Factors to watch in UK stocks on May 17

May 17 (Reuters) – Britain’s FTSE 100 index is seen opening lower on Wednesday, with futures FFIc1 down 0.37%.

* BRITISH LAND: Property firm British Land Co Plc reported a drop in its property valuations, as elevated levels of interest rates and broader economic worries dented sentiment in the commercial real estate sector.

* JD SPORTS: JD Sports Fashion Plc said it expected profit to exceed 1 billion pounds for the first time this year as its offer of trainers, joggers and hoodies continues to chime with young shoppers.

* EXPERIAN: British credit data firm Experian Plc EXPN.L said it expects its annual organic revenue to grow between 4% and 6% on the back of steady demand from businesses and consumers.

* MITCHELLS & BUTLERS: Mitchells & Butlers PLC said its cost outlook in the medium term was improving, while the British pub group reported a rise in sales growth for the past six weeks.

* SAGE: Sage, a British provider of software to small and medium-sized companies, upgraded its full-year organic recurring revenue growth forecast to around 11% after a strong first half.

* SHELL: Shell Plc will use AI-based technology from big-data analytics firm SparkCognition in its deep sea exploration and production to boost offshore oil output, the companies said.

* LSEG: An investor consortium including U.S. buyout firm Blackstone and Thomson Reuters, the publisher of Reuters News, is looking to sell around USD 3 billion worth of shares in the London Stock Exchange Group.

* Britain’s FTSE 100 erased earlier gains and closed lower on Tuesday, as losses in financial and energy stocks coupled with weakness in China-exposed firms weighed.

* For more on the factors affecting European stocks, please click on:

(Reporting by Muhammed Husain and Anandita Mehrotra in Bengaluru; Editing by Dhanya Ann Thoppil)

Gold steady, rival dollar caps gains with US debt deal in focus

May 17 (Reuters) – Gold prices steadied on Wednesday with gains capped by a firmer dollar, as investors fretted over prolonged US debt-limit negotiations.

Spot gold was little changed at USD 1,988.29 per ounce by 0653 GMT. US gold futures steadied at USD 1,992.20.

Rival safe-haven dollar held firm on the day, making gold less appealing for overseas buyers.

Bullion has been well supported on price dips below USD 2,000 and with the debt ceiling “process dragging-on, there is some pent-up frustration in the market which is adversely affecting sentiment”, and that could bring safe-haven flows into gold, Tim Waterer, chief market analyst at KCM Trade said.

US President Joe Biden and top congressional Republican Kevin McCarthy edged closer to a deal to avoid a looming US debt default, as the threat of an economic nightmare prompted Biden to cut short an Asia trip this week.

Bullion slipped from the USD 2,000 level on Tuesday after US retail sales and hawkish remarks from Federal Reserve officials drove bets that interest rate cuts may be delayed.

Higher rates blunt the non-yielding bullion’s appeal.

“Any inflation-fighting rhetoric from Fed officials between now and the June meeting would hinder the gold price,” Waterer further said, adding, the prevailing dollar strength was capping gold’s upside for the time being.

Traders are currently pricing in a 78.6% chance of the U.S. central bank holding rates in June, according to the CME FedWatch tool.

Separately, a resolution of the debt crisis will momentarily see some selling in gold, while in case of a default, “there is no telling how high gold will scream,” said Clifford Bennett, chief economist at ACY Securities.

Among other precious metals, spot silver was flat at USD 23.73 per ounce after hitting a six weeks low in the previous session.

Platinum rose 0.6% to USD 1,063.90 per ounce, and palladium was little changed at USD 1,501.45.

(Reporting by Arundhati Sarkar in Bengaluru; Editing by Sherry Jacob-Phillips, Uttaresh Venkateshwaran, Varun H K and Louise Heavens)

Oil dips on demand worries after unexpected US crude build

TOKYO, May 17 (Reuters) – Oil prices fell for a second day on Wednesday after a surprise rise in US. crude inventories stoked demand concerns on the heels of weaker-than-expected economic data from the United States and China, the world’s two biggest oil consumers.

Brent crude futures slipped 49 cents, or 0.7%, to USD 74.42 a barrel. US West Texas Intermediate crude was down 55 cents, or 0.8%, to USD 70.84 at 0657 GMT.

“Crude prices remain heavy as energy traders just can’t shake off global demand concerns. It doesn’t matter how upbeat everyone is for China’s second half of the year, the current situation is too disappointing,” said Edward Moya, an analyst at OANDA.

US crude stockpiles rose by about 3.6 million barrels in the week ended May 12, according to market sources citing American Petroleum Institute figures. Seven analysts polled by Reuters, had expected a 900,000 barrel drawdown.

US government data on crude and product stockpiles is due at 1430 GMT.

The crude inventory build added to concerns about US growth after data showed retail sales rose 0.4% in April, short of estimates for an increase of 0.8%.

Talks on raising the US debt ceiling continue to weigh on the market. The US Treasury Department has estimated that the United States will go into a crippling default as early as June 1 if Congress does not lift the ceiling.

In China, April industrial output and retail sales growth undershot forecasts, suggesting the economy lost momentum at the beginning of the second quarter.

“Sentiment soured amid stalled US debt ceiling talks and disappointing retailers’ earnings overnight. Recession fears again dragged on the global markets,” said Tina Teng, an analyst at CMC Markets.

Markets are closely following any new steps on expanding sanctions on Russia by the Group of Seven (G7) leaders when they meet in Japan on May 19-21.

The G7 is looking to target sanctions evasion involving third countries, aiming to limit Russia’s future energy production and curb trade that supports Russia’s military, officials with direct knowledge of the discussions have said.

(Reporting by Katya Golubkova Editing by Sonali Paul and Mark Potter)

Oil settles up USD 2 on optimism about US debt ceiling, demand

May 17 (Reuters) – Oil prices settled up about USD 2 on Wednesday as optimism over oil demand and US debt ceiling negotiations outweighed worries about abundant supply.

Brent crude futures settled up USD 2.05, or 2.7%, to USD 76.96 a barrel. West Texas Intermediate US crude settled up USD 1.97 or 2.8% to USD 72.83.

“Today’s strong oil trade was all about the expectation of a debt ceiling agreement, likely by the end of this week, that appeared to lift a negative burden across most asset classes, including oil,” said Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois.

President Joe Biden and top US congressional Republican Kevin McCarthy on Wednesday
underscored their determination to reach a deal soon to raise the federal government’s USD 31.4 trillion debt ceiling and avoid an economically catastrophic default.

After a months-long standoff, the Democratic president and speaker of the House of Representatives on Tuesday agreed to negotiate directly. An agreement needs to be reached and passed by both chambers of Congress before the federal government runs out of money to pay its bills, as soon as June 1.

The optimism outweighed a crude inventory increase of 5 million barrels in the week ended May 12 reported by the Energy Information Administration. Analysts polled by Reuters had expected a 900,000-barrel drop.

The crude inventory build added to concerns about US growth after data showed retail sales rose 0.4% in April, short of estimates for an increase of 0.8%.

However, gasoline stocks drew down by 1.4 million barrels as the four-week gasoline product supplied – a proxy for demand – rose to its highest level since December 2021.

The International Energy Agency on Tuesday predicted demand would outpace supply by 2 million barrels per day (bpd) in the second half of the year, with China making up 60% of oil demand growth in 2023.

In China, April industrial output and retail sales growth undershot forecasts, suggesting the economy lost momentum at the beginning of the second quarter.

Markets are in a “wait-and-watch mode” over the outcome of the debt ceiling negotiations, said Vandana Hari, founder of oil market analysis provider Vanda Insights.

“A bunch of Chinese macro-economic data for April released on Tuesday confirmed the narrative of a patchy and slow recovery in the country and continue to weigh on oil market sentiment.”

(Additional reporting by Katya Golubkova; editing by Deepa Babington, Kirsten Donovan and David Gregorio)

Wall Street closes lower after Home Depot outlook, US retail sales

NEW YORK, May 16 (Reuters) – US stock indexes closed lower on Tuesday after a disappointing forecast from Home Depot and US retail sales data for April pointed to softer consumer spending, while uncertainty about interest rates and debt limit negotiations weighed on sentiment.

Home Depot (HD) declined 2.15% as one of the biggest drags on both the Dow Industrials and S&P 500 after the home improvement retailer cut its annual sales forecast and projected a steeper-than-expected decline in profit. Shares of peer Lowe’s Companies Inc (LOW) fell 1.16%.

“You can argue that people are tired of spending on the house, they want experiences, they want to go out they want to do other things, they don’t want to fix up the house according to Home Depot, because they had horrendous earnings,” said Ken Polcari, managing partner at Kace Capital Advisors in Boca Raton, Florida.

The Commerce Department reported retail sales rose 0.4% in April, short of the estimate for an increase of 0.8%. But core retail sales rebounded, a figure excluding automobiles, gasoline, building materials, and food services.

“There is a sense that people are starting to get a little bit more sensitive to the Fed being successful and this ongoing drama of the debt ceiling is causing angst.”

The Dow Jones Industrial Average fell 336.46 points, or 1.01%, to 33,012.14, the S&P 500 lost 26.38 points, or 0.64%, to 4,109.9 and the Nasdaq Composite dipped 22.16 points, or 0.18%, to 12,343.05.

Recent data has indicated a slowing in the US economy following a string of rate hikes by the Federal Reserve to fight high inflation. That slowing along with recent negotiations over the US debt ceiling has focused attention on when the central bank will pause hiking or cut interest rates.

While the market is currently pricing in a rate cut by the end of the year, recent comments from Fed officials suggested they are not ready to cut rates soon.

Richmond Fed President Thomas Barkin said he was “comfortable” with raising interest rates further if needed but liked the “optionality” implied in the latest policy statement.

Cleveland Fed President Loretta Mester said she does not think the central bank can hold interest rates steady yet.

Lawmakers held a new round of talks about raising the debt ceiling. The Treasury Department has warned it could run out of money as soon as June 1 without a deal, which would trigger a default and likely cause a sharp economic slump.

Horizon Therapeutics (HZNP) tumbled 14.17% as the Federal Trade Commission said it would file a lawsuit to block Amgen Inc’s (AMGN) USD 27.8 billion deal to buy the company. Shares of Amgen fell 2.42%.

The decline in both stocks weighed on the Nasdaq Biotech Index, which closed at a three-week low after dropping 2.44%, its biggest one-day percentage decline in three months.

Shares of Capital One Financial Corp (COF) climbed 2.05% the day after Berkshire Hathaway Inc (BRKa) disclosed it had taken a stake of nearly USD 1 billion in the stock.

Declining issues outnumbered advancing ones on the NYSE by a 4.05-to-1 ratio; on Nasdaq, a 2.28-to-1 ratio favored decliners.

The S&P 500 posted 12 new 52-week highs and 13 new lows; the Nasdaq Composite recorded 47 new highs and 188 new lows.

Volume on US exchanges was 9.36 billion shares, compared with the 10.58 billion average for the full session over the last 20 trading days.

(Reporting by Chuck Mikolajczak; Editing by David Gregorio)

Gold retreats as US data, Fedspeak sow doubts on rate cuts

May 16 (Reuters) – Gold fell below USD 2,000 on Tuesday after US economic data and hawkish remarks from Federal Reserve officials drove bets that interest rate cuts may be delayed, while traders kept an eye on the US debt-ceiling talks.

Spot gold shed 1.6% to USD 1,987.39 per ounce by 1:40 p.m. EDT (1740 GMT), after touching its lowest in two weeks at USD 1,989.10 earlier.

US gold futures settled 1.5% down at USD 1,993.

US retail sales increased less than expected in April, but the underlying trend was solid, driving an uptick in the dollar and sending 10-year Treasury yields to a two-week high. USD/ US/

Richmond Fed President Thomas Barkin said he was “comfortable” with raising interest rates further if needed to lower inflation. Cleveland Fed chief Loretta Mester said the US central bank was not at a point yet where it can hold rates steady for a period of time.

This followed hawkish comments from other Fed officials on Monday who saw interest rates staying high and, if anything, going higher.

“We needed to see more signs of a pivot from the Federal Reserve and we haven’t really fully seen that yet,” said Craig Erlam, a senior market analyst at OANDA.

High interest rates dull non-yielding bullion’s appeal, although it’s considered a hedge against economic uncertainties.

But overall, traders could keep buying any dip in gold prices “as they wait out this debt ceiling fiasco”, said Phillip Streible, chief market strategist at Blue Line Futures, in Chicago.

Democratic President Joe Biden and top congressional Republican Kevin McCarthy are expected to discuss new work requirements for benefits programs for low-income Americans during Tuesday’s debt-ceiling negotiations, sources familiar with the talks said.

Spot silver slid 1.5% to USD 23.74 per ounce. Platinum lost 0.6% at USD 1,058.41 and palladium fell 2.3% to USD 1,496.54.

(Reporting by Deep Vakil and Kavya Guduru in Bengaluru; Editing by Sherry Jacob-Phillips, Sohini Goswami, Christina Fincher, and Shilpi Majumdar)

Europe has a data fest, and growth worries

Tuesday’s a busy day for European markets. We get preliminary growth numbers for the euro zone, inflation in Italy, jobless data for Britain and, crucially, the German economic sentiment ZEW survey.

No surprises are seen in euro zone GDP data – rather, analysts assume the tepid pace seen in the fourth quarter hasn’t picked up.

That leaves the German ZEW survey for May in the spotlight. There, too, the economic situation was considered relatively negative last month.

Weakness in the euro zone’s largest economy will be a matter of concern for market bulls, given they just saw Asia’s largest economy is still struggling to get demand going and doing little for global trade.

As stock markets pause to take stock, the dollar too is ceding a bit of ground mainly to sterling and the Canadian dollar, and a bit to the euro.

A June rate rise by the European Central Bank seems certain, and a Reuters poll shows the ECB will hike at each of the next two meetings.

UK labour market data is a biggie too for sterling this week, offering insight into the headline pay growth that the hawkish Bank of England is eyeing.

In the background to all this data-diving is the usual drawn-out US debt ceiling debate. With a little more than two weeks to go before the US government could run short of money to pay its bills, President Joe Biden and Republican House of Representatives Speaker Kevin McCarthy meet on Tuesday to find common ground on spending levels and whatever else it takes to agree on an increase in the nation’s USD 31.4 trillion debt limit. Here’s an explainer.

(Reporting by Vidya Ranganathan; Editing by Edmund Klamann)

Oil dips as weaker China, US economic data offset IEA demand forecast

NEW YORK, May 16 (Reuters) – Oil futures dipped on Tuesday as weaker-than-expected economic data in China and the United States offset a forecast of higher global demand from the International Energy Agency (IEA).

Brent crude futures settled 32 cents lower to USD 74.91 a barrel. US West Texas Intermediate crude edged down 25 cents to USD 70.86.

Both benchmarks rose more than 1% on Monday, reversing a three-session losing streak.

Weighing on prices on Tuesday was Chinese data showing industrial output and retail sales growth undershot forecasts in April, suggesting the world’s second-largest economy lost momentum at the start of the second quarter.

However, an 18.9% year-on-year rise in China’s oil refinery throughput in April to the second-highest level on record helped to keep a floor under crude prices.

“There has been a lot of concern about China’s industrial numbers, but if you look at their actual demand numbers or refinery runs, they’re knocking on the door of breaking records,” said Phil Flynn, an analyst at Price Futures Group.

With refiners building stockpiles ahead of the summer travel season in the northern hemisphere, crude imports by China in May are moving towards 11 million barrels per day, versus 10.67 million bpd in April, Refinitiv Oil Research said.

China’s June refinery intake is expected to grow by 1.5% month on month, data compiled from Wood Mackenzie showed.

US data showed that retail sales increased less than expected in April, pointing to consumers feeling the pinch from rising prices and interest rates.

Richmond Federal Reserve President Thomas Barkin on Tuesday said he is “comfortable” with raising interest rates further if that is what is needed to lower inflation.

The IEA raised its forecast for global oil demand this year by 200,000 bpd to a record 102 million bpd. It said China’s recovery after the lifting of COVID-19 curbs had surpassed expectations, with demand reaching a record 16 million bpd in March.

In another bullish development, the US Department of Energy on Monday said it would buy 3 million barrels of crude oil for delivery in August in a move to begin refilling the Strategic Petroleum Reserve.

The SPR has been drawn down to its lowest level since 1983 after President Joe Biden’s administration last year conducted the largest-ever sale from the emergency stockpile of 180 million barrels, as part of a strategy to stabilize soaring oil markets and combat high pump prices in the aftermath of Russia’s invasion of Ukraine.

Meanwhile, US crude oil inventories rose by about 3.6 million barrels last week, according to market sources citing American Petroleum Institute figures on Tuesday. Government data on US stockpiles is due on Wednesday.

Additionally, widespread fires in the Canadian province of Alberta have shuttered at least 319,000 barrels of oil equivalent per day, representing 3.7% of Canada’s production.

Global crude supplies could also tighten in the second half of the year as the Organization of the Petroleum Exporting Countries and its allies including Russia, a group known as OPEC+, implement additional output cuts.

(Reporting by Stephanie Kelly in New York; additional reporting by Ahmad Ghaddar in London, Yuka Obayashi in Tokyo, and Trixie Yap in Singapore; Editing by Paul Simao and Stephen Coates)

Gold muted after higher Fed rate signals, debt talks eyed

May 16 (Reuters) – Gold prices eased in a narrow range on Tuesday as traders assessed comments from US central bank officials on interest rates staying high, while the US debt-ceiling debate and risk of a default curbed further losses in bullion.

Spot gold fell 0.2% to USD USD 2,015.84 per ounce by 0452 GMT, while US gold futures GCv1 eased 0.1% to USD 2,020.40.

US Fed members are playing down the possibility of rate cuts this year and that is pushing gold slightly lower, said Matt Simpson, a senior market analyst at City Index, adding gold’s failure to hold above the previous record high had shaken confidence.

Gold hit USD 2,072.19 this month, just shy of a record high of USD 2,072.49, after the Federal Reserve hinted that its marathon raising cycle may be ending.

However, US central bankers on Monday signalled they see interest rates staying high and, if anything, going higher, given inflation that may be slow to improve and an economy showing only tentative signs of weakness.

While gold is considered a hedge against inflation, rising interest rates dull the non-yielding bullion’s appeal.

Market participants were also closely following developments in the debt-ceiling debate, with President Joe Biden and Republican House of Representatives Speaker Kevin McCarthy scheduled to meet at 3 p.m. (1900 GMT) on Tuesday for talks.

“Hopes remain of a resolution whilst talks continue, but at the same time the risk of a U.S. default lingers as Democrats and Republicans run down the clock, and that has gold in a holding pattern,” Simpson added.

Meanwhile, India slashed the base import prices of silver, and raised the price of gold, the government said late on Monday.

Elsewhere, spot silver fell 0.4% to USD 24.01 per ounce, platinum ticked 0.1% lower to USD 1,063.76, while palladium was flat at USD 1,532.28.

(Reporting by Arundhati Sarkar in Bengaluru; Editing by Sherry Jacob-Phillips and Janane Venkatraman)

Dow, S&P edge up as data, debt ceiling curb gains

NEW YORK, May 15 (Reuters) – The S&P 500 and the Dow ended with modest gains on Monday after manufacturing data raised concerns about a slowing US economy that could help bring down inflation amid ongoing debt ceiling negotiations, while a rise in Meta shares helped lift the Nasdaq.

The New York Federal Reserve’s “Empire State” index, a gauge of manufacturing activity in New York State on current business conditions, tumbled to a reading of -31.8 in May, against expectations of -3.75.

“This is always tough because we are in a period now where bad news is actually good news from a stocks standpoint and vice versa, but you still get the market reacting when you get a bad number because everybody then begins to worry about a recession,” said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York.

“So we want the economy to be weak enough to bring down inflation but not so weak that it causes a recession.”

Analysts cautioned that the barometer is also volatile, lessening its impact.

Also keeping markets subdued was the wrangling in Washington between the White House and Republicans in debt-ceiling talks, with a meeting scheduled for Tuesday, although it was unlikely a deal would be reached then.

“We’ve been through this before, eventually they come to their senses and do something, compromise and actually get something done instead of playing this game of chicken, it’s really who blinks first,” said Ghriskey.

The Dow Jones Industrial Average rose 47.98 points, or 0.14%, to 33,348.6, the S&P 500 gained 12.2 points, or 0.30%, to 4,136.28 and the Nasdaq Composite added 80.47 points, or 0.66%, to 12,365.21.

Meta Platforms Inc (META) climbed 2.16% as one of the top boosts to both the Nasdaq and S&P 500 after Loop Capital upgraded it to “buy” from “hold.”

In a relatively light week for economic data, investors will focus on retail sales, weekly jobless claims and housing data.

Slowing economic data has heightened expectations for when the Federal Reserve will pause its interest rate hike cycle as the central bank tries to stamp out high inflation.

On Monday, several Fed officials indicated they expect interest rates to stay high, at odds with market expectations for a rate cut before the end of the year.

In addition, Richmond Federal Reserve President Thomas Barkin said in an interview with Reuters that he is not yet convinced inflation is on a steady path downward, although he is comfortable with the Fed using a data-dependent approach for additional rate hikes.

Fed Chair Jerome Powell is scheduled to speak on Friday and investors will monitor his comments for any signals on the path of interest rates this year.

Oneok Inc (OKE) slumped 9.06% after it agreed on Sunday to buy US pipeline operator Magellan Midstream Partners (MMP) in a USD 18.8-billion deal. Shares of Magellan rallied 12.99%.

Western Digital Corp (WDC) climbed 11.26% after Reuters reported the memory chip firm and its Japanese JV partner Kioxia Holdings Corp are speeding up merger talks.

Volume on US exchanges was 9.06 billion shares, compared with the 11.1 billion average for the full session over the last 20 trading days.

Advancing issues outnumbered declining ones on the NYSE by a 2.10-to-1 ratio; on Nasdaq, a 1.85-to-1 ratio favored advancers.

The S&P 500 posted nine new 52-week highs and seven new lows; the Nasdaq Composite recorded 59 new highs and 136 new lows.

(Reporting by Chuck Mikolajczak; Editing by Marguerita Choy)

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