US, China begin fresh round of tariff talks seeking to extend temporary truce
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Times
27 minutes ago
- Business Times
Opec+ makes another large oil output hike in market share push
[LONDON] Opec+ agreed on Sunday (Aug 3) to raise oil production by 547,000 barrels per day for September, the latest in a series of accelerated output hikes to regain market share, as concerns mount over potential supply disruptions linked to Russia. The move marks a full and early reversal of Opec+'s largest tranche of output cuts plus a separate increase in output for the United Arab Emirates amounting to about 2.5 million bpd, or about 2.4 per cent of world demand. Eight Opec+ members held a brief virtual meeting, amid increasing US pressure on India to halt Russian oil purchases – part of Washington's efforts to bring Moscow to the negotiating table for a peace deal with Ukraine. President Donald Trump said he wants this by Aug 8. In a statement after the meeting, Opec+ cited a healthy economy and low stocks as reasons behind its decision. Oil prices have remained elevated even as Opec+ has raised output, with Brent crude closing near US$70 a barrel on Friday, up from a 2025 low of near US$58 in April, supported partly by rising seasonal demand. 'Given fairly strong oil prices at around US$70, it does give Opec+ some confidence about market fundamentals,' said Amrita Sen, co-founder of Energy Aspects, adding that the market structure was also indicating tight stocks. The eight countries are scheduled to meet again on Sep 7, when they may consider reinstating another layer of output cuts totalling around 1.65 million bpd, two Opec+ sources said following Sunday's meeting. Those cuts are currently in place until the end of next year. Opec+ in full includes 10 non-Opec oil producing countries, most notably Russia and Kazakhstan. The group, which pumps about half of the world's oil, had been curtailing production for several years to support oil prices. It reversed course this year in a bid to regain market share, spurred in part by calls from Trump for Opec to ramp up production. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up The eight began raising output in April with a modest hike of 138,000 bpd, followed by larger-than-planned hikes of 411,000 bpd in May, June and July, 548,000 bpd in August and now 547,000 bpd for September. 'So far the market has been able to absorb very well those additional barrels also due to stockpiliing activity in China,' said Giovanni Staunovo of UBS. 'All eyes will now shift on the Trump decision on Russia this Friday.' As well as the voluntary cut of about 1.65 million bpd from the eight members, Opec+ still has a 2-million-bpd cut across all members, which also expires at the end of 2026. 'Opec+ has passed the first test,' said Jorge Leon of Rystad Energy and a former Opec official, as it has fully reversed its largest cut without crashing prices. 'But the next task will be even harder: deciding if and when to unwind the remaining 1.66 million barrels, all while navigating geopolitical tension and preserving cohesion.' REUTERS
Business Times
an hour ago
- Business Times
The AI race has big tech spending US$344 billion this year
[LONDON] If there's any lesson to take from the spending plans issued by the world's largest technology companies over the past two weeks, it's to never underestimate the fear of missing out. Microsoft, which set a US$24.2 billion capital spending record last quarter, plans to drop upwards of US$30 billion in the current period. similarly spent US$31.4 billion last quarter, almost double what it dropped a year ago, and is maintaining that level of investment. Google owner Alphabet raised its capital expenditures guidance this year to US$85 billion. Then there's Meta Platforms: The social networking giant lifted the low end of its forecast for 2025 capital expenditures and projected that costs will continue to grow at an even faster pace next year. Altogether, the four companies are expected to spend more than US$344 billion for the year, with much of it going to the data centres necessary to run artificial intelligence (AI) models. 'We have basically tripled capex investment in cloud due to AI,' Bloomberg Intelligence analyst Mandeep Singh said. The emphasis from virtually every company executive during this earnings season was on investing as quickly as possible to get ahead. 'We need the teams to execute at their very best to get the capacity in place as quickly and effectively as they can,' Microsoft chief financial officer Amy Hood told analysts in a call on Wednesday. Susan Li, Meta's CFO, said the goal of its own spend is to secure the advantage 'in developing the best AI models'. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Wall Street's response has been mixed. Meta was rewarded – in large part because the company posted a strong second-quarter sales beat and issued a rosy revenue forecast, signalling that the billions it's spending on AI are paying off. 'On advertising, the strong performance this quarter is largely thanks to AI unlocking greater efficiency and gains across our ad system,' chief executive officer Mark Zuckerberg said on an analyst call. Zuckerberg has plans to build several massive data centres and has been luring top AI researchers with compensation packages valued at hundreds of millions of US dollars. The company recently restructured its internal AI division, now referred to as Meta Superintelligence Labs, in an effort to build human-level AI capabilities and apply that technology across its products. Shares of the company have gained more than 8 per cent since it reported earnings on Wednesday. Amazon, on the other hand, failed to convince investors that its lavish spending has been worth it. The stock was down as much as 8.1 per cent on Friday after the company reported tepid sales from its cloud division. The results were 'especially disappointing' given the strong performance from Google's and Microsoft's own cloud services, according to Bloomberg Intelligence (BI). And the ongoing capital costs will not help. The operating margin for Amazon's cloud unit will continue to face pressure 'through 2026 as capital spending ramps up', BI analysts Poonam Goyal and Anurag Rana said. Alphabet's shares are essentially unchanged from last week when it reported earnings and issued guidance. The company raised its capital expenditures outlook by US$10 billion and expects to ramp up spending even more in 2026. chief executive officer Sundar Pichai explained that the investments are necessary to keep up with customer demand. 'Obviously, we are seeing strong momentum across our portfolio, and especially in cloud,' Pichai told analysts in a call on Jul 23. 'It's a tight supply environment, and we are investing more to expand.' Nikhil Lai, an analyst at Forrester, put it another way: If Google wants to keep up with rivals, he said, it has little choice but to follow suit: 'Google's hand is forced by OpenAI to spend tremendously on AI's infrastructure and applications.' Microsoft tied its AI investments directly to a 39 per cent jump in sales for its Azure cloud-computing division, which came in ahead of analysts' estimates. 'We continue to lead the AI infrastructure wave and took share every quarter this year,' chief executive officer Satya Nadella said in a call with analysts on Jul 30. 'In Microsoft's case, the returns are good,' Gil Luria, an analyst with DA Davidson, said. The only question now is whether Microsoft's customers are in turn seeing a decent return on investment, he said. 'That's where the test will be,' he said. 'If they don't, they are not going to increase that spend next year.' Apple's capital plans pale in comparison to its big tech peers. But the iPhone maker did raise its spending estimates, tying much of the increase to AI efforts. Apple's property, plant and equipment investments totalled US$9.47 billion in the nine months ended Jun 28, up nearly 45 per cent from a year ago. 'You are going to continue to see our capex grow,' chief financial officer Kevan Parekh told analysts on Thursday. 'It's not going to be exponential growth, but it is going to grow, substantially. And a lot of that's a function of the investments we are making in AI.' BLOOMBERG
Business Times
2 hours ago
- Business Times
Wall Street banks lose ground in Europe as tariffs spook clients
AS US President Donald Trump has ratcheted up his rhetoric against trading partners in Europe, corporates across the continent are taking notice. Some companies have begun to diversify their banking relationships away from the giants of Wall Street, according to data compiled by Bloomberg. That has been a boon for Europe's leading banks, which have been actively vying to win the extra business. 'Some players are saying that it's better to go to European or French investment banks for advice on financing or mergers and acquisitions,' said Arnaud Petit, managing director of Edmond de Rothschild's corporate finance business. Deutsche Bank chief executive officer Christian Sewing said he sees similar in potential clients' requests for proposals. 'It is happening every day with client wins and RFPs and new business that we put on.' So far this year, roughly half of the euro bond deals from non-US companies did not involve any of the five biggest US banks, according to data compiled by Bloomberg. That is up five percentage points from a year earlier. For sterling bonds, the gap has widened even further. Wall Street banks were shut out of just 47 per cent of deals throughout all of last year. So far this year, though, they have been excluded from 64 per cent of them. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up The emergence of the ability of a few European banks 'to be able to offer competitive services and advice to clients' has created a desire among clients to switch, according to UBS chief executive Sergio Ermotti. 'We believe we are well-placed to continue to benefit from that diversification.' 'Specific skills' Even before Trump's trade war kicked off in earnest, the biggest of the US banks warned that it was starting to see an impact. By April, JPMorgan Chase had already lost 'a couple' of bond deals tied to the tariff uncertainty, with companies opting for local banks instead, chief executive officer Jamie Dimon said in an interview with Fox Business at the time. He warned that the tumult was 'causing cumulative damage, including huge anger at the United States'. The latest example of a win for non-US banks came this week, when Zurich-based insurer Chubb issued an offshore yuan bond. It opted for Standard Chartered to help take on the deal. The bank was told: 'We want to bank with the regional champions, rather than just with global banks in general,' Standard Chartered chief financial officer Diego de Giorgi said. 'Because we think that you guys bring specific skills in a world that is fragmenting.' Chubb is not an exception. The effect is most pronounced in Asia, where economies are expected to be hard hit by the changing trade regimes and the re-routing of supply chains, said Ruchirangad Agarwal, head of corporate banking for Asia and the Middle East at research firm Coalition Greenwich. 'The willingness of companies in Asia to change their transaction bank is currently at a high: a third of them plan to issue a new (request for proposal) within the next 12 months,' Agarwal said. Already, US lenders' market share in financing trade for Chinese companies has dropped in recent years, from 12 per cent in 2017 to about 7 per cent share now, he added. Martin Smith, head of markets analysis at East & Partners, said: 'We expect to see heightened uncertainty and customer churn at US banks as large corporates take an active risk management stance on FX, interest rates, counterparty risk, geopolitical tensions and supply chain disruptions.' BNP Paribas, meanwhile, has gained more share than any other player in Asia, he added. 'There are clearly strategic opportunities in the tectonic shifts that the world has been seeing in recent months,' Societe Generale chief executive officer Slawomir Krupa said of companies looking to shift toward European banking partners. 'The logic behind this form of risk diversification has become more apparent for companies.' BLOOMBERG
