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McGeever: ROI-America Inc.'s productivity boom could be global.
The U.S. economic system is experiencing a productivity boom, and it may even be spreading globally. Artificial intelligence will accelerate the trend of technological leaps that have been a hallmark of U.S. efficiency, flexibility and dynamism. However, there are some early signs that AI's benefits may be spreading. The Purchasing Managers' Index (PMI), released on Friday, showed that British businesses have started the year off on a good footing. Demand at home and abroad has been robust since April 2024. The pace of job loss has also increased since December. Since late 2024, the sub-indices of employment in Britain's PMI have been below that threshold which separates expansion from contraction. The UK appears to be increasing the amount of goods produced per hour of work - the textbook definition for productivity growth. The latest German PMI data also revealed a similar picture, albeit a little grainier. The output in January was at its highest level in three months. Employment fell at the fastest rate since November 2009 - excluding pandemic declines. It's true that PMI data doesn't always match up with official statistics on growth and employment, but one shouldn't put too much weight in any single month's results. The burgeoning trend shouldn't be ignored. JP Morgan economist Allan Monks points out that the UK's ratio of output per employee - a crude measure of productivity - has been at its highest level since August 2013 - even if you exclude pandemic distortions. Bruna Skarica, a Morgan Stanley analyst, agrees, writing that "a degree of skepticism is probably warranted around the PMIs, but the dynamics of resilient growth and?sluggish labor demand merits greater attention." LONG-TERM PATIENTISM What is driving this? It's probably the AI and technology frenzy. Businesses are betting that AI can make them more innovative, productive and cost effective. However, it remains to be determined whether AI will enable the rest to the world to close the productivity gap between the United States and the rest. This seems to be a better option in China. China, the world's second largest economy, is already experiencing?significant productivity increases in certain sectors such as autos, steel and high-value manufactured goods. Goldman Sachs economists believe that China's computing capacity is starting to surpass the U.S. and will essentially double over the next five year period. It's another story in Europe. The continent is often viewed as a weak point in the global value-chain, with low productivity and growth potential. Economists attribute this to a lack of innovation in technology, excessive regulation, high public debt, and low private investments. Goldman Sachs economists estimate AI will only add 0.05 points per year to European growth over the next few decades, but this figure will rise to "more significant" 0.2 points per year by 2030. The U.S. will still enjoy only a half of the AI-induced productivity growth that they are expected to experience. PRODUCTIVITY A 'GET OUT OF JAIL FREE' CARD? Federal Reserve Chair Jerome Powell signaled in December that productivity growth can help the central banks reduce inflation, while maintaining a dovish policy to support the economy and labor market. Productivity gains that are faster and more widespread will reduce inflation. If productivity increases accelerate and spread globally, central banks may not have to change interest rates dramatically in order to meet their inflation targets. The flip side is that it could be more difficult to maintain full employment if AI advancements allow economies to thrive with fewer workers. Powell could have more to share on this topic when the Fed meets next week. All of this, of course, should be taken as a pinch of salt. Even at the best times, productivity figures can be a bit shaky and difficult to measure. As the Office for National Statistics' labor market data in Britain was revealed to be flawed last year, so are productivity assumptions. Investors are betting that AI-related global spending will reach trillions of dollars in the next few years. This may be revealed by the earnings of U.S. megacaps such as Meta, Microsoft, and Apple?this week. There are still many unknowns, but there is some evidence that the AI spending could lead to a global economic boom. You like this column? Check out Open Interest, your new essential source for global financial commentary. Follow ROI on LinkedIn and X. Listen to the Morning Bid podcast daily on Apple, Spotify or the app. Subscribe to the Morning Bid podcast and hear journalists discussing the latest news in finance and markets seven days a weeks.
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Brazilian government claims that floods in the Vale mining area have damaged Brazilian rivers
The Minas Gerais government announced on Monday that overflowing water from a Brazilian mining area owned by Vale had caused environmental damage when it reached the Maranhao River. The flooding on Sunday in two separate but nearby areas, both owned by Vale and hit by heavy rain, led to a flood at the site of steelmaker CSN. According to the government of Minas Gerais and the companies, there were no injuries in the incidents near Ouro Preto or Congonhas. Vale will be required to 'implement emergency measures' to clean up the affected area, monitor the river and submit an environmental recovery plan, according to the government of the state. Vale?did not immediately respond to a question about the statement but previously had?said that local communities were not affected. The flooding took place 'on the anniversary of Vale’s Brumadinho Dam burst on January 25, 2019, which unleashed a mud avalanche and ravaged local rivers and communities, killing 270 people. Vale has said there is no link between the accident and tailings dams in the area. Reporting by Fabio Téixeira, Editing by Jamie Freed
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Guyana's economic growth is projected to be 19.3% by 2025, despite a slowdown in the oil sector.
Kemol King GEORGETOWN Jan. 26 - Guyana's economy expanded 19.3% in 2025, despite a lower growth in oil production and exports than in previous years. Finance Minister Ashni Singh announced this on Monday, when presenting the annual budget. Singh stated that the oil sector will grow by 21% in 2025, compared to 57.7% the year before. The non-oil industry is expected to grow by 14.3%. This growth was primarily driven by agriculture, mining and construction, as well as the services sector. Singh stated that "our overall real economic growth continues be supported by strong growth in the oil and gas sector, as well sustained growth across non-oil sectors." The crude oil production in 2025 will total 261.1 million barrels. This is up from the 225.4 million barrels produced in 2024. A consortium led by ExxonMobil began operations in August on its fourth project in the country. The Exxon-led consortium controls all of Guyana's crude oil production. Singh stated that Guyana will export 260 cargos in 2025. Of these, 32 cargos are being shipped by the government, using its share of the oil produced by Exxon. One cargo of crude oil is approximately one million barrels. Oil will continue to be a major driver of growth for the economy in 2026. Production from Guyana's 5th offshore project is due to begin later this year. Exxon increased Guyana's capacity for oil production to over 900,000 barrels a day (bpd), and a new development set to take place this year will aim to further increase production up to 1,15 million bpd. The government is expected to continue to prioritize infrastructure in its budget, using oil revenue to build 40,000 homes within five years and expand road networks throughout the country. Guyana, Latin America's latest oil producer, has in recent years become the fifth largest crude exporter of the region after Brazil, Mexico and Venezuela. (Reporting and editing by Brendan O'Boyle, Daina Beth Solon)
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Urals crude differentials reduce on wider discount at Indian ports
Urals crude differentials were reduced on Monday as discounts for the 'grade' to dated Brent reached their highest levels since 2022 in India. Urals oil cargoes that will be delivered in Indian ports in February are trading at a discount of $10 per barrel compared to dated Brent. This is a rise of $3-$5 per barrelle compared to estimates for cargoes loaded in the autumn months last season and near?the largest discount ever recorded. Three OPEC+ delegates said that OPEC+ will likely keep its pause in?oil production increases for March during a meeting on 'Sunday. Prices are rising because of a decrease in Kazakhstan's crude oil production. Kazakhstan's Energy Ministry said Monday that the vast Tengiz Oilfield in the country is preparing to resume oil production soon, and the production at the Korolevskoye Oilfield has already resumed. PLATTS WINDOW * There were no bids or offers made for Urals, Azeri BTC, and CPC?Blend on Monday, traders reported. Interfax reported that the Russian energy ministry had submitted a request to the government, asking for the lifting of the gasoline export ban. The source was familiar with the issue. (Reporting and Editing by Paul Simao).
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Gold reaches record high of $5,100 due to geopolitical concerns
On Monday, gold prices soared above $5,100 as investors sought refuge amid political turmoil around the world. Silver and platinum also reached record highs. By?12:30 p.m.?ET (1831 GMT), spot gold had risen 2% to $5,077.22 per ounce after reaching a record of $5,110.50. U.S. Gold Futures for February Delivery settled 2.1% higher at $5,000.50. Gold prices are supported by the elevated level of geopolitical uncertainty and economic instability. Central banks continue to be strong buyers, as they diversify their foreign exchange reserves and decrease reliance on the U.S. Dollar," said Ryan McIntyre. McIntyre said that investor inflows have also resumed into exchange-traded physical backed funds, with the holdings up approximately 20% over the past year. TRUMP'S 100% TARIFF THREATEN ON CANADA Donald Trump, the U.S. president, said on Saturday that he would impose 100% tariffs on Canada if they follow through with a trade agreement with China. Adrian Ash, BullionVault's head of research, said that "Trump and Trump" will be the main drivers for precious metals this year. This move is driven by a wave of first-time investors. Private investors in Asia and Europe are leading the charge, as they rush to "build their own personal holdings of silver?and gold." Investors also focused on the possibility of a coordinated currency-intervention by U.S. authorities and Japanese authorities. The criminal investigation by the Trump administration into Fed chairman Jerome Powell is also overshadowing this week's Federal Reserve Meeting, where the central bank will be expected to keep rates unchanged. Powell has been under pressure from Trump to lower interest rates. This would be in support of non-yielding, or non-returning, gold which has gained nearly 18% this year after 64% gain in 2025. Gold reached major milestones last year. It was the first time that gold exceeded $3,000/oz or $4,000/oz. GOLD MAY REACH $6000/oz BY YEAR'S END, SAY SOME ANALYSTS Analysts believe there is room for "further upward momentum". Societe Generale predicts gold will reach $6,000/oz before the end of the year, but cautions that this estimate may be conservative and there is still room for further gains. Morgan Stanley, on the other hand, said that the rally may continue and highlighted a bull case target of $5700. Silver spot reached a record high of $117.69 per ounce, and was last up 10.2% to $113.46. Prices broke through the $100 mark as momentum-driven and retail investor buying pushed the physical market for precious and industrial metals to a tighter state. "Momentum has been strong. Chinese silver prices are at a significant premium over London prices. This indicates that further gains could be made in the near future. But such high prices will reduce industrial demand, said UBS analyst Giovanni Staunovo. Spot palladium rose 5.9% to 2,127.68 dollars, its highest level since 2022.
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Sundance Resources loses in arbitration against the revocation of a Congo iron ore permit
Sundance Resources, an Australian mining company, announced on Monday that a panel of arbitrators had rejected its challenge against what it called Congo's illegal expropriation to subsidiary Congo Iron's mining license in the country's Sangha area. Sundance said?a London tribunal, working under the rules of the International Chamber of Commerce, found that Congo had a valid basis for revocation of the permit, because the project wasn't developed within the allowed period from 2016 to 2018? Sundance?said?a tribunal in London, operating under International Chamber of Commerce rules, found Congo had a legitimate basis to revoke the permit because the project was not developed during the period allowed from 2016 to 2018. David Porter, non-executive chairman of Sundance, said in a statement that the company was "shocked" by this ill-reasoned ICC Award. "We believe that the Tribunal members committed fundamental mistakes and did not allow us to make our case about issues?that were, in fact, central to their decision making?process." Congo's Government revoked Sundance subsidiary, Congo Iron, awarded the permit to Sangha Mining Development in December 2020, a subsidiary from China's Bestway Finance Ltd. This sparked a dispute. In March 2021 the company filed a claim with an international arbitration, seeking damages of $8.8 billion for the Mbalam - Nabeba project. This project straddles both the border of Congo and Cameroon. Sundance Resources stated that it had found "serious irregularities" resulting in "substantial unfairness". The High Court of London was asked to overturn the decision under the English Arbitration Act, 1996. The Republic of Congo didn't immediately respond to an inquiry for comment?in the press release. A decision is expected to be made in the case of a similar one against Cameroon by February or March. Sundance added that "as the Cameroon Case is independent of the Congo Proceedings and before a different tribunal, Sundance doesn't expect the Congo Proceeding to influence or effect the Cameroon Case." Reporting by Bate Felic; Writing by Ayen deng Bior; Editing and editing by Cynthia Osterman
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EU wheat prices fall as fears about damage from winter weather to US and Russian crops diminish
Euronext wheat prices fell on Monday, as fears over damage caused by cold to U.S. crops and Russian crops faded. Meanwhile, a stronger Euro added to the export challenges for Western Europe. At 1656 GMT, March milling grain, the most actively traded?position? on Euronext's Paris based futures was down 1% to 189 euros ($224.65). Euronext monitored a decline in Chicago wheat which had given back some of its gains made on Friday. The arrival of extreme cold weather in the United States had sparked a rally in advance of the weekend. However, traders took the view on Monday that crop losses would be limited in the U.S. Plains due to cover. Prices are dropping because it doesn't seem like there will be much winter-kill. A futures dealer stated that if there was a serious threat, the market would have?probably had another leg up today." The extensive snow cover in Russia tempered concerns over significant damage to the fields in the world's largest wheat exporting country. Euronext was also affected by the rise of the euro against dollar, which made exports of western European grain costlier. The main market for European wheat,?Morocco is being challenged by Argentina. In addition, the abundant rainfall in North Africa is increasing the likelihood that the country will harvest a larger crop and reduce imports. EU farmers are reluctant to sell their crops at low prices and keep cash market premiums high. One German trader stated that "Cheap Argentine Wheat is still winning the demand?and Argentina’s January exports will reach record-high tons." "Argentine Wheat continues to be heavily offered in North African markets such as Algeria?and Morocco which are important EU market." Morocco is still looking for offers to fill February/March shipment slots, and French and Argentine origins are competing fiercely to win Moroccan sales.
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Hungary summons Ukrainian envoy for what PM Orban claims is election meddling
Viktor Orban, Prime Minister of Hungary, said on Monday that Hungary will summon the ambassador of Ukraine over what Orban called attempts to interfere with a Hungarian Parliamentary election scheduled for April 12. Orban's anti-Ukraine campaigns has intensified in recent weeks. He has tried to link opposition leader Peter Magyar from Hungary with Kyiv, the EU executive in Brussels and his campaign. In most polls, Orban's Fidesz Party trails the opposition party?Tisza as Hungary's economic stagnation continues. Orban, in a campaign that primarily targets rural voters, has "portrayed Ukraine as being unworthy of financial assistance, framing April's vote as a decision between war and peace, echoing past anti-migrant efforts. Orban has repeatedly refused European Union aid to Ukraine and launched a national petition asking voters to sign to show they don't want to pay for the conflict. Orban stated in a video that "Last Week, Ukrainian leaders including the president made insulting and threatening remarks against Hungary... Our national security service has... concluded that this is a coordinated attempt to interfere with Hungarian election." The Ukrainian Foreign Ministry did not respond immediately to a comment request. Volodymyr Zelenskiy, the president of Ukraine last Thursday, criticized Europe as a "fragmented" kaleidoscope?of small and middle powers that lacks the courage to take decisive action. He said that Europe shouldn't allow its capitals become "little Moscow". Zelenskiy stated in a Davos speech that "every 'Viktor,' who lives on European money and tries to sell out European interest deserves a smack across the head." (Reporting and editing by Kevin Liffey; Krisztina than)
US Medicare payments to insurers will increase slightly in 2027, but share prices fall
The U.S. government announced on Monday that it would be increasing payments to private insurance companies for Medicare Advantage plans managed by them next year. This will result in an average rate increase of 0.09 percent. Shares of the?companies? fell more than 10 percent.
In after-hours trading shares of UnitedHealth, CVS Health, and Humana fell between 8%-13%, while those of Elevance Health Centene, and Molina Healthcare dropped by nearly 5%.
The update is based on underlying costs trends, quality ratings for 2026, and changes in the risk adjustment model where insurers get paid more if their patients are sicker.
CMS Administrator Mehmet Oz stated that these proposed payment policies will ensure Medicare Advantage is better for those it serves. The agency also wants to modernize the risk adjustment system and protect taxpayers from unnecessary expenditure.
The government anticipates that a?0.09% increase will result in an additional payment of more than $700 millions in 2027.
Kevin Gade is the chief operating officer of Bahl and Gaynor which owns shares in UnitedHealth.
He added that the margins of 2027 and earnings per share for insurers would be affected.
Gade said that he expected to hear more about the impact of proposed rates during UnitedHealth's conference with analysts and investors on Tuesday, after the company announces its fourth-quarter results.
The Wall Street Journal was the first to report this news.
Morningstar analyst Julie Utterback stated that the industry will be looking to see if the agency changes its assumptions before finalizing a rule.
She said that the final rate announcement will be released in a few weeks. The proposed update does not reflect the 2.45% increase the government expects to see in payments for the coding of next year.
Medicare will announce the final rates on April 6, 2019.
Health plans welcome reforms that strengthen Medicare Advantage. Flat funding for the program at a time of high medical costs, and high use of services, will affect seniors' coverage, said Chris Bond, a spokesperson for America's Health Insurance Plans, a trade association.
Bond said that if the proposal is finalized it could lead to benefit cuts and increased costs for 35 million seniors and people who have disabilities renewing their Medicare Advantage plans in October 2026.
Medicare Advantage Plans cover more than half of those enrolled in Medicare, the government program for people 65 years and older who are also disabled.
(source: Reuters)