Aurelia Butler

WASHINGTON (Reuters) – U.S. President Donald Trump will make an infrastructure announcement on Tuesday, White House Press Secretary Karoline Leavitt said in an interview with Fox News.”It’s going to be a massive announcement,” Leavitt told the “Fox & Friends” program without elaborating. More

(Reuters) -U.S. stock index futures edged up in choppy trading on Tuesday, as investors assessed newly elected President Donald Trump’s executive orders on issues including energy and immigration, while awaiting his first move on trade policy.President Trump did not lay out any concrete plans on the universal tariffs and additional surcharges on close trade partners as expected, but said he was thinking about imposing duties on Canadian and Mexican goods as early as Feb. 1.While investors remain cautious, brokerage Goldman Sachs lowered its forecast for a universal tariff this year to 25% from about 40% seen in December. At 07:23 a.m. ET, Dow E-minis were up 211 points, or 0.48%, S&P 500 E-minis were up 22 points, or 0.36% and Nasdaq 100 E-minis were up 91.25 points, or 0.43%.Futures tracking the domestically focused small-cap Russell 2000 index added 0.6%. Automakers General motors and Ford (NYSE:F) that have supply chains spread across the continent edged up 0.8% and 1.5%. Elon Musk-led Tesla (NASDAQ:TSLA) added 2% premarket trading.U.S.-listed shares of Chinese companies Xpeng (NYSE:XPEV) and Li Auto (NASDAQ:LI) added 5.7% and 5.4%, respectively on no signs of imminent surcharges on Chinese goods.Markets have been sensitive to any reports on Trump’s tariff policies on concerns it could spark a global trade war and fresh inflation pressures.”Tariffs mean a stronger U.S. dollar due to higher import prices and weaker global growth, no tariffs means stronger global trade and a more robust global growth backdrop,” said Kyle Rodda, senior markets analyst at Capital.com.”Just like the first Trump administration, the markets are highly sensitive to headline risk, especially as it relates to trade wars.” During the first year of Trump’s first administration, the S&P 500 rose 19.4%, while during the entirety of his first term, the benchmark index rose nearly 68%, but saw bouts of volatility, stemming in part from a trade war Trump fought with China.However, inflation is still above the Federal Reserve’s 2% target, stoking worries that Trump’s policies could delay the central bank’s pace of monetary policy easing. Economists see the Fed leaving borrowing costs unchanged when it meets next week and traders see the first interest rate coming in July, according to data compiled by LSEG.Oil stocks Halliburton (NYSE:HAL) rose 1.6% and SLB climbed 0.7% after Trump declared a national energy emergency to accelerate permitting oil, gas and power projects.Prison operators Geo advanced 1.1% and CoreCivic (NYSE:CXW) rose 2.4%, after Trump declared a national emergency on illegal immigration at the U.S.-Mexican border. Nuclear stocks Oklo rose 5.4% and Vistra added 5.5% as energy secretary Chris Wright said he plans to prioritize domestic nuclear energy production.Apple (NASDAQ:AAPL) fell 2.1% after brokerage Jefferies cut its rating on the iPhone maker to ‘underperform’.3M rose 4.2% after the industrial conglomerate posted upbeat fourth-quarter profits, while strong results from D.R. Horton sent the home-builder’s shares up 3.6%. More

Shares of the construction company rose more than 5% in premarket trade. Homebuilders are benefiting from a shortage of existing homes on sale, partly due to current homeowners, who secured properties when interest rates were low, being reluctant to sell and purchase new homes in today’s higher mortgage rate climate.The limited supply of resale homes, which make up a significant portion of U.S. housing sales, has pushed up demand for newly built homes despite the high borrowing costs and rising prices.”Despite continued affordability challenges and competitive market conditions, incentives such as mortgage rate buydowns have helped to address affordability and spur demand,” D.R. Horton executive chairman David Auld said, adding that the company has started to sell more of its homes with smaller floor plans to meet homebuyer demand. D.R. Horton, the largest U.S. homebuilder by sales, closed sales on 19,059 homes in the first quarter ended December 31, down 1% from 19,340 homes a year earlier. Pre-tax profit margin in its homebuilding segment came in at 14.1% for the quarter, compared with 15% a year earlier. The Arlington, Texas-based company posted first-quarter revenue of $7.61 billion, above analysts’ average estimate of $7.08 billion, according to data compiled by LSEG. Earnings of $2.61 per share for the quarter also came in above analysts’ estimates of $2.36 per share. More

BERLIN (Reuters) -Sticking with growth plans for green energy is the best response to Donald Trump after the U.S. president’s “fatal” move to withdraw from the Paris climate accord, German vice chancellor Robert Habeck said on Tuesday.”We have to bring our own technologies to the fore,” said Habeck, the architect of plans to make 80% of electricity green in Germany by 2030, speaking at the Handelsblatt annual energy conference in Berlin.The move by Trump, a climate change sceptic, to withdraw from the Paris climate treaty was widely expected and further threatens the agreement’s central goal to limit a rise in global temperatures to 1.5 degrees Celsius above pre-industrial levels.Germany, Europe’s biggest economy, holds a national election on Feb. 23, where Habeck’s Greens are trailing in opinion polls as a cost-of-living crisis and an economic downturn has shifted some voters’ focus away from climate protection.Economy minister Habeck said self-reliance through domestic green energy remained the best response to dependency on energy imports and high costs, especially as Russian gas supplies to Europe dwindle following the invasion of Ukraine in 2022. Habeck urged parliament to pass a draft bill giving more digital control of expanding renewable capacity to help rein in rising costs and bring down consumer bills.Another unfinished plan, a capacity market for power, was also a priority, he said. Otherwise, coal-burning power plants, which offer stable supply, would have to operate beyond the targeted 2030 cut-off date.The chief executive of power transmission firm TenneT said the new German government needed to take a number of key steps to support the green energy roll-out.Renewable producers needed to pay a part of grid costs, Tim Meyerjuergens said. Currently, they pay nothing.Grid operators should also be allowed to raise their fees as they are too low to attract international investors to grids, he added. More

According to Barclays, long-only equity exposure has increased notably since the election, while hedge funds still appear to have the capacity to enhance their positions. This trend is particularly evident in global macro and multi-strategy hedge funds, which have shown limited activity in re-grossing their investments. Despite a sell-off in the bond market, bond funds have not shown signs of a large-scale exit.In the wake of the election, the US dollar has strengthened, leading speculative investors to amplify their short positions in other global currencies, reflecting a growing belief in US economic outperformance.Systematic funds, which include Volatility Control, Commodity Trading Advisors (CTAs), and Risk Parity funds, have recently reduced their long positions in equities, aligning their allocations closer to historical averages. Volatility Control funds have the potential to increase their equity exposure, but any inflows are expected to be incremental, given the volatility anticipated with the implementation of President Trump’s policies. CTAs have notably taken a large short position in the Russell 2000 index, while maintaining a relatively higher position in the NASDAQ index. With rising rates and volatility in the bond market due to inflation concerns, CTAs have also established significant short positions in bonds, and Risk Parity funds have similarly decreased their allocations.The strong US dollar post-election has led to CTAs taking extended long positions on the currency, particularly against the euro. However, recent benign inflation data has created conditions that could lead to a partial reversal of these extended positions in bonds and the EUR/USD currency pair.The EEI aims to provide insights into the underlying dynamics of the stock market by analyzing derivatives flows, including volatility technicals and option flows. Despite recent downturns in the equity market, the EEI indicates a level of investor optimism not seen since the dot-com bubble of the early 2000s, suggesting that investors should proceed with caution. Current equity positions are largely filled, prompting investors to protect against downside risks while showing skepticism towards significant upside potential. This is reflected in the options market, where there is evidence of increased buying of downside protection and selling of upside potential. Notably, institutional investors, rather than retail investors, have been the primary drivers of call overwriting flow, with the supply of gamma from buy-write funds remaining at historically significant levels. Additionally, the positive intra-day auto-correlation signals that dealers are short in this environment.This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. More