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Spain investigates steelmaker for violating Israel Sales Ban
The Spanish High Court has opened an investigation into privately owned steelmaker Sidenor, which is accused of selling steel to a firm in Israel for the purposes of manufacturing weapons. This is one of the potential legal consequences that could result from Spain's ban of such deals. According to a statement, Judge Francisco de Jorge will lead the investigation against Sidenor CEO Jose Antonio Jainaga Gomez as well as two other executives. They are accused of smuggling drugs and being complicit in crimes against humanity and genocide. On November 12, they were called to testify. The court ruled that Sidenor sold metal to Israel Military Industries (a subsidiary of Elbit Systems) in a transaction that was allegedly done without the approval or registration by the government. The High Court ruled that the executives "went forward with the deal knowing that (the company) was a producer of both heavy weapons and light weapons and that the materials sold were to be used in the manufacture of weapons." Sidenor didn't respond immediately to a comment request. Elbit Systems refused to comment. The investigation is a result of a complaint that was filed by the Association of the Palestinian Community of Catalonia in July. Spain, which recognized a Palestinian state in Gaza last year, was a vocal critic, describing Israel's actions as genocide multiple times, a charge the Israeli government denies. In September, Spain banned aircraft and ships carrying jet fuel or weapons to Israel from entering Spanish airspace or calling at Spanish ports. This was done to put pressure on Israel to stop its Gaza offensive. It also reinforced the prohibition on Spanish companies selling weapons and materials to Israel. Washington mediated a deal that brought Gaza into a fragile truce on 10 October. The restrictions were maintained. Emma Pinedo, David Latona (Reporting). Emily Rose contributed additional reporting from Jerusalem. Editing was done by Andrei Khalip, Joe Bavier and Joe Bavier.
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China proposes a more stringent plan for steel capacity swaps to curb overcapacity
China unveiled on Friday a proposal to implement a more strict steel capacity swap plan. This comes 14 months after the country halted its old programme, which failed to curb the rapid expansion of the industry, and left it with an overcapacity, which impacted profitability and led to a protectionist backlash. halted The existing steel capacity replacement program will be implemented on August 23, 2024. China's Ministry of Industry and Information Technology issued a statement that said the addition of new capacity to steel in key areas, transfer of capacity from non-key regions to key areas and capacity transfer between key areas were all strictly prohibited. Key areas refer to the Beijing-Tianjin-Hebei and surrounding areas, the Yangtze River Delta region, and the Fenwei Plain, according to the statement. It said that provinces and cities where the country has set clear targets for the total steel capacity of the country are not allowed accept transfer of capacity from another region. For every ton of new steel capacity, at least 1.5 metric tonnes of the old capacity must be removed. More efficient utilization of scrap steel to develop the cleaner electric-arc-furnace-based steelmaking in an organized way and the development of hydrogen metallurgy in appropriate regions are encouraged, it added. Reporting by Amy Lv and Ethan Wang, Editing by Louise Heavens
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European stocks drop as traders await US inflation data
The euro fell on Friday but was still on course for a weekly gain. Meanwhile, the dollar remained steady while market observers waited for U.S. Inflation data. Wall Street closed higher Thursday as the White House confirmed that U.S. president Donald Trump will meet Chinese president Xi Jinping as part of his Asia trip next week. The White House confirmed that Donald Trump would meet Chinese President Xi Jinping next week as part of his trip through Asia. The Shanghai Composite Index, which measures the performance of China's stock market, reached its highest level since August 2015. European markets opened higher but then fell in the course of the session. The pan-European STOXX 600 index was down around 0.2% at 1110 GMT but on track to gain a week. London's FTSE 100 fell by less than 0.1%. The MSCI World Equity Index was flat for the week, resulting in a gain of 1.2%. Wall Street futures are still up. S&P 500 E-minis rose 0.3%, and Nasdaq E-minis gained 0.5%. The U.S. Stock Markets have surged in this year and reached record highs, as traders invest money into artificial intelligent and bet on the U.S. Federal Reserve to continue cutting rates. Analysts claim there are signs that a bubble is forming. Investors awaited U.S. data on inflation, which was delayed because of the government shutdown. Consumer Price Index report (CPI), which is due to be released at 0830 ET (1230 GMT) is expected show that core inflation held steady at 3.1% during September. Next week, the Fed is expected cut rates by 25 basis points. Peter Fitzgerald, Chief Investment Officer for Macro at Aviva Investors, said: "It is a continuation in a generally supportive environment for equity markets where interest rates have been broadly falling across developed markets with Japan being the notable exception. Volatility has begun to drop again after a short spike, and there are no major earnings surprises." He said that it was impossible to know when or how a bull market would end. TRUMP CANCELS CANADA TRADE NEGATIONS The dollar index rose by 0.1% to 99.028, a new high for the day. The Canadian dollar was not affected by Trump's announcement on social media, that he would end all trade negotiations with Canada over what he called a fraudulent advertisement where Ronald Reagan, the late former president of Canada, spoke negatively about tariffs. Dollar-yen at 152.93. The yen fell as the new Prime Minister of Japan pledged to stimulate the economy. The euro remained steady at $1.1612. Data showed that the business activity in the Eurozone grew more rapidly than expected in October. After the data, yields on euro zone government bonds rose. Germany's Bund reached 2.612%. The oil prices that had increased by 5% following the U.S. sanctions against major Russian oil companies have now eased down, but are still on course for a gain of 5% per week. Gold fell around 1.6% per day to $4,058.41 an ounce. It is on course for a weekly decline, ending its winning streak of nine weeks. Bank of America Global Research reported that gold funds received their highest weekly inflow ever in the week ending Wednesday. Apple and Microsoft are among the five companies that will be reporting earnings next week. Intel's earnings beat expectations on Thursday.
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Trilogy Metals reports that key permits for Alaska mining roads have been reissued
Trilogy Metals, a Canadian miner, announced on Friday that the federal government had reissued key permits for a road planned in northwest Alaska to support future mining operations. Trilogy Metals' shares listed in the United States rose by over 8% during premarket trading. These permits were granted by U.S. agencies, including Alaska Industrial Development and Export Authority (AIDEA), the Army Corps of Engineers and Bureau of Land Management. This follows a recent order from the president to restore the approvals that were originally given in 2020. The Ambler mining district, Alaska is home to a trove of minerals and copper. Trilogy CEO Tony Giardini stated that the road would provide access to an area of mining which could strengthen the United States ability to secure supplies of copper, and other essential minerals. The White House announced earlier this month that it would invest $35.6 million in Trilogy Metals. This investment will make the U.S. Government a 10% stakeholder in the miner. The investment included warrants for an additional 7.5% stake. Trilogy, one of the key developers in Ambler, has a joint venture with South32, an Australian company. (Reporting and editing by Krishna Chandra Eluri in Bengaluru, Vallari Srivastava)
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Sources say that Reliance is racing to get orders for battery gear out of China before export restrictions.
Reliance Industries, owned by Indian billionaire Mukesh Amani, is hurrying to ship its battery component orders out of China before new export restrictions are implemented, according to two people who were briefed about the issue. This comes as global concerns grow over how Beijing plans to enforce its expanding export control regime. One source said that a team from Reliance had travelled to China in order to accelerate the work. Reliance, as well as the Ministry of Commerce of China, did not respond when asked for a comment. Due to the sensitive nature of the situation, the people refused to be identified. To maintain its competitive edge, Beijing has introduced new rules that require companies to obtain permission before exporting equipment for the battery supply chain. The new restrictions will take effect on November 8. The second source said that at least a dozen foreign customers in the Chinese battery industry are in the same situation as Reliance. Some of them were sacrificing quality assurance and other final stages of production to expedite the shipment of goods. The second source stated, "Who cares that it hasn't yet been painted or the screws checked?" They are saying that we will do the testing when it lands. Just get it out of the door. CHINA HAS A MAJOR ROLE in BATTERY SUPPLY CHAIN The person said that without the Chinese gear Reliance could not fulfill its plan to locally produce or assemble batteries to store the energy generated by its mega solar project, which is being promoted by the Indian Government to reduce dependence on fossil fuels. According to SNE Research, six of the top 10 battery manufacturers in the world are Chinese. People did not specify which Chinese companies provided Reliance. CATL, China’s largest battery manufacturer, stated in a press release that it is confident exports of its products to overseas factories will proceed smoothly under the newly implemented export regime. The export of materials and equipment needed for our European plants is proceeding as planned, it stated. China exported batteries worth $48 billion in the first eight month of this year. This is up 26% from the same period of last year. China's export of batteries adds to the concern that key technologies can be reliant on Beijing and become the subject of trade disputes. China's export restrictions on rare earths has highlighted the dangers of being dependent on a single supplier. Export controls introduced by China in April led to shortages which threatened to cripple global car production. The second source stated that Chinese battery manufacturers are assuring their foreign customers that there is no need to worry about such drastic changes for batteries. Export licences will be issued quickly and widely in the first few months after the new regime takes effect. In the meantime, foreign companies must play a waiting-game. The first source said, "It's a very tense atmosphere." (Reporting from Lewis Jackson in Beijing, Aditi in Delhi and Zhang Yan in Beijing. Editing by Brenda Goh & Jane Merriman.
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MORNING BID AMERICAS-Tariff Man turns terminator
What the ROI team and Mike Dolan are looking forward to reading, watching and listening to this weekend. Editor's Notes Hello Morning Bid readers! The White House announced on Thursday that Donald Trump will meet with Chinese president Xi Jinping during his Asia trip next week. This boosted Asian equities on Friday. On Thursday, Trump wrote on Truth Social, that negotiations with Canada, another major U.S. trade partner, had been "TERMINATED" because of a "fraudulent ad" showing Ronald Reagan criticizing tariffs. The U.S. signed a trade deal with Australia on Monday, which will invest up to $8 billion in projects that develop and refine metals essential to industries such as defence, advanced manufacturing, and energy transition. Clyde Russell, ROI Asia Commodities columnist, argues that while this deal is not a game changer for the U.S. or its allies in their quest to reduce reliance on China, it is still a good first step. Investors, who were deprived of economic data due to the government shutdown will receive official information on the economy today. The CPI inflation rate for September. It is expected to remain at 3.1% over the past year. As ROI's editor-at-large Mike Dolan points out, the markets will likely shrug off this announcement, since almost no one cares about inflation any more. The job market is what matters, according to Federal Reserve Chair Jay Powell at the FOMC meeting in September. Jamie McGeever, a columnist for ROI markets, argues that the fall in Treasury yields over the past month -- the 10-Year yield dropped below 4% this week -- shows investors are listening to Powell. Intel, among many other companies, reported strong results for the third quarter, while Netflix and Tesla posted disappointing results. Jamie McGeever says that we may be seeing signs of the equity rally expanding. Geopolitics was once again at the forefront of this week's energy markets as President Trump imposed sanctions on two Russian oil companies, Rosneft, and Lukoil, on Wednesday in an attempt to press Russian President Vladimir Putin into agreeing to a ceasefire agreement in Ukraine. Ron Bousso, ROI Energy's columnist, argues that Trump's willingness and ability to enforce secondary sanctions will determine the effectiveness of this measure. Brent crude prices rose over 5% after the announcement, but it is likely that this increase will be short-lived as global oil markets are widely believed to have an oversupply. Ron Bousso points out that the uncertainty around OPEC+'s production should limit any selling. Gavin Maguire, ROI Energy Transition columnist, pointed out that, in terms of fossil fuels, the natural gas consumption of U.S. gas firms is likely to surpass the gas consumption of U.S. consumers for the first time by 2025. This will exacerbate tensions between export-oriented gas companies and domestic gas users. Andy Home, ROI's Columnist for Metals, shares his main takeaways following the recent London Metal Exchange Week. Spoiler alert: everyone loves Doctor Copper. Gold, the most famous of all metals, saw its prices plummet on Tuesday. This was the biggest drop in five years. Gold is up over 50% in this year despite its fall from a record high of $4,300. Check out what the ROI team recommends you read, watch, and listen to as we enter the weekend. Stay informed and prepared for the coming week. This weekend we will be reading... CLYDE RUSSELL. ROI Asia Commodities and Energy columnist. My suggestion for this week is a report by the OECD on Australia's Green Iron Potential. The report outlines both the size of the opportunity and the enormous challenge that comes with funding and coordinating a major shift for the largest iron ore producer in the world. MIKE DOLAN is ROI Financial Markets Editor at Large. This column by Jacob Funk Kirkegaard, of the Peterson Institute, explores the possibility that a fiscal crisis in France - the EU's sole nuclear power - could result in the transference of France's nuclear deterrent cost to the EU. RON BOUSSO is the ROI Energy columnist. This fascinating investigation reveals that dark fleet oil tankers are not only used for dubious Iranian and Russian oil trade. These vessels are being used also by Mexican drug cartels to trade illegal oil and evade taxes in a thriving market. Andy HOME, ROI Metals columnist: The most fascinating thing I read this week was about the underground race that will be held in Boliden’s Garpenberg Zinc mine in Sweden. Participants will run in darkness and complete silence, with temperatures up to 30degC. We're listening... GAVIN MAGUIRE. ROI Global Energy Transition columnist. This is an interesting podcast about the possibilities of EV battery recycling. The plan is to "turn a massive wave incoming of used batteries into a resource for the grid." We're watching... ANNA SZYMANSKI (ROI Editor-in Charge): I know I recommended the World News vodcast to you last week but I am doing it again so that you don't forget the new video version. Opinions are the sole responsibility of the author. These opinions do not represent the views of News. News is bound by the Trust Principles to maintain integrity, independence and neutrality. Want the Morning Bid delivered to your inbox each weekday morning? Subscribe to the newsletter by clicking here. You can find ROI at the website and follow us on LinkedIn or X.
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Copper prices steady after reaching $11,000; weekly gains expected
Copper rose to $11,000 per metric tonne on Friday, before losing momentum. However, it was still on track for a weekly increase amid renewed optimism about trade talks between China and the United States as well as continuing concerns over a lack of supply. As of 0915 GMT, the benchmark three-month copper price on London Metal Exchange had risen 0.3% to $10,886.50. It had risen as high as 1.1% earlier to $10,969 and was close to the 16 month high of $11,000 reached on October 9. This week, the metal used for power and construction is expected to gain 2.6%. John Meyer, analyst at SP Angel, said: "I believe copper will continue to be used... purely due to the developing shortage caused by the mud rush in Grasberg as well as the continued need for copper around the globe and especially in China." Freeport's Grasberg Mine in Indonesia is closed since the September 8 incident. LME Copper Stocks The 136,350 tonnage was the lowest since late July. Meyer said that there is a possibility of a copper squeeze similar to the one in zinc seen this week. Chinese smelters who are playing the London-Shanghai arbitration risk being caught because of a shortage of physical metal. China's Communist Party held its Fourth Plenum Thursday. The party vowed to concentrate on technological innovation, and to boost consumption. Karoline Leavitt, White House Press Secretary, confirmed that Donald Trump and his Chinese counterpart Xi Jinping will meet next Thursday in South Korea. Meyer stated that with gold prices dropping from their record highs, "there's definitely more attention being paid to base metals." Aluminum fell 0.2% to 2,856.50 per ton after reaching $2,883.50 its highest level since May 2022 due to supply concerns. Zinc fell by 0.3% to $3,000, nickel dropped 0.5% to $16,290, while lead rose 0.1% to 2,012.50, and tin increased 0.2% to $3740. (Reporting and editing by Harikrishnan Nair; Additional reporting by Dylan Duan, Lewis Jackson and Vijay Kishore;
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Low spot prices expected due to strong wind supply
Germany's wind production is expected to be strong on Monday, even though it has fallen from the high levels that were expected on Friday. LSEG data showed that the German and French baseload power contracts for Monday were not traded by 0950 GMT Friday. According to LSEG analyst Naser Hachemi, the German residual load was relatively low on Monday, due to a strong wind supply. Thermal availability is also returning. Data compiled by LSEG shows that German wind power production is expected to fall by 6 gigawatts on Monday to 41.8 GW. Meanwhile, French wind power is projected to increase by 1 GW to 13.1 GW. The German solar energy supply is expected to drop by 2.6 GW - 3.6 GW. On Monday, power consumption in Germany will rise by 1.5 GW and reach 57.1 GW. In France, demand is expected to fall by 240MW to 48.3GW. On Sunday, October 26 at 3:00 am, the clocks will be set back one hour, bringing in the winter. The French nuclear capacity fell by five percentage points, to 70% total capacity. Two reactors were taken offline for planned maintenance and Golfech 1, for an unplanned shutdown. Operator EDF reported that the Golfech 1 reactor had been taken offline on Friday morning due to a fault on a power cord in the non-nuclear portion of the facility. The German power contract for 2026 has dropped 0.3%, to 56.15 Euro/MWh. The benchmark contract on the European carbon markets rose by 0.1%, to 78.51 euro per metric ton. $1 = 0.8575 Euros (Reporting and additional reporting by Vera Eckert, Editing by Sahal Muhammad)
Wall St Week ahead-Megacap earnings and Fed meeting to headline a busy US market week
The U.S. Stock Rally faces a potentially significant week in order to maintain its momentum going into the year-end. This includes a flood corporate results, headlined by Megacap Companies and a possible interest rate reduction by the Federal Reserve following its two-day meeting.
Investors may be concerned about the escalation of U.S.-China tensions in the next few days. Meanwhile, the U.S. shutdown continues to cause uncertainty.
The S&P 500 is close to reaching its highest level ever, following a 35 percent increase since April's low. The benchmark index has risen over 14% in the past year.
Chris Fasciano is the chief market strategist of Commonwealth Financial Network. He said that given the fact that the market has been on a rally for several months, without any significant declines, the equities market could continue to be choppy.
Fasciano stated that "what we need to hear is corporate America talk positively about the economy and continue beating earnings." When people get nervous, they are usually when consumer confidence or business confidence is on the decline. The third-quarter earnings season has started well, despite the disappointments of companies like Texas Instruments and streaming service Netflix.
According to LSEG IBES, the profits of S&P 500 companies have risen by nearly 10% compared to a year earlier, based on results reported by 130 companies as of Thursday. As of Thursday, 86% have exceeded analysts' revenue and earnings estimates.
The next week will be the busiest for the season with more than 170 companies reporting. Microsoft, Apple Alphabet Amazon Meta Platforms are five of the seven "magnificent companies" with the largest market capitalizations. Their shares dominate the equity indexes. They have all posted huge profit growth in the last couple of years.
Magnificent Seven's profit advantage over the rest is decreasing, but they are still expected post better results in this period. Tajinder Dhillon is a senior research analyst with LSEG and says that earnings for the group will rise 16.6% compared to an 8.1% increase for the rest.
A number of megacap companies have also been key players in artificial intelligence, which has driven the stock market's performance.
Anthony Saglimbene is the chief market strategist of Ameriprise Financial. He said that these large tech reports will have the biggest impact between now and the year's end. The hurdle rate for these companies is high as they prepare to report earnings next week.
Next week, Visa, Mastercard and Exxon will also be reporting results. When it makes its policy decision on Wednesday, the Fed is expected to reduce its current benchmark rate between 4% and 4.25% another quarter percentage point. The markets will be more responsive to the Fed's Jerome Powell in terms of any future-oriented language. This is because asset prices have already been impacted by this.
Dominic Pappalardo is the chief multi-assets strategist at Morningstar Wealth. He said that if there were any indications from the Fed that it would deviate away from its rate-cutting course, this could have a major impact. The Fed's ability to make decisions may be clouded by the lack of information provided by the federal government since the shutdown began on 1 October, including the delays in the release of employment data at a time when there are growing concerns about the state of the labor markets.
Art Hogan is the chief market strategist for B Riley Wealth. He said that an increasingly prolonged shutdown, which has already lasted more than average in previous shutdowns, also poses a greater risk to economic growth.
Hogan stated that the longer the situation continues, the harder it will be for the market to ignore. Investors had also largely shrugged off trade-related risk in recent months. But renewed U.S. China rifts brought tensions back to the forefront.
Donald Trump, the U.S. president, threatened to impose significantly higher tariffs against China on November 1 after Beijing implemented export controls for rare earths. Investors are watching the developments surrounding the upcoming meeting between Trump, and Chinese leader Xi Jinping to see if tensions can be eased between the two nations.
"If tariffs increase to the levels President Trump has threatened on China, you'd see a volatile and likely a negative reaction in the markets, especially if investors anticipate that this is going to last," Saglimbene stated.
(source: Reuters)