The latest Market Talks covering Energy markets. Published exclusively on Dow Jones Newswires throughout the day.
0856 ET - Treasury yields edge higher following Thursday's decline as markets grow convinced the Fed will hold rates steady next week despite rising oil prices. Threats of escalation in the Middle East push Brent crude up 2% to $115 a barrel. Meanwhile, markets price in 92% odds of a Fed hold, according to CME, although a hike is expected for December. U.S. manufacturing and services PMIs at 9:45 a.m. ET are expected to tick lower, according to a WSJ consensus. The October University of Michigan consumer sentiment index, at 10 a.m., is also expected to decline. The 10-year yield is at 4.984% and the two-year at 4.682%, both on pace for a weekly decline. (paulo.trevisani@wsj.com; @ptrevisani)
0827 ET - SLB's data-center solutions business continues to grow quickly, CEO Olivier Le Peuch says in the company's 3Q earnings release. Revenue across the division was up 23% sequentially, driven by growing demand, a broadening scope of services and geographic expansion into Asia. "AI is driving unprecedented investment in data center infrastructure, and customers are looking for partners who can deploy quickly, reliably and at scale," Le Peuch says. SLB's planned $4.1 billion acquisition of Kelvion, a thermal-management company, will strengthen its technology portfolio, further supporting the data center business, he adds. "Overall, we continue to strengthen our position as an industrial technology partner to the data center industry and to expand our participation in this rapidly growing market," Le Peuch says. (connor.hart@wsj.com)
0826 ET - High energy prices and rising government bond yields appear to be weighing on business sentiment in the eurozone, Commerzbank's Vincent Stamer says in a note. The composite PMI fell to 51.9 in October from 53.1 in September, dragged down by France. The gauge has therefore slipped into a range where the economy has historically grown at a rate below average, or 0.4% quarter-on-quarter, he says. More companies, particularly in the manufacturing sector, report rising input prices, suggesting the renewed rise in energy prices from the Iran war weighs on sentiment. But rapidly rising government bond yields and the deadlocked budget negotiations in France are also likely hurting confidence, he says. (edward.frankl@wsj.com)
0635 ET - The U.S. dollar and Treasury yields rise slightly in European midday trade. The dollar gains support from rising oil prices, which often support the currency, both because the U.S. is an oil exporter and due to safe-haven flows. Treasury yields rise after sharp falls the previous day, though their safe-haven role could resurface due to concerns about the sustainability of AI investments and stock-market falls. "Concerns over how technology companies will finance the AI build-out...could limit any meaningful rebound in yields," says VT Markets Dubai's Mahmoud Mashal in a note. The 10-year Treasury yield rises 2.9 basis points to 4.982%, according to Tradeweb. The DXY dollar index rises 0.2% to 101.763. (emese.bartha@wsj.com)
0627 ET - Oil prices rise in afternoon trading, with WTI futures now above $101 a barrel, driven by Houthi attacks on Saudi Arabia and fears of further escalation between the U.S. and Iran before the midterm elections. The U.S. oil gauge is up 1.6% to $101.04 a barrel, while Brent crude rises 1% to $114.28 a barrel. "Market sentiment remains nervous," analysts at Commerzbank say. According to data from Kpler, oil flows through the Strait of Hormuz remain 26% below prewar levels, with the seven-day average at 12.65 million barrels per day versus a baseline of 17.15 million, as attacks on shipping keep the risk premium for freight and crude elevated. Still, Middle Eastern oil supplies--excluding Iran--that are reaching global markets are above prewar levels. (giuliapetroni@wsj.com)
0518 ET - Eni's extraordinary dividend of 1.3 billion euros is higher than expected and the highlight of its 3Q results, along with the increased buyback volume, UBS analysts say in a note. UBS had expected a special dividend of 1 billion euros. The higher distributions stem in part from better guidance in some of the Italian energy company's operating segments as well as better macro assumptions, according to UBS. The buyback hike is the third one for Eni this year, reflecting how the Middle East conflict and high refining margins are offering energy majors a lift. Eni's net profit beat UBS's estimate by 16%, helped by a lower tax rate. Shares trade 3.7% higher at 27.10 euros. (sarah.sloat@wsj.com)
0357 ET - European natural-gas prices climb to their highest since late 2022 as fears of renewed escalation between the U.S. and Iran threaten LNG supply ahead of winter. The benchmark Dutch TTF contract rises 3.8% to 93.43 euros a megawatt-hour, on track for a weekly gain of nearly 7%. According to analysts, EU gas storage levels seem to have peaked at only 75%. "The only hope is that the mild temperatures Europe has experienced so far this winter will continue," according to ANZ. "Most forecasts are pointing to unseasonably warm weather returning to northwest Europe next week. However, temperatures are expected to drop in November." (giulia.petroni@wsj.com)
0339 ET - Contemporary Amperex Technology's low profitability in 3Q could be the new normalized margin level given more headwinds ahead, say Daiwa analysts in a note. The miss in 3Q results indicates CATL's weak cost pass-through capacity amid a weak new energy vehicle sales outlook, alongside more severe tax burdens next year, they add. The market is also concerned about the potential decoupling of NEV makers with self-developed technologies. Daiwa sees limited market sentiment support in the near term with CATL's management offering limited information regarding future strategy or solid cost pass-through measures. Daiwa downgrades CATL to hold from buy. The stock ended 7.8% higher at 237.60 yuan in Shenzhen.(jiahui.huang@wsj.com; @ivy_jiahuihuang)
0329 ET - Gold is headed for a weekly loss of more than 3.5% as elevated energy prices fueled concerns over inflation and interest-rate hikes. In early European trading, New York futures fall 0.8% to $4,026 a troy ounce. "A rising inflation backdrop along with selling pressure to cover losses in equity or bond market positions is a negative combination for gold in the short-term even as the Fed is looking assured to keep rates unchanged at next week's FOMC meeting," says Soojin Kim from MUFG. Bullion is seen as a hedge against inflation, though a higher interest-rate environment tends to diminish the nonyielding asset's appeal. According to the FedWatch tool, traders broadly expect the U.S. central bank to leave interest rates unchanged next week, but they see a nearly 80% probability of a hike in December. (giulia.petroni@wsj.com)
0322 ET - Oil prices are on track for a weekly gain after climbing to a five-month high over fears that the U.S. could attack Iran after the midterm elections in early November. Brent crude is up 1% to $114.29 a barrel, while WTI futures gain 1.3% to $100.72 a barrel. The U.S. has a third aircraft carrier strike group and an additional Marine expeditionary unit en route to the Middle East. Meanwhile, the military has moved some troops off bases in the region. "Clearly, these developments don't paint an optimistic picture," analysts at MUFG say. "They call into question our long-held view that the U.S. midterm elections would bring de-escalation and normalisation in flows and oil prices." (giulia.petroni@wsj.com)
0300 ET - Signify's tariff refund drove it to exceed adjusted earnings forecasts, analysts at JP Morgan say in a note. The Dutch lighting company reported adjusted earnings before interest, taxes, depreciation and amortization of 145 million euros, and beat JP Morgan's expectations by 34%, the analysts said. Tariff refunds were largely behind the beat, they say, adding 28 million euros to its result. (aimee.look@wsj.com)
0225 ET - The dollar recovers after reaching a three-week low against a basket of currencies on Thursday as Treasury yields rise and oil prices jump. Fresh tensions in the Middle East propelled Brent crude prices to their highest levels since May, above $114 per barrel. Higher oil prices support the dollar as the U.S. is a net oil exporter while the currency tends to act as a safe haven. Concerns about French debt and civil unrest also weigh on the euro and lift the dollar. The DXY dollar index rises 0.1% to 101.691, having reached a three-week low of 101.446 Thursday driven by concerns about AI investments.
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