Stocks in Asia declined Wednesday after solid economic readings and higher commodities prices spurred speculation that major central banks will keep interest rates higher for longer. Benchmarks in South Korea and Hong Kong led the region’s decline. Mainland Chinese shares resumed their slide after a report showing expansion in the Caixin purchasing managers’ indexes didn’t provide a fresh catalyst. Contracts on US equities edged lower after the S&P 500 fell 0.7% in Tuesday trading.
Global equities have struggled to build on the strong gains of the previous quarter, with benchmarks gauges from Tokyo to New York largely rangebound this week as investors recalibrate their outlook on interest rates. Pressure on equities followed better-than-estimated data on US job openings and factory goods orders that added to skepticism about the pace of Federal Reserve easing. Swap traders are currently projecting about 65 basis points of rate reductions this year — less than the 75 basis points signaled in the Fed’s latest “dot plot” forecasts. Remarks from Fed Chair Jerome Powell later Wednesday may offer further clues. He will speak after two other Fed officials who vote on monetary policy decisions this year supported the view for cuts this year in Tuesday comments. San Francisco Fed President Mary Daly and her Cleveland counterpart Loretta Mester said they still expect the central bank to lower rates three times in 2024 — though they’re in no rush to begin lowering borrowing costs. Treasuries were flat during Asian hours after further selling pushed yields higher on Tuesday, when the 10-year yield touched the highest level since November. The moves were reflected in Australian yields, which climbed Wednesday. An index of the dollar was little changed. The yen was also flat against the greenback at around 151 per dollar, remaining around the weakest level of the year — keeping alive the possibility of official intervention to the support the currency. Tatsuo Yamasaki, Japan’s former vice finance minister for international affairs, said the government “can step in as soon as the yen falls beyond the current range,” in an interview Tuesday. The yuan, meanwhile, traded close to the weak end of its onshore trading band, the latest sign that a recent slew of upbeat economic data hasn’t been enough to bolster the Chinese currency. In commodities, oil steadied following a rally Tuesday after an industry report pointed to a drawdown in US crude inventories, ahead of an OPEC+ meeting at which the group is expected to affirm current supply cuts. Gold climbed to hold a rally over the past six sessions, while Bitcoin gained to over $66,000. In other corporate news, shares in Taiwan Semiconductor Manufacturing Co. were lower as the company evacuated factory areas following Taiwan’s strongest earthquake in 25 years, casting uncertainty over production at the world’s largest maker of advanced chips. Disney is said to have secured enough shareholder votes to fend off a challenge from Nelson Peltz’s Trian Fund Management LP, according to a Reuters report. Singapore Telecommunications Ltd. said there is no impending deal to sell its Australian phone carrier Optus. US After Hours INTC -3.7% lower as it outlines a new reporting structure, provides historical financial metrics; CALM +6% and PLAY +4.5% higher on earnings.
Nikkei -0.67% Hang Seng -0.90% CSI -0.16% Shanghai -0.07% Shenzen -0.43%
Eur$ 1.0774 CNH 7.2538 CNY 7.2350 JPY 151.60 GBP 1.2578 CHF 0.9081 RUB 92.4750 TRY 32.0813 WTI$ 85.18 +0.04% Gold 2,285 +0.18% BTC 66,036 +0.51% ETH 3,297 +0.77%
S&P -0.18% Nasdaq -0.22% EuroStoxx -0.16% FTSE -0.31% Dax -0.18% SMI -0.29%
Macro :
- Schonfeld Leads Multistrategy Hedge Fund Gains in First Quarter
- Morgan Stanley’s Shalett Says Stay Clear of ‘Overbought’ S&P 500
- Worst Taiwan Quake in 25 Years Levels Buildings (Correct)
- Euro to Suffer From Growth Underperformance: FX Macro Ranking
Keep an eye on :
Keep an eye on :
- AIR FP : Airbus Workers in Canada to Vote on Second Contract Offer Sunday
- BAMI IM : Banco BPM Could Sell Around €500m Bad Loans Portfolio: MF
- DIS US : Disney Gets Votes to Defeat Trian in Proxy Battle, Reuters Says
- GMAB DC : Genmab to Buy ProfoundBio for $1.8 Billion in Cash
- LONN SW : Lonza Proposes 14% Dividend Increase to CHF4.00 Per Share
- MBTN SW : Meyer Burger: 97.54% Take-Up of Shares in Capital Increase
- AERO SW : Montana Aerospace Sees 2024 Sales About EU1.7B
- NOBI SS : Nobia Sees Challenging Coming Quarters Due to Lead Times
- NOBI SS : Nobia Sees Challenging Coming Quarters Due to Lead Times
- OVS IM : OVS Signs Investment Pact to Buy Goldenpoint in Multiple Stages
- RNO FP : CMA CGM Takes 10% Stake in Flexis E-Van Joint Venture
- RSW LN : Siemens Says It Doesn’t Intend to Make an Offer for Renishaw
- CFR SW : Mytheresa May Bid for Richemont’s Yoox Net-a-Porter: FT
- STM FP : Seatrium Secures Vessel Repair & Upgrade Contracts Worth S$350m
- SIE GY : Siemens Says It Doesn’t Intend to Make an Offer for Renishaw
- SKAB SS : Skanska to Replace Seattle’s Portage Bay Bridge For $1.4 Billion
- STLAM IM : Italy March New Car Sales Fall 3.71% Y/y
- SREN SW : Swiss Re CEO Christian Mumenthaler to Step Down
- TSLA US : Tesla Also Losing Ground in China as It Disappoints Globally
- TGS NO : TGS, PGS, SLB Start Penyu Basin Multiclient 3D Seismic Project
- TKA GY : Thyssen Steel to Present Restructuring Details Next Week: Rtrs
- WIN LN : GXO Part-Replaces Wincanton Bridge Facility With New £250m Loan
>>> Up
* FinecoBank Raised to Overweight at JPMorgan; PT 16.30 euros
* JOST Werke SE Raised to Buy at Quirin Privatbank AG; PT 53 euros
* JOST Werke SE Raised to Buy at Quirin Privatbank AG; PT 53 euros
* Rheinmetall PT Raised to 705 euros at Bankhaus Metzler
* Segro Raised to Overweight at Barclays; PT 1,000 pence
* UPS Raised to Buy at Redburn; PT $150
* WDP Raised to Overweight at Barclays; PT 29.50 euros
>>> Down
>>> Down
* Civitanavi Systems Cut to Hold at Berenberg
* Idorsia PT Cut to 1 Swiss franc at Morgan Stanley
* Intrum Cut to Sell at ABG; PT 20 kronor
* Iren Cut to Neutral at Mediobanca SpA; PT 2.70 euros
* Nordic Semiconductor Cut to Sell at Arctic Securities
* Pattern Cut to Neutral at Corporate Family Office; PT 7 euros
* Pattern Cut to Neutral at Corporate Family Office; PT 7 euros
* Rovi Cut to Neutral at Oddo BHF; PT 83 euros
* Tesla PT Cut to $160 from $180 at Cowen
* Verbund Cut to Sell at Stifel; PT 55 euros
>>> Initiation
>>> Initiation
* Eutelsat Reinstated Underperform at Oddo BHF; PT 3 euros
* First Solar Rated New Add at Huatai Research; PT $182
* First Solar Rated New Add at Huatai Research; PT $182
* Hemnet Rated New Outperform at BNPP Exane; PT 440 kronor
* Interparfums Rated New Buy at Stifel; PT 62 euros
* Victrex Reinstated Buy at Investec; PT 1,538 pence
>>> Call
>>> Call
* Infineon Upgraded at Morgan Stanley With Bad News Priced In
* Morgan Stanley’s Shalett Says Stay Clear of ‘Overbought’ S&P 500
* Morgan Stanley’s Shalett Says Stay Clear of ‘Overbought’ S&P 500
* Scandic Cut at Morgan Stanley, Positive on Accor and Whitbread
* Soitec Downgraded at Morgan Stanley on Inventory Correction
After Hours Summary: INTC -3.7% lower as it outlines a new reporting structure, provides historical financial metrics; CALM +6% and PLAY +4.5% higher on earnings
After Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: CALM +6% (also to pay $1/sh dividend), PLAY +4.5% (also increases share repurchase authorization by $100 mln), ADPT +1.3% (guides Q1 revs above consensus; also provides strategic review update; names new CFO),
Companies trading higher in after hours in reaction to news: SGHT +22.2% (announces results of 3-yr prospective GEMINI trial and the cross-over phase of the SAHARA RCT), TVGN +4.7% (to delay 10-K filing), ZNTL +1.8% (to highlight preclinical data on WEE1 Inhibitor Azenosertib), WISH +0.9% (announces post-closing board and mgmt team: Rishi Bajaj appointed CEO, Brett Just promoted to CFO), MCHP +0.5% (names new COO), WFG +0.1% (WFG and MERC to dissolve joint venture),
After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: None
Companies trading lower in after hours in reaction to news: INTC -3.7% (outlines new reporting structure to reflect transition to foundry model; expects Intel Foundry operating losses to peak in 2024; provides historical financial metrics for new reporting segments), EVLV -2.7% (AI gun detectors frequently report false positives, Verge reports), RNA -0.4% (files for 24,255,624 shares of common stock), PNRG -0.3% (to delay 10-K filing), PVH -0.1% (files mixed shelf securities offering), GAMB -0.1% (completes acquisition of Freebets.com), DIS -0.1% (gains more support in boardroom battle with activist investors, according to Reuters; Vanguard votes for incumbent directors, according to Reuters),
Nato plans $100bn ‘Trump-proof’ fund for Ukraine
Proposed five-year military aid package would shield Kyiv from ‘winds of political change’
Nato is drawing up plans to secure a five-year military aid package of up to $100bn, in an attempt to shield Ukraine from “winds of political change” that could usher in a second Trump presidency.
The so-called Mission for Ukraine proposal, which will be discussed by Nato foreign ministers on Wednesday, is being put forward by the secretary-general Jens Stoltenberg.
According to five alliance diplomats briefed on the plan, it would co-ordinate an estimated $100bn in support committed by the 32 members of the military alliance.
Stoltenberg has pitched the proposal as a means “to shield the mechanism against the winds of political change”, according to people briefed on his remarks.
If approved, it would also give the alliance control of the US-led Ramstein weapons support group and allow it to manage the supply of lethal weapons to Ukraine for the first time since Russia’s full-scale invasion in 2022.
The Norwegian secretary-general, who will step down from his role this autumn, is aiming to reach agreement before the Nato leaders’ summit in Washington in July.
“This will be crossing a Rubicon. Nato will have a role in co-ordinating lethal support to Ukraine,” said one of the diplomats. “I see consensus emerging and I think it will be there by the time we get on the plane to Washington.”
The mission proposal comes as the Biden administration struggles to get approval from Congress for a bilateral $60bn Ukraine military support package — which Republican frontrunner Donald Trump has openly spoken against — ahead of the presidential election in November.
Many allies see the stalemate as a harbinger of how US policy towards Kyiv would shift under a Trump presidency.
It has been drawn up as Nato allies fret about the state of the conflict in Ukraine, where Russia has regained the initiative on the ground, outmanning and outgunning Ukrainian forces.
The US share of the $100bn would be significantly less than the bilateral aid package being held up, the diplomats said. Debates are ongoing about the structure of financing, with some pushing for the same breakdown used to fund Nato’s shared budget — under which the US would need to provide a little more than $16bn.
“$100bn for the next five years to support the Ukrainian force of the future,” said the diplomat, who said that the Nato joint budget coefficients could be used to calculate individual shares of the total spending. “It solves a burden-sharing problem.”
It is envisaged as a means both to lock in long-term financing ahead of Trump’s potential election and to give Kyiv a concrete deliverable from the summit, in lieu of progress towards its desired membership of Nato, which is seen as impossible by many alliance members.
“Foreign ministers will discuss the best way to organise Nato’s support for Ukraine, to make it more powerful, predictable and enduring,” a Nato official said, adding that discussions are expected to continue in the run-up to the July summit.
Much of the western weaponry provided to Ukraine is managed by the US-led Ramstein Group, officially known as the Ukraine Defense Contact Group, which meets regularly to discuss how best to co-ordinate bilateral deliveries.
Two of the diplomats cautioned that the proposal would require the backing of all 32 members and there were likely to be months of negotiations ahead, in which parts of the proposal could be scaled back.
One person familiar with the matter described Stoltenberg’s proposal as “fairly nascent” and said allies had asked the Nato chief for more information. The person said there were discussions about Nato becoming more involved in the Ramstein process, but no decision had been made. Meanwhile, questions, such as whether countries’ existing bilateral aid provision would count towards the $100bn, remained.
Some resistance is expected from states that have opposed providing weapons to Ukraine, such as Hungary, and those that have been wary of any steps that would give Nato, or imply, a direct role in the conflict. Russian President Vladimir Putin has sought to portray the conflict as a war between Russia and Nato.
“We are continuing to work with our friends in Europe and Canada to ensure that support [to Ukraine] will keep flowing. That is the focus inside Nato HQ. I don’t see anyone letting their foot off the gas,” said Julianne Smith, US ambassador to Nato. “I see countries coming forward with fresh ideas every week . . . I expect that to be the focus of the ministerial that starts tomorrow.”
Gas pioneer Charif Souki ordered to repay $100mn after loan default
Sales of yacht, ranch and LNG company shares fail to satisfy UBS in multiyear stand-off
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Charif Souki, a pioneer of the US liquefied natural gas industry, has been ordered to repay $100mn to his lenders months after he was ousted from his latest venture.
Souki, who spearheaded the creation of the world’s largest LNG export industry and was once the country’s best-paid executive, has been engaged in a multiyear stand-off with lenders over a loan default that has already cost him his luxury Aspen ranch, his yacht and his shares in Tellurian, the floundering LNG developer he co-founded in 2016.
In an eleventh-hour bid to reverse the situation, Souki had sought to sue his lenders — funds managed by the Swiss bank UBS — arguing they had been “commercially unreasonable” in the manner in which they disposed of collateral, including the shares, which he said would have fetched considerably more if they were sold at an earlier point.
On Monday a Texas judge rejected the claim and said that Souki and his guarantors still owed “at least” $100mn to the secured parties.
“Based on the evidence and applicable law, the Secured Parties acted in good faith and were commercially reasonable . . . in every aspect of disposing the collateral. So Plaintiffs lose on all their claims,” wrote Christopher Lopez, US bankruptcy judge for Texas’s southern district, in his ruling.
The Court also finds that the lenders are still owed at least $100 million in damages,” he added in his ruling on a case that began when several Souki-connected businesses filed for bankruptcy protection last year. A similar case taken by Souki in New York had previously failed.
UBS declined to comment. Souki’s representatives did not respond to a request for comment.
The decision is the latest blow to Souki’s finances that have coincided with a boom in exports of US LNG, an industry he pioneered through his former company Cheniere Energy. Cheniere made the first shipment of LNG from the contiguous US states in 2016 and has been crucial in propelling the country into becoming the world’s biggest exporter of the superchilled fuel.
But Souki has been unable to fully capitalise on the industry’s success. He was sacked from Cheniere before its first cargo set sail after a bitter clash with investor Carl Icahn.
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Gas mogul who redrew energy map clings to Aspen ranch after loans come due
He has failed to repeat the company’s feats at Tellurian, his latest venture, which has struggled to get its $25bn Driftwood project in Louisiana off the ground amid rising costs. Souki was ousted from the company in December.
Tellurian has warned of “substantial doubt” about its ability to continue as a going concern and has said it is exploring a sale. The company’s market capitalisation has collapsed from more than $4bn in 2017 — when shares traded for more than $20 — to less than $500mn on Tuesday.
Souki had argued UBS should have opted to sell his shares in Tellurian in early 2022 when they were trading above $4, and that “8 months of unreasonable delay passed before the Shares were sold”, according to court documents.
But the defendants said that they did not sell the stock until February 2023 because they were “working in good faith to reach a consensual solution with Souki” over the repayments.
Closing Stock Market Summary
The stock market had a weak showing. The S&P 500 (-0.7%), Dow Jones Industrial Average (-1.0%), and Russell 2000 (-1.8%) extended this week's losses while the Nasdaq Composite gave back yesterday's modest gain and then some, sliding 1.0%. The major indices closed off their session lows thanks to some afternoon improvement with no specific catalyst.
Today's selling was driven by normal consolidation activity following a strong start to the year for many stocks. Another jump in market rates as participants continue to rethink rate cuts amid solid economic data and sticky inflation figures also played an integral role in today's trade. The 10-yr note yield rose another four basis points today to 4.37%.
Outsized losses in health insurers also contributed to the negative bias after the CMS left its originally proposed payment rate increase for Medicare Advantage plans for 2024-2025 unchanged at 3.70% against expectations for an increase. Humana (HUM 304.33, -47.12, -13.4%), CVS Health (CVS 73.82, -5.74, -7.2%), and UnitedHealth (UNH 458.14, -31.56, -6.4%) were the worst performing stocks in the S&P 500.
Retailers were another weak area in the market following after disappointing quarterly results and outlook from PVH Corp (PVH 108.68, -31.05, -22.2%) that stirred some uncertainty about consumer spending activity. PVH is not an S&P 500 component, but many retailers pulled back in sympathy and the SPDR S&P Retailer ETF (XRT) settled 2.8% lower.
The S&P 500 health care (-1.6%) and consumer discretionary (-1.3%) sectors were the worst performers today while the energy sector outperformed, jumping 1.3%. This action was related to commodity prices. WTI crude oil futures climbed 1.7% to $85.18/bbl amid geopolitical tension in the Middle East.
- S&P 500:+9.1% YTD
- Nasdaq Composite: +8.2% YTD
- S&P Midcap 400: +7.4% YTD
- Dow Jones Industrial Average: +3.9% YTD
- Russell 2000: +1.9% YTD
Reviewing today's economic data:
- February Factory Orders 1.4% (consensus 1.0%); Prior was revised to -3.8% from -3.6%
- The key takeaway from the report is that there was a pickup in new orders in February for durable and nondurable goods, demonstrating that there has not been a lingering drop-off in demand.
- February JOLT - Job Openings 8.756 mln; Prior was revised to 8.748 mln from 8.863 mln
Wednesday's economic calendar features:
- 7:00 ET: Weekly MBA Mortgage Index (prior -0.7%)
- 8:15 ET: March ADP Employment Change (consensus 150,000; prior 140,000)
- 10:30 ET: Weekly crude oil inventories (prior +3.17 mln)
Nato plans $100bn ‘Trump-proof’ fund for Ukraine
Proposed five-year military aid package would shield Kyiv from ‘winds of political change’
Nato is drawing up plans to secure a five-year military aid package of up to $100bn, in an attempt to shield Ukraine from “winds of political change” that could usher in a second Trump presidency.
The so-called Mission for Ukraine proposal, which will be discussed by Nato foreign ministers on Wednesday, is being put forward by the secretary-general Jens Stoltenberg.
According to five alliance diplomats briefed on the plan, it would co-ordinate an estimated $100bn in support committed by the 32 members of the military alliance.
Stoltenberg has pitched the proposal as a means “to shield the mechanism against the winds of political change”, according to people briefed on his remarks.
If approved, it would also give the alliance control of the US-led Ramstein weapons support group and allow it to manage the supply of lethal weapons to Ukraine for the first time since Russia’s full-scale invasion in 2022.
The Norwegian secretary-general, who will step down from his role this autumn, is aiming to reach agreement before the Nato leaders’ summit in Washington in July.
“This will be crossing a Rubicon. Nato will have a role in co-ordinating lethal support to Ukraine,” said one of the diplomats. “I see consensus emerging and I think it will be there by the time we get on the plane to Washington.”
The mission proposal comes as the Biden administration struggles to get approval from Congress for a bilateral $60bn Ukraine military support package — which Republican frontrunner Donald Trump has openly spoken against — ahead of presidential elections in November.
Many allies see the stalemate as a harbinger of how US policy towards Kyiv would shift under a Trump presidency.
It has been drawn up as Nato allies fret about the state of the conflict in Ukraine, where Russia has regained the initiative on the ground, outmanning and outgunning Ukrainian forces.
The US share of the $100bn would be significantly less than the bilateral aid package being held up, the diplomats said. Debates are ongoing about the structure of financing, with some pushing for the same breakdown used to fund Nato’s shared budget — under which the US would need to provide a little over $16bn.
“$100bn for the next five years to support the Ukrainian force of the future,” said the diplomat, who said that the Nato joint budget coefficients could be used to calculate individual shares of the total spending. “It solves a burden-sharing problem.”
It is envisaged as a means both to lock in long-term financing ahead of Trump’s potential election and to give Kyiv a concrete deliverable from the summit, in lieu of progress towards its desired membership of Nato, which is seen as impossible by many alliance members.
“Foreign ministers will discuss the best way to organise Nato’s support for Ukraine, to make it more powerful, predictable, and enduring,” a Nato official said, adding that discussions are expected to continue in the run-up to the July summit.
At present, much of the western weaponry provided to Ukraine is managed by the US-led Ramstein Group, officially known as the Ukraine Defense Contact Group, which meets regularly to discuss how best to co-ordinate bilateral deliveries.
Two of the diplomats cautioned that the proposal would require the backing of all 32 members and there were likely to be months of negotiations ahead, in which parts of the proposal could be scaled back.
One person familiar with the matter described Stoltenberg’s proposal as “fairly nascent” and said allies had asked the Nato chief for more information. The person said there were discussions about Nato becoming more involved in the Ramstein process, but no decision had yet been made. Meanwhile questions — such as whether countries’ existing bilateral aid provision would count towards the $100bn — still remained.
Some resistance is expected from states that have opposed providing weapons to Ukraine, such as Hungary, and those that have been wary of any steps that would give Nato, or imply, a direct role in the conflict. Russian President Vladimir Putin has sought to portray the conflict as a war between Russia and Nato.
“We are continuing to work with our friends in Europe and Canada to ensure that support [to Ukraine] will keep flowing. That is the focus inside Nato HQ. I don’t see anyone letting their foot off the gas,” said Julianne Smith, US ambassador to Nato. “I see countries coming forward with fresh ideas every week . . . I expect that to be the focus of the ministerial that starts tomorrow.”