Aurelia Butler

WASHINGTON (Reuters) – The Biden administration on Wednesday broadly eased sanctions on Venezuela’s oil sector in response to a deal reached between the government and opposition parties for the 2024 election – the most extensive rollback of Trump-era restrictions on Caracas.A new general license issued by the U.S. Treasury Department authorized OPEC member Venezuela, which had been under crushing sanctions since 2019, to produce and export oil to its chosen markets for the six months without limitation.U.S. Secretary of State Antony Blinken welcomed President Nicolas Maduro’s electoral concessions but said Washington has given him until the end of November to begin lifting bans on opposition presidential candidates and start releasing political prisoners and “wrongfully detained” Americans.A senior State Department official, speaking to Reuters on condition of anonymity, threatened to reverse sanctions relief measures unless Maduro takes such action.The U.S. moves follow months of negotiations in which Washington had pressed Caracas for concrete actions toward democratic elections in return for lifting some – but not all – of the tough sanctions imposed under former U.S. President Donald Trump.It also represents a significant step in the increased engagement of President Joe Biden’s administration with Maduro on issues ranging from energy to migration, a shift from Trump’s “maximum pressure” campaign against the socialist government.Venezuela ruling party official Jorge Rodriguez, who leads the government’s negotiating team at talks with the opposition, said on state television later on Wednesday that the sanctions relief affected all oil activities.”The possibility of any person or company coming to Venezuela to invest is totally open,” he said.Maduro’s government and the opposition reached an agreement in Barbados on Tuesday on electoral guarantees for an internationally monitored vote to be held in the second half of 2024. But the deal stopped short of Maduro agreeing to reinstate opposition candidates who had been barred from public office.Blinken said in a statement that the U.S. was acting “consistent with our longstanding commitment to provide U.S. sanctions relief in response to concrete steps toward competitive elections and respect for human rights and fundamental freedoms.”Wednesday’s announcements alleviated some of the toughest sanctions that Venezuela has faced but it left in place a number of other restrictions.Even so, the U.S. measures could reopen Venezuela’s doors to dozens of oil companies with frozen or reduced operations in Venezuela.The U.S. imposed harsh sanctions on Venezuela to punish Maduro’s government following his 2018 re-election, which the U.S. and other Western governments rejected as a sham. Since 2019, U.S. sanctions have banned state-run oil company PDVSA from exporting to its chosen markets.TROUBLED VENEZUELAN OIL SECTORThe changes announced on Wednesday include the issuance of a six-month general license allowing production, sale and export of Venezuela’s crude and gas, without limitations on customers or destinations, and another general license authorizing dealings with Minerven – the Venezuelan state-owned gold mining company.The U.S. Treasury Department said in a statement, however, that it was prepared to revoke those authorizations at any time if representatives of Maduro fail to follow through on their commitments in the deal with the opposition.Treasury also removed the secondary trading ban on certain Venezuelan sovereign bonds and state-run oil company PDVSA debt and equity, though a ban on trading in the primary Venezuelan bond market remains in place, it said.The U.S. has been seeking ways to boost global flows of oil to alleviate high prices caused by sanctions on Russia and OPEC+ decisions to reduce output.But chances Venezuela’s exports could offset those cuts are slim absent a big increase in investment in the country’s crippled oil sector, oil industry experts said.Two decades of mismanagement and insufficient investment, coupled with U.S. oil sanctions since 2019, are expected to stymie state-run PDVSA’s ability to make a quick comeback to cash-paying oil markets and offer its crude at fair prices.Talks between the government and the opposition, meant to provide a way out of Venezuela’s long-running political and economic crisis, were held on Tuesday for the first time in nearly a year. They agreed to further meetings at an unspecified date.The deal they announced said each side can choose its 2024 candidate according to its internal rules but did not reverse bans on some opposition figures – including Oct. 22 primary frontrunner Maria Corina Machado – that prevent them from holding office.Opposition sources said they have not given up on trying to get those bans lifted. More

The Australian Competition and Consumer Commission (ACCC) is reviewing retailer Woolworths’ proposed 55% stake buy in PETstock. The concerns relate to PETstock’s acquisitions of Best Friends Pets, Pet City, Animal Tuckerbox and Pet and Aquarium Warehouse in Eltham, Victoria between 2017 and 2022 that were not notified to the ACCC, the watchdog said.PETstock did not immediately respond to Reuters’ request for comment.”During the current Woolworths-Petstock merger review, market participants expressed concerns about the already significant consolidation that had occurred within specialty pet retail in recent years,” ACCC Commissioner Stephen Ridgeway said.PETstock’s acquisitions are all pre-date to its deal to acquire the 55% stake, Woolworths in a separate statement said, adding that the company will engage with the ACCC as part of the consultation.PETstock has offered to divest multiple sites and assets it acquired in these completed acquisitions, ACCC added. More

BENGALURU (Reuters) – The U.S. Federal Reserve will keep its key interest rate on hold on Nov. 1 and may wait longer than previously thought before cutting it, according to economists in a Reuters poll, as the central bank’s higher-for-longer message gains traction.While a slight majority still see a cut before the middle of 2024, a significant minority of forecasters, around 45%, now see no rate reduction until the second half of next year or later, up from 29% in the last poll. In the weeks since the Fed’s September meeting where it opted to pause hiking rates, inflation surprised to the upside and payrolls unexpectedly rose by the most in eight months, providing some support for the roughly one-quarter of economists polled who expect another hike. But financial conditions have also tightened since then, with yields on longer dated Treasury debt rising to multi-year highs. Several Fed officials have indicated that may work as a substitute to further rate rises, while still stressing rates will remain higher for longer. More than 80% of economists, 90 of 111, in an Oct. 13-18 Reuters poll predicted the Federal Open Market Committee will hold rates in a 5.25%-5.50% range at the conclusion of its Oct. 31-Nov. 1 meeting.That was in line with market expectations and, if realized, would be the first time in the current cycle that the Fed opted to pause for a second consecutive meeting.Twenty-six of 111 saw one more rate hike this year, matching the Fed’s median “dot plot” projections from last month. Only one saw two more hikes. “Though recent upside surprises in September employment and CPI (inflation) suggest greater risk of further rate hikes, our base case remains that the Fed will remain on hold at the current rate…until June of next year,” said Brett Ryan, senior U.S. economist at Deutsche Bank.”However, if the data continue to outperform, the Fed is likely to resume hiking.” Expectations for policy could shift following a speech by Fed Chair Jerome Powell to the Economic Club of New York on Thursday.HIGHER FOR LONGER SINKING INWhile the chances of another rate hike this year are low, so are the odds of policy easing anytime soon, according to the poll.Over 80% of economists, 91 of 111, had no rate cut in their forecast until at least the second quarter of next year. Slightly more than half, 61, expect the Fed to start cutting before mid-year. That 55% majority slipped from over 70% in a September poll, extending a trend of rate cut calls being pushed to later. The median expectation for the first cut also shifted to Q3 from Q2.As recently as July, a majority of economists polled said the Fed would start cutting by end-March.All but two of 28 respondents to an extra question said the bigger risk was the first rate cut comes later than they expect.”There will be some point next year where inflation has slowed enough, although it’s not back to target and…the growth situation is deteriorated enough where there’s pressure on Fed officials to do something,” said Lawrence Werther, chief U.S. economist at Daiwa Capital Markets.”I would not be surprised though, if such a situation came to pass more so in Q3, rather than Q2.”Inflation was expected to moderate over the coming months but remain sticky, with all inflation measures polled by Reuters – the consumer price index, core CPI, personal consumption expenditures (PCE) and core PCE – above the 2% PCE target until at least 2025.The world’s No. 1 economy was expected to expand 2.2% this year and 1.0% in 2024 and continue to add hundreds of thousands of jobs over coming quarters. The jobless rate, currently 3.8%, was predicted to pick up slightly to average 4.2% in 2024.(For other stories from the Reuters global economic poll:) More

He described Tesla’s cost reduction efforts as “digging a tunnel with a spoon,” and called people pushing work-from-home policies privileged and out of touch.Here are some of his quotes on those issues: On interest rates and the affordability of EVs:”A large number of people are living paycheck-to-paycheck and with a lot of debt. They’ve got credit card debt, mortgage debt. So, that’s the reality for most people. It’s sometimes difficult for people who are high income earners, and I would say would be someone who is earning over $200,000 a year to understand what life is like for someone who is earning fifty or sixty or $70,000 per year, which is most people.””If our car cost the same as a ( Toyota (NYSE:TM)) RAV4, no one would buy a RAV4, or, at least, they would be very unlikely to.” But since many American car buyers can’t afford to wait for a tax credit, “our car is still much more expensive than a RAV4, when you look at it that way,” he said.On economic uncertainty and consumer sentiment:”I think there’s still quite a few shoes to drop on the bad credit situation. Commercial real estate, obviously, is in terrible shape. You know, credit card interest rates are usurious with over 20% interest rates, which, over time becomes extremely punishing.””I don’t want to be going into top speed into uncertainty. There are a lot of wars going on in the world as well.””I apologize if I’m more paranoid than I should be, because that might also be the case, because I have PTSD from 2009, big time. And 2017 through 2019, were no picnic either. So, you know, the auto industry is also somewhat cyclic. People hesitate to buy a new car if there’s uncertainty in the economy.”On cost reductions for Tesla:”It’s like Game of Thrones for pennies. I mean, as a first approximation, if you’ve got a $40,000 car and roughly 10,000 items in that car, that means each thing, on average, costs four bucks. So, in order to get the cost down, say, by 10%, you have to get 40 cents out of each part, on average. It is a game of pennies … It does feel like digging a tunnel with a spoon at times.”On work-from-home policies:”These are some real Marie Antoinette vibes from people who say why doesn’t everyone work from home. What about all the people that have to come to the factory and build the cars, and all the people who have to go to the restaurant and make your food and deliver your food? It’s like, what are you talking about? I mean, how detached from reality does the work-from-home crowd have to be while they take advantage of those who cannot work from home.” More

Google declined to comment. Alphabet (NASDAQ:GOOGL) Inc.’s Russian unit filed for bankruptcy in summer 2022 after authorities seized its bank account, making it impossible to pay staff and vendors. Free services, including search and YouTube, have continued operating. Moscow has repeatedly clashed with foreign technology companies over content, censorship, data and local representation in a simmering dispute that intensified after Russia sent its armed forces into Ukraine in February 2022.Google’s Russian subsidiary has been under pressure in Russia for failing to delete content Moscow deems illegal and for restricting access to some Russian media on YouTube.However, while the Kremlin has banned some platforms including Twitter and Facebook (NASDAQ:META), it has so far stopped short of blocking access to Google’s services. More

(Reuters) – Tesla (NASDAQ:TSLA) CEO Elon Musk said on Wednesday that he was concerned about the impact of high interest rates on car buyers, adding the electric vehicle maker was hesitating on its plans for a factory in Mexico as it gauges the economic outlook.After the company missed Wall Street expectations on third-quarter gross margin, profit and revenue, Musk said he wanted to get a better sense of where the economy was headed before going “full tilt” on the Mexico factory.”If interest rates remain high … it’s that much harder for people to buy the car. They simply can’t afford it,” he said on a conference call with analysts.Tesla has managed to maintain demand with a series of price cuts, but Musk spent much of the call voicing concerns about further expansion, saying that he was afraid rising interest rates would make cars unaffordable.The price of the popular Model Y SUV was “almost unchanged” for consumers even after Tesla’s price cuts, Musk said, accounting for higher financing costs. The automaker in March announced plans for a new factory in Mexico’s northern state of Nuevo Leon that the state government estimated would cost more than $5 billion, though Tesla has yet to share a capital cost forecast.Pressed for details on the factory, Musk said: “I am scarred by 2009 when General Motors (NYSE:GM) and Chrysler went bankrupt. I don’t want to be going at top speed into uncertainty.” He also said there would be “enormous challenges” in reaching volume production for Tesla’s long delayed Cybertruck pickup and making it cash flow positive. Shares in the company fell 3% in after-hours trading on Wednesday. They had closed down 4.8%.PRICE CUTSTesla’s aggressive price cuts this year have battered its gross margin even as it faces stiff competition in China from local automakers. The company is trying to survive the price war it started, mopping up any demand for electric cars in the market even as high interest rates and price tags at rivals mute EV sales. Some analysts have said it may need to cut prices further to achieve its annual production target .In the third quarter ended September, gross margin fell to a more-than four-year low and the company signaled it would keep cutting production costs to boost profits.Still, it stuck to its annual production target of 1.8 million cars, a sign that the price cuts were buoying demand to an extent.Its stock has more than doubled this year as investors bet the company will fare better than rivals in an uncertain economy and get a long-term margin boost from its self-driving software, but scrutiny over its position in China, the world’s largest auto market is rising.”Tesla’s worrying China sales figures indicate demand for its vehicles is slowing more than expected in the face of rising competition from local EV companies, including BYD (SZ:002594), Nio (NYSE:NIO), and XPeng (NYSE:XPEV),” said Jesse Cohen, senior analyst at Investing.com”The big question is if this is just a blip, or signs of a bigger shift among consumers as rising interest rates and a weaker economic backdrop discourage consumers from making big-ticket purchases.” MARGIN FALLSTesla’s gross margin dropped to 17.9% in the quarter ended September, compared with 25.1% a year earlier, when it had yet to start the price cuts. In the second quarter, Tesla had posted a gross margin of 18.2%.Wall Street had on average expected Tesla to post a margin of 18.02%, according to 21 analysts polled by Visible Alpha. According to LSEG data, an average of 17 analysts polled expected 18.25%. Automotive gross margin, excluding regulatory credits – a closely-watched figure – fell to 16.3% in the third quarter from 18.1% in the second quarter.Margins fell despite a roughly $2,000 per vehicle reduction in raw material costs in the past quarter. Tesla said its margin had taken a hit from the underutilization of new factories and an increase in operating expenses driven by its upcoming Cybertruck model as well as spending on artificial intelligence and other projects.Revenue in the third quarter rose 9% to $23.35 billion, compared with analysts’ estimates of $24.1 billion. That marked the slowest pace of growth in more than three years.Its average revenue per unit declined by nearly 11% from a year earlier. On an adjusted basis, Tesla earned 66 cents per share. Analysts had expected a profit of 73 cents per share, according to LSEG data. It was not immediately clear if the numbers were comparable.Tesla said its energy business, which sells solar panels and batteries, as well as its services business, had become a meaningful contributor to profit with more than $500 million in combined gross profit in the quarter. (This story has been refiled to correct a typographical error in paragraph 4) More

NEW YORK (Reuters) -Several U.S. regional banks beat analysts third-quarter profit expectations on Wednesday as higher interest rates allowed them to charge more for loans, although rising loan loss provisions and deposit retention costs crimped margins. Shares of several regional banks fell, including M&T Bank, Zions Bancorporation (NASDAQ:ZION), and US Bancorp (NYSE:USB).Stronger net interest income (NII), the difference between what banks earn from lending and pay out on deposits, boosted profits at US Bancorp and M&T Bank Corp (NYSE:MTB), allowing both lenders to beat Wall Street analysts estimates despite increasing provisions for potential loan losses.A smaller-than-expected 16% drop in US Bancorp’s profit was cushioned by nearly 11% growth in its NII to $4.2 billion, Credit loss provisions, however, jumped 42% to $515 million.Aggressive Federal Reserve interest rate hikes to fight inflation have allowed many banks to make more on lending. But higher rates have also forced lenders to pay more to retain deposits as customers hunt for higher yielding products. Uncertainty over the economic outlook is also causing lenders to set aside more cash to cushion loans that may go bad. Regional banks remain a focus of investor scrutiny. Early this year, deposit runs toppled Silicon Valley Bank and two other lenders, sparking a rout in bank shares.M&T Bank reported profits rose nearly 7% to $690 million, driven by 6% NII growth to $1.8 billion. But its loan loss provisions grew by 30% to $150 million. Shares of M&T Bank fell 2.5% while US Bancorp was down 4.4%.”Most of these banks are seeing increases to their charge-offs and they are also seeing slightly higher credit problems that will continue to fester and they have to set aside reserves,” said Chris Marinac, director of equity research at Janney Montgomery Scott. However, he added that tightening credit conditions would continue to allow banks to charge more for loans.”I think the businesses have a lot more staying power,” Marinac said.The KBW regional banking index is down 24% year-to-date, while the S&P regional bank index has dropped 33% in the same period.Citizens Financial (NYSE:CFG) Group and First Horizon (NYSE:FHN) Corp both reported a decline in their third quarter profit, weighed by rising credit loss provisions and deposit costs.Citizens’ deposit costs climbed 34 basis points over the prior quarter, allowing total deposits to remain flat at $178 billion. At First Horizon, deposit costs rose by 71 basis points, with deposits reaching $66.5 billion, up 8%.Zions Bancorporation reported its deposit costs rose to 1.92% of its total deposits, up from 0.10% a year earlier. Total deposits fell 1% to $75.4 billion.Citizen Financial’s stock lost 5.6%, Zions Bancorporation fell almost 3%, while First Horizon was up nearly 2%.”The trick is going to be retaining those customers even if the Fed continues to raise rates,” Marinac said. More

WASHINGTON (Reuters) – U.S. President Joe Biden’s administration is considering $60 billion in assistance for Ukraine and $10 billion for Israel in a supplemental spending request he will send to Congress as soon as Friday, a source familiar with the matter told Reuters on Wednesday.Biden has been widely expected to ask Congress to pass a supplemental spending bill quickly, as Washington responds to the deadly Oct. 7 attack on Israel by Hamas militants while looking to continue to support Ukraine as it grapples with a Russian invasion.Multiple sources familiar with the request told Reuters on Tuesday that Biden was considering a supplemental request of about $100 billion that would include defense aid for Israel, Ukraine and Taiwan, as well as funding for efforts to beef up security on the U.S. border with Mexico.Senator Jim Risch, the top Republican on the Senate Foreign Relations Committee, said he was not aware of the $100 billion figure, except from news reports.He told a news conference he had heard that the administration was considering $10 billion for Israel.Administration officials did not immediately respond to a request for comment.Several sources said on Wednesday that Biden has not settled on a final figure, and the breakdown has not been communicated to Congress.Under U.S. law, Congress, not the executive branch, controls spending. More