock, is down about 3.8% from its December closing record high. Investors were calmed by a tame report on consumer prices, data that was softer than expected for producer prices and initial claims of unemployment that were largely unchanged earlier in the week. Federal Reserve policymakers, however, are expected to leave rates unchanged when they meet next week. According to an early estimate, a University of Michigan survey found that consumer sentiment rose to 60.5 in June from 60.5% the month before. On the NYSE, declining issues outnumbered advancing ones by a ratio of 3.88 to 1 and by a ratio of 4.4 to 1 on the Nasdaq. The S&P 500 recorded 8 new 52-week lows, while the Nasdaq Composite posted 18 new highs, and 70 new lowers.
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IEA is ready to tap into emergency oil reserves, but OPEC does not see the need
The West's energy watchdog announced on Friday that it is ready to release its oil reserves if the market experiences shortages as a result of Israel's attack against Iran. This statement was criticized by OPEC, which claimed the statement only created fear on the market. In recent years, the Organization of Petroleum Exporting Countries (OPEC), which represents some of the top oil producers in the world, and the International Energy Agency (IEA), representing oil consumers, have clashed over global oil demand trajectory and the pace of the transition to a clean energy economy. Fatih Birol, the IEA head, said that although the oil market is well-supplied, the agency will be ready to respond if necessary. He added that the agency’s oil security system holds 1.2 billion barrels in strategic and emergency oil reserves. OPEC Secretary-General Haitham Al Ghais criticized Birol's statements, saying that they "raise false alarms and project a sense fear on the market by repeating the need to possibly use oil emergency stock". He claimed that there was no change in the dynamics of the market or supply to "require unnecessary measures". The oil prices rose sharply on Friday after Israel launched a series of attacks across Iran, claiming it had destroyed nuclear facilities and missile factories as well as killed a number of military commanders. This could be the beginning of a long-term operation to stop Tehran from building an atomic bomb. The oil prices rose 7%, the biggest daily increase since 2022, when Russia invaded Ukraine. After the Russian invasion of Ukraine in early 2022, the United States and its allies in coordination with IEA tapped the last emergency oil reserves. This decision was heavily criticized by OPEC at the time. Market participants are concerned that the situation could escalate, resulting in damage to Iran's or its neighbours' energy infrastructure, and a possible blockade of Strait of Hormuz. In September 2019, Iran supported Houthi militias launched a drone strike on Saudi Aramco’s Abqaiq Oil Processing Plant, knocking out 5.7 million barrels per day of Saudi oil production and sending the market into frenzy. The diplomatic ties between Iran and its Gulf neighbours, Saudi Arabia and the United Arab Emirates, have significantly improved since the Abqaiq attack. However there are still concerns about a possible repeat. Helima Croft, an analyst at RBC Capital Markets, said that following the Israeli attack, "oil prices have already spiked...and its ultimate landing will depend on whether Iran revives their 2019 playbook by targeting tankers, pipes, and other key energy facilities in the region."
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Mali expects a partnership with Russia to help stop raw gold exports
The Mali government plans to establish a gold refinery under state control with Russia's Yadran in order to increase bullion revenues, as West African countries strive for higher resource returns amid rising commodities prices. Alousseni Sanou, Minister of Economy and Finance, said that 62% of the new SOROMA-SA company will be owned by the Malian government, while the remaining portion is held by Yadran. Sanou stated that the refinery will be built on five hectares near Bamako airport. It will process 200 tons of oil per year, which is almost four times Mali's present output, currently 50 tons. Sanou, a spokesperson for the company, said that the National Transition Council of Mali approved the shares on Thursday. The company will also assist the miners in complying with the revised code. Mali, Africa’s second largest gold producer, adopted a revised code of mining that increased state stakes, raised gold royalties and required domestic gold processing. This follows similar policies in Burkina Faso and Niger, which shook western investors who are now focusing on Russia and China. According to the Mines Ministry, Mali's gold refineries are not certified by organizations such as the London Bullion Market Association. This forces miners to take their gold to other countries to be processed. According to a senior Mines Ministry official who requested anonymity on the matter, Yadran will help secure certification. This is a major obstacle that prevents Mali's existing refineries accessing global markets. According to a spokesperson for the mines ministry, Assimi Gouta, Mali's leader in the military will commission construction of refinery later this month. (Reporting and editing by Tieoko Diallo; Ayen Deng Bior, Maxwell Akalaare Adombila and Topra Chopra).
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U.S. Steel shares fall as Nippon Steel faces Trump’s challenge over control
Shares of U.S. Steel fell in premarket trade after a Nippon Steel executive said to the Japanese Nikkei that the planned acquisition by the Japanese steelmaker required "a certain degree of management flexibility" for it to proceed, following President Donald Trump's statement that he would exert "total control". The comments indicate that discussions are still ongoing regarding the structure of this deal, which was initially opposed by both then-U.S. president Joe Biden and Trump. Trump stated on Thursday that U.S. Steel will be a "golden share" of the U.S. Trump told reporters in the White House that Americans own 51% of the company. He didn't provide any details about how the arrangement would work. The $14.9 billion agreement was announced for the first time in December 2023, despite opposition from across the political spectrum in the United States. It has been a long and uncertain journey in the past year-and-a half. U.S. Steel's shares dropped 4% on Friday in premarket trade. Trump's public remarks, which range from welcoming a "simple investment" by the Japanese company in U.S. Steel to floating a minority stake for Nippon Steel have caused confusion. Last month, Trump said to reporters that the deal was still awaiting his final approval. It remained unclear whether he would let Nippon Steel take ownership. (Reporting and editing by Anil D’Silva in New York, David Gaffen is based in New York)
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JDR Wraps Up Type Test Qualification of Next-Gen Offshore Wind Cables
JDR Cable Systems (JDR), part of the TFKable Group, has completed two new type test qualifications at 132kV for static and dynamic array cables, supporting the next generation of fixed and floating offshore wind projects.The successful testing marks a critical step in delivering U.K.-manufactured high-voltage cables, ready to support larger turbines and deliver power over longer distances, enabling more efficient and cost-effective offshore wind energy.JDR’s static cable development and testing was supported by a Development Grant from the Offshore Wind Growth Partnership, and produced in collaboration with a leading materials supplier, with extensive testing performed at Offshore Renewable Energy (ORE) Catapult.JDR will manufacture the 132kV cables at its upgraded Hartlepool facility as well as in its new high-voltage cable manufacturing facility in Cambois, near Blyth, Northumberland.To facilitate the installation of next generation offshore wind turbines at 20 MW and above, as well as accommodating increasing distances from shore and greater water depths, the industry requires significantly higher voltage cables.By doubling the voltage of the industry-standard 66kV array cable, JDR’s technology will allow increased transmission between turbines at higher-capacity – a vital factor in continuing to reduce the cost of offshore wind and assist in reducing the impact of clean energy prices for consumers.The successful type test qualification of the fixed foundation 132kV static cable technology is further supported by the successful completion of JDR’s second high-voltage cable development, under the Department of Energy Security and Net-Zero’s Floating Offshore Wind Demonstration Programme.The AHEAD (Advanced High-Voltage Export and Array Dynamic) cable project has demonstrated the viability of 132kV dynamic cables for floating wind applications.A full testing program has been successfully completed, including over 1.5 million tension-bending cycles, thereby validating the reliability of the advanced cable design when subjected to the dynamic motion it will endure in offshore floating applications.“We pride ourselves on providing solutions to the energy sector ahead of time and with our 132kV technology, we will do exactly that.“Dynamic cables for floating wind and advanced 132kV cable technologies are critical for the progressive deployment of both fixed and floating offshore wind, enabling developers to not only deploy larger turbines but also to site floating offshore wind in deeper waters, further offshore. It’s an exciting time for the industry and we are right at the forefront by developing, validating and delivering new solutions for the benefit of the offshore energy industry and electricity consumers,” said Joe Cole, Technology Manager – Power Cables at JDR.As part of its broader strategy to drive innovation in high-voltage subsea technology, JDR is contributing its technical findings to the international standards body CIGRE, helping to inform the evolution of safety standards for higher voltage applicationsIn addition, the company is actively involved in the Carbon Trust’s Offshore Wind Accelerator High Voltage Array Systems project, which supports the development and qualification of 132kV cable technology within the U.K.
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Trump may raise auto tariffs soon to increase US production
Donald Trump, the U.S. president, warned on Thursday that he could soon increase auto tariffs. He argued that this would encourage automakers to accelerate U.S. investment. Trump told a White House audience that he might increase the tariffs in the near future. "The higher the tariff, the more likely they are to build a factory here." The White House has been pressed by automakers to lower the 25% tariffs Trump placed on automobiles. Detroit Three automakers criticised a deal which would reduce tariffs on British cars but not those produced in Canada or Mexico. Trump cited a number of recent announcements, including GM's announcement this week that they plan to invest $4 billion into three U.S. factories and shift some SUV production out of Mexico. He also mentioned a $21 Billion Hyundai Investment announced in March, including a new U.S. Steel Plant. Trump stated that "they wouldn't even have invested a penny if there weren't tariffs. This includes the manufacturing of American steel which is doing well." Mexico announced last month that the average tariff on cars exported from Mexico to the U.S. would be 15% and not 25%, because Washington offers automakers discounts for the value U.S.-made content. Tariffs are putting increasing pressure on automakers' costs. Ford Motor Company and Subaru of America raised prices on certain models in recent weeks due to increased costs from Trump's Tariffs. Ford estimated that tariffs would cost them $1.5 billion over the course of the year. GM reported last month that it has a current exposure to tariffs of between $4 and $5 billion. This includes about $2 billion for the cheaper vehicles GM imports, which are made in South Korea. (Reporting and editing by David Gregorio, Jeff Mason, and David Shepardson)
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Trump unhappy with recent rise in oil price
Donald Trump, the U.S. president, expressed his frustration Thursday over rising oil prices amid concerns about supply due to a potential conflict in Middle East. The global and U.S. prices of oil both rose by more than 4% to their highest level since early April on Wednesday before dropping a little on Thursday. Trump stated at a White House gathering that he did not like the fact that oil prices had risen a bit in the past few days. "It will keep going down, right?" We have the inflation under control. Prices rose on news that the U.S. is moving personnel out of the Middle East in preparation for talks with Iran about its nuclear-related activities. Trump claimed that the U.S. is moving personnel to the Middle East because it "could become a dangerous area". He said that the U.S. wouldn't allow Iran to possess a nuclear device. Tehran claims that its nuclear activities are for peaceful purposes. The increased tensions with Iran have raised the possibility of oil supply disruption. Both sides will meet on Sunday.
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Sources say that a decision on the sale of oil refiner Italiana Petroli is expected by end-June.
Italiana Petroli is in negotiations with three parties interested in purchasing the oil refinery and is expected to make a decision around the end this month on the possible 3 billion euro deal ($3.5 billion). Two sources familiar with the matter confirmed that. Sources previously stated that Gunvor, the global commodity trader, State Oil Company of Azerbaijan, (SOCAR), and the Abu Dhabi-based Bin Butti Group had all made binding offers to purchase 100% of the privately held group. Two sources said that industrial groups from the Middle East had contacted the Italian company in order to express their interest, should the ongoing negotiations fail and the seller decide to reopen the process. The Brachetti-Peretti family is asking for around 3 billion euro, according to sources. Italiana Petroli e Gunvor refused to comment. SOCAR Group and Bin Butti Group did not respond to requests for comment. End-December, the refinery had a net cash balance of 408 millions euros. UniCredit is advising the group. It has a total refinery capacity of about 200,000 barrels a day. The group also operates a network with 4,600 fuel stations. The company increased its fuel storage and refining capacity when it acquired Exxon Mobil Italy assets in late 2023. The company currently owns an Ancona refinery, in eastern Italy, the SARPOM refinery, in Trecate, in the north, and a tolling agreement for the Alma refinery, in Ravenna in the north-east. Trecate produces different types of fuels, including aviation propellants, while the two other plants produce bitumen. Intesa Sanpaolo IMI CIB, an Italian company, advises SOCAR. Rothschild works with Gunvor. (1 euro = 0.8633 dollars) (Reporting and editing by Topra Chopra; Additional reporting by Nailia Bakirova, Baku)
Soccer-Bodo/Glimt stun Lazio in penalty shoot-out to make Europa League semi-finals
Nikita Haikin's crucial save helped Bodo/Glimt to a dramatic penalty shootout victory away from Lazio, on Thursday. They became the first Norwegian team in the Europa League semi-finals where they will play Premier League side Tottenham Hotspur.
Lazio seemed to have done everything they could to win the match, overcoming the two-goal first-leg deficit to lead 3-0. However, a sucker punch goal from Andreas Helmersen in extra-time sent the tie to penalty kicks, where Haikin was the hero.
Lazio took the lead through an excellent flick by Taty Castellanos in the 21st-minute. This set the tone for the rest of the match, as the Italians dominated and the visitors struggled to keep up with their slick passing.
Boulaye Dia scored to give Lazio the 3-2 aggregate lead after 10 minutes of the first half.
Helmersen made a decisive cameo in the second half. He missed a clear chance in the second half stoppage time just before Noslin scored, but he then scored with a powerful header to equalize the score.
Helmersen received a second yellow in the dying moments of the match, which was a nerve-wracking encounter.
The Norwegians were in a bad situation when Dia scored and Jens Petter Haiuge's spot-kick was saved. But Haikin, a Russian born in Israel who spent most of his teenage years living in London, stepped up to the plate.
He saved Loum Tchaouna, watched Noslin shoot wide, and after Bodo scored their next three goals, it was time for Patrick Berg to win the match with his fifth penalty. His family is synonymous with Bodo.
The fairytale was not over yet. Berg had one more twist to add. He blasted his shot high above the bar, and Haikin was called on once again.
His heroics were cemented by his saving of Castellanos’s shot for a 3-2 victory in the shootout, which made them the Norwegian team to reach the final four of a major European tournament. This prompted wild celebrations from the travelling fans as well as the ones at home within the Arctic Circle. (Reporting and editing by Clare Fallon; reporting by Philip O'Connor)
(source: Reuters)