Russian attacks on grain silos send Chicago wheat trades higher
Wheat traded in Chicago jumped 4 per cent on Wednesday after Russia’s attacks on Ukrainian grain silos increased concerns over global food supplies.
Prices of maize added more than 2 per cent, while soybean oil prices rose 0.3 per cent.
Russian drones attacked port facilities in southern Ukraine’s Odesa region, its regional governor wrote on Telegram early on Wednesday.
Russian and Ukraine are two of the world’s most important exporters of grain. Moscow’s attacks, and its scrapping of a deal to allow Ukrainian grain shipments across the Black Sea last month, have pushed prices higher.
Country Garden Services stock rises 17% on repurchase plan
The property management arm of Chinese developer Country Garden said it would repurchase 10 per cent of its shares in an effort to restore confidence after a wave of volatile trading.
Country Garden Services Holdings said its shares have been trading at a price that does not reflect the group’s “intrinsic value”, and that the repurchase would demonstrate confidence in its “long-term business prospects”.
Country Garden, the affiliated developer, is at the centre of investor concerns over a potential deterioration in the country’s indebted real estate sector. On Monday it abruptly cancelled a $300mn share placement without providing a reason.
Shares in the services arm rose 17 per cent on Wednesday.
What to watch in Europe today
Events: It is Earth Overshoot day, when humans begin living beyond their ecological means and move into the equivalent of deficit spending. The day, conceived in 2006 by Andrew Simms of the UK’s New Economics Foundation think-tank, comes after July marked the hottest month ever recorded on Earth, according to the UN. Pope Francis begins a six-day visit to Portugal. The UK commemorates the 50th anniversary of the Summerland fire, which killed 50 people in a leisure centre on the Isle of Man.
Companies: Chinook Therapeutics shareholders meet to vote on the proposed acquisition by Novartis. Earnings are expected from weapons manufacturer BAE Systems, luxury car maker Ferrari and consumer giant Haleon.
Nomura shares decline sharply after quarterly earnings disappoint
Shares in Nomura declined as much as 8.5 per cent on Wednesday morning, after the Japanese investment bank posted disappointing earnings and declining wholesale revenues.
The bank reported net income of ¥23.3bn ($163mn) in the three months to June, up from ¥1.7bn reported in the same period a year earlier but short of the average ¥34.3bn forecast of analysts polled by Bloomberg.
Revenue at its wholesale banking unit, which includes trading and investment banking operations, declined 4 per cent, and profits slid 92 per cent.
Nomura shares later pared losses to be down about 7.6 per cent by mid-morning, but were still on track for their biggest one-day decline since March 2021.
China steps up rescue efforts as floods hit Beijing and surroundings
Rescue agencies have stepped up efforts as unprecedented floods inundated Beijing and neighbouring areas, leaving at least 20 dead and 33 missing.
Hebei province announced the release of floodwaters from a local dam on Wednesday, the eighth discharge since rainfall soaked the Hai river basin four days ago, in a move which some commentators criticised for prioritising the capital over the surrounding rural areas.
The Chinese government on Tuesday allocated Rmb110mn ($15.4mn) after leader Xi Jinping urged local officials to launch “all out” rescue efforts.
As of Monday, more than 1mn residents were evacuated in northern regions around Beijing, Tianjin and in Hebei, official data showed.
Asian equities decline after Fitch cuts US sovereign rating
Investors sold Asian equities and bought US Treasuries on Wednesday, as markets reacted to Fitch Ratings’ decision to downgrade its assessment of Washington’s sovereign debt.
Japan’s Topix shed 0.5 per cent, South Korea’s Kospi declined 0.3 per cent and Hong Kong’s Hang Seng index fell 0.8 per cent.
After US markets closed on Tuesday, Fitch cut the country’s credit rating from triple A to double A plus, citing worsening fiscal conditions and governance.
US Treasury yields edged lower on Wednesday, as investors bought safe haven assets, with the yields on both the 10-year and two-year notes adding 0.03 percentage points to 4.017 per cent and 4.887 per cent, respectively. Yields move inversely to price.
What to watch in Asia today
Events: India’s Supreme Court is expected to begin hearing applications challenging the abrogation of Article 370 of the constitution, which bestowed special status on the then state of Jammu and Kashmir. In 2019, India reorganised the Muslim-majority area as two directly administered territories, Jammu and Kashmir and Ladakh. India Couture Week 2023, organised by the Fashion Design Council of India and Hyundai India, concludes in Delhi.
Indicators: South Korea’s July consumer price index is expected to show that inflation slowed further and is likely to drop to 1.8 per cent by the end of the year. Bank of Thailand is expected to raise its policy rate by 25 basis points to 2.25 per cent. Fitch analysts said the increase reflects the central bank’s recent “hawkish rhetoric” despite a sharp decline in price pressures. New Zealand releases the latest employment data, Australia provides a services purchasing managers’ index update and Singapore issues a manufacturing PMI.
Companies: China’s Kweichow Moutai and India’s Bharti Airtel release quarterly figures.
Markets: Futures in Tokyo and Hong Kong pointed lower on Wednesday morning. US stocks declined on Tuesday after economic data suggested that elevated interest rates were weighing on the economy. The S&P 500 closed 0.3 per cent lower, while the Nasdaq Composite dropped 0.4 per cent.
Fitch cuts US credit rating and warns of ‘fiscal deterioration’
The US’s credit rating has been cut to double A plus from triple A, in an unexpected blow to the world’s biggest economy by Fitch.
The rating agency said its downgrade “reflects the expected fiscal deterioration over the next three years, a high and growing general government debt burden, and the erosion of governance . . . over the last two decades that has manifested in repeated debt limit standoffs and last-minute resolutions”.
The US narrowly avoided a default just weeks ago, with the federal borrowing limit lifted at the eleventh hour after months of tension over spending cuts.
Tinder parent Match Group shares surge on rosy outlook and user growth
Tinder parent Match Group’s shares jumped 11.6 per cent in after-market trading after the online dating company forecast better than expected revenue for the current quarter, as its marketing campaign aimed at Gen Z attracts new users and helps boost revenue.
The Dallas-based company forecast third-quarter revenue in the range of $875mn to $885mn, exceeding analysts’ expectations of $863.8mn and an 8-9.3 per cent increase from the year-ago quarter.
Match Group’s pricing optimisation and new Tinder marketing campaign, “It Starts with a Swipe”, “yielded both revenue acceleration and improved user trends”, the company said.
Donald Trump indicted over 2020 election interference probe
US prosecutors have charged Donald Trump in connection with attempts to overturn the results of the 2020 election, the second federal indictment brought against the former president in as many months.
Trump was charged with four criminal counts including conspiracy to defraud the US, to obstruct an official proceeding and to threaten individual rights, according to an indictment filed in federal court in Washington on Tuesday.
The Department of Justice’s indictment stems from a probe led by special counsel Jack Smith into alleged meddling in the results of the 2020 election and attempts to stop the certification of Joe Biden’s victory.
Read more about the Trump indictment
Starbucks rides China rebound and pricier drinks to record revenue and profit
Starbucks reported record revenues and profits beat analysts’ expectations in the coffee chain’s latest quarter, helped by higher prices for its beverages and a recovery in the Chinese market.
Comparable store sales rose 10 per cent globally in the company’s third quarter, missing forecasts for 11.8 per cent.
In China, comparable store sales rose 46 per cent from a year ago, with stores back to standard operations after zero-Covid policies in 2022 forced it to close outlets or pause services in its second-largest market.
Starbucks reported revenue of $9.2bn in its third quarter, a record, but below Wall Street forecasts for $9.3bn. Earnings of 99 cents a share topped forecasts and were up 20 cents from a year ago.