Brazilian Assets Fall as Trump's 50% Tariff Threat Roils Outlook
The real fell 0.8% in Sao Paulo, extending Wednesday's plunge. Stock futures dipped 1.5%. Swap rates surged across the curve, with contracts due in January 2029 rising almost 30 basis points, while the iShares MSCI Brazil ETF — the largest US-listed exchange-traded fund tracking the nation's equities — declined 3.2% in pre-market trading in New York.
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25 minutes ago
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Petro-Victory to Be Acquired by Brazil's Azevedo & Travassos Energia
This article was first published on Rigzone here Petro-Victory Energy Corp. said it has signed a binding memorandum of understanding (MoU) under which Brazilian energy firm Azevedo & Travassos Energia S.A. (ATE) will acquire all of its issued and outstanding common shares in an arm's length business combination. The transaction is intended to combine the businesses and assets of the two companies, resulting in Petro-Victory becoming a wholly owned subsidiary of ATE, with the current shareholders of Petro-Victory becoming shareholders of ATE. The combination is expected to 'increase shareholder value through the development of ATE's growth strategy with the supplementation of the company's diversified portfolio of production and exploration assets,' Petro-Victory said in a news release. Under the transaction, ATE will complete a private placement of around 205,5 million units at an issue price of $0.13 (BRL 0.73) per unit for gross proceeds of around $27.7 million (BRL 150 million). ATE will then purchase 100% of the issued and outstanding Petro-Victory shares and will issue 266 million shares at $0.13 (BRL 0.73) per share, provided proportionately to the shareholders of Petro-Victory, according to the release. Further, ATE will assume all outstanding debt of the company, with the estimated enterprise value of the transaction being approximately $39.5 million, including net debt and before considering any valuation for contingent payments. As part of the transaction, Petro-Victory shareholders of record at closing will be entitled to a gross overriding royalty (GORR) of 10 percent on the gross revenue from all new production arising from fields that already exist in the concessions owned by the company prior to the MoU or that will be created after the date of the MoU in the concessions owned by the company. The royalty exempts the production of the reservoirs of the São João Field that are the subject of a partnership between Petro-Victory and Eneva S.A. The GORR will apply for 15 years from the start of its commercial production or, for existing fields that are already in production, from the closing date, Petro-Victory said. Take control of your THOUSANDS of Oil & Gas jobs on Search Now >> The transaction is subject to a number of conditions precedent, including the completion of the private placement on or before July 12, subject to a 30-day extension at the sole discretion of ATE. The two parties will conduct customary due diligence and expect to negotiate and execute a definitive agreement on or before 120 days from the date of the completion of the private placement, according to the release. If the transaction is completed, Petro-Victory said it plans to delist from the TSX Venture Exchange as the acquisition will cause the company to no longer meet the exchange's listing requirements. Andorinha Field Drilling Successful Meanwhile, Petro-Victory said that it successfully concluded the drilling operations for the AND-5 well in the Andorinha Field, located in Brazil's Potiguar Basin, in partnership with ATE. Drilling reached a total depth of 3822 feet (1,165 meters) through sedimentary and basement rock layers. The operation utilized the Drake-2 onshore hydraulic rig, with wireline logging by Halliburton, Petro-Victory said in a separate statement. Based on conventional petrophysical evaluation, applying a salinity cut-off of 3,500 ppm, 42.7 feet (13 meters) of net pay were identified, distributed across four oil-bearing intervals. The technical team is continuing detailed analysis of the acquired logs and associated data, the company said. Petro-Victory said it plans to mobilize an onshore completion rig, aiming to acquire special saturation logs to more accurately characterize the productive intervals. Subsequently, well testing and completion operations will be carried out to prepare the well for production, followed by tie-in to the Andorinha Collection Station, the company said. To contact the author, email More From The Leading Energy Platform: Masdar Joins Iberdrola's East Anglia III Wind Project offshore UK ADNOC Bags 3-Year LNG Order from SEFE NATO Innovation Fund, Norway Invest in Robotic Offshore Assets Maintenance XCF Targets $1B Global SAF Production Portfolio >> Find the latest oil and gas jobs on << Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
31 minutes ago
- Yahoo
Tariffs will hit harder in the coming months, with traders growing weary of the trade drama, Morgan Stanley's CIO says
Tariff pain will be felt more acutely in the coming months, Mike Wilson says. The Morgan Stanley CIO predicts three consequences from tariffs that could show up this quarter. Stocks could take a hit as investors wait for more concrete trade deals to materialize, Wilson said. Morgan Stanley's chief investment officer says investors are growing weary of the trade drama, warning that tariffs' negative impacts could start showing up for companies and in markets soon. Mike Wilson, the chief US equity strategist at Morgan Stanley, said he foresaw a slew of consequences stemming from President Donald Trump's tariffs, which could begin to impact markets as soon as the third quarter. Investors have stayed relatively calm so far this week, despite Donald Trump escalating his trade war. The president announced fresh tariffs on more than 20 countries this week, a separate 50% tariff on copper imports, and pushed out his original deadline to August 1. "I would say, 'Here we go again,'" Wilson said, speaking to Bloomberg on Friday about the latest tariff announcements. Here's what Wilson sees ahead. Investors are familiar with Trump's tariff negotiating playbook after seeing the president whipsaw on his trade policy during Liberation Day, Wilson said. "I mean, this is President Trump's style. He goes hard, and then he, you know, he doesn't back off completely, but it's a back-and-forth," Wilson said. But traders hungry for more concrete trade deals could soon grow tired of the drama, Wilson said. Trump — whose team once pushed the idea of 90 trade deals in 90 days — hasn't nailed down many deals with trading partners yet. "That's not going to work forever. Eventually we have to get to some deals," Wilson said. "There will become a point of exhaustion, is the way I like to think about it." Corporations have been shielded from the impact of tariffs so far, thanks to businesses relying on existing inventory to sell products to consumers. But that could change in the next few months, Wilson said. Smaller corporations could be especially affected in third quarter earnings season, he added, as they don't have as much pricing power to be able to pass along the cost of tariffs to consumers. "It hasn't begun to flow through to pricing or margins. But that we think begins to change in the third quarter, and that could be the catalyst, because stocks will react to a hit in margins," he added. Inflation could also begin to creep higher in the third quarter as tariffs finally start to work their way through the economy, Wilson speculated. Tariffs are widely thought to raise inflation, as companies can hike prices to offset the cost of import duties. That could also push out the market's expectations for interest rate cuts, as the Fed will look to keep rates elevated if inflation grows hotter. "Perhaps we get a spike in inflation, which, you know, then causes the Fed to sound more hawkish, and the market will care about that for sure," Wilson added. Read the original article on Business Insider
Yahoo
32 minutes ago
- Yahoo
Trump administration ramps up pressure on Powell as Fed holds rates steady
The Trump administration appears to be ramping up pressure on Jerome Powell to step down as Federal Reserve chair, with one federal agency issuing a statement voicing support for his departure. President Donald Trump, who nominated Powell as Fed chair in 2017, has frequently voiced dissatisfaction with the Fed's recent 'wait-and-see" approach to lowering interest rates, calling instead for rates to quickly drop from 4.25% to 4.5% to as low as 2.25%. In June, Trump called Powell a "stupid person" who has "done a poor job," adding that he's called the Fed chair "every name in the book" to try to get him to cut rates. He added, "Nothing works." Powell has also come under fire from Office of Management and Budget Director Russell Vought, who suggested Powell has 'grossly mismanaged the Fed' and misled Congress about an 'ostentatious' headquarters remodel. Powell has previously defended the project, calling some of the more extravagant descriptions 'misleading and inaccurate' during a June testimony before the Senate Banking Committee. The administration's pressure tactics appeared to continue July 11, when William Pulte, director of the Federal Housing Finance Agency and chairman of the Board of Fannie Mae and Freddie Mac, said in a statement Powell's resignation would be 'the right decision for America, and the economy will boom.' Buying a house: Fannie and Freddie may use new credit scores. Will it help you get a mortgage? Pulte referenced "reports" that Powell is 'considering resigning.' When asked for confirmation, the Fed declined to comment but directed USA TODAY to the many times Powell has said he intends to serve his term, set to end May 2026. Pulte's statement comes ahead of the central bank's July 29-30 meeting. The CME FedWatch, which tracks the likelihood of a rate cut based on futures prices, says there's a roughly 93% chance rates hold steady at 4.25% to 4.5% after the meeting. In June, the Fed held interest rates steady for its fourth straight meeting and kept its forecast for two cuts in 2025. Officials project they'll lower rates by a half percentage point this year to a range of 3.75% to 4%. While lower rates would juice the economy and help reduce federal debt interest payments, Powell has said the Fed wants to see how tariffs impact inflation before cutting rates. Trump in June said he's already looking for Powell's replacement, but he may have to wait if Powell doesn't step down voluntarily. A May Supreme Court ruling downplayed Trump's ability to fire Powell, noting that the Fed is "a uniquely structured, quasi-private entity" and unlike other independent agencies with members subject to terminations decided by the president. Contributing: Paul Davidson This article originally appeared on USA TODAY: Trump administration ramps up pressure on Fed chair Jerome Powell
