
Ohio governor signs 2-year, $60 billion budget that includes funding for football stadium
The Republican governor signed the budget late Monday night, about 45 minutes before the midnight deadline. He also issued 67 line-item vetoes, including one that would have cut funding for homeless shelters 'that promote or affirm social gender transition" and another that would have forced public libraries to keep materials on sexual orientation and gender identity away from those under 18.
He also rejected lawmakers' plan to limit how much money school districts could carry over to 40% and another that would have required candidates for local school board races to be identified with partisan labels on the ballot.
The moves mark the largest number of vetoes DeWine has issued since becoming governor in 2019. His previous record was 44 in 2023. The governor defended his decisions during a news conference Tuesday, noting that state lawmakers can now vote to override the vetoes and put the items back in the budget if they desire.
The budget had been approved by the Republican-controlled state Legislature last week. GOP leaders touted its $1 billion in income tax relief, pathways to address Ohio's property tax crisis, and that it trims spending at administrative agencies and curtails regulations.
Democrats voted uniformly against the bill, alongside a handful of Republicans, casting it as a collection of misguided policy tradeoffs that prioritize the wealthy over the middle class.
The budget phases in a single flat-tax rate of 2.75% over two years, affecting anyone making over $26,050 annually. Those making less would continue to pay nothing. The plan eliminates the existing 3.5% rate for those making over $100,000 annually by the 2026 tax year.
It also includes the $600 million Haslam Sports Group, owner of the Browns, which requested that the state help build a new domed stadium in suburban Brook Park south of Cleveland. DeWine had proposed doubling taxes on sports betting to help the Browns, as well as the Cincinnati Bengals and other teams who might seek facility upgrades. But the Legislature used some of the $4.8 billion in unclaimed funds the state is holding on to — in small sums, residents left behind from dormant bank accounts, uncashed checks and forgotten utility deposits. Currently, there's a 10-year time limit before that money reverts to the state.
'This is a win for taxpayers, and it will provide significant money to things that improve the quality of life in Ohio,' DeWine said of the stadium money.
In a statement issued Tuesday, the Browns called the budget approval a 'tremendous milestone for our organization' and said DeWine and the Legislature worked together "to find a responsible way to support such a transformative project.'
Lawmakers who represent Cleveland and surrounding communities, mostly Democrats, have blasted the proposal as a gift to the team's billionaire owners. Democrats outside the Legislature have threatened to sue if DeWine signed the plan, arguing it would be unconstitutionally raiding the unclaimed funds without due process.
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Reuters
15 minutes ago
- Reuters
EU Russia sanctions add fuel to red-hot global diesel market
LONDON, July 28 (Reuters) - New European Union sanctions targeting Russia's oil industry will reshuffle global diesel flows for the second time since 2022, adding pressure to an already red-hot market. Diesel prices have proven surprisingly resilient so far this year. U.S. President Donald Trump's sweeping tariff announcement in April sparked concerns that global economic and trade activity was about to decelerate sharply. But these fears failed to materialize after Trump rowed back many of these threats and engaged in trade negotiations. The diesel market is seen as a proxy for global economic activity because the fuel is mostly used in trucks, ships and power generators as well as agricultural and industrial machinery. In Europe, around a quarter of the passenger car fleet runs on diesel, a significantly higher proportion than in other regions. U.S. diesel demand, based on a four-week average, has been nearly 5% higher so far in 2025 than a year ago at 3.8 million barrels per day, according to the Energy Information Administration. Meanwhile, India's diesel consumption in May climbed 2.1% from a year earlier and China's demand appeared to be strong in June, judging by high refinery crude processing. This is a far cry from the weak environment many imagined we might be seeing after Trump escalated his global trade war. One major support for refining margins in recent months has been low diesel stocks. Combined inventories of diesel in the United States, Europe and Singapore are around 20% below their 10-year average. Diesel stocks typically build during the northern hemisphere summer, when refinery output is at its highest. Beyond the mixed demand picture, there are a host of other reasons for the slow diesel inventory build. These include unplanned refinery outages, such as Israel's 197,000-barrels per day refinery in Haifa that was hit during the 12-day war with Iran in June, and the closure of the 113,000-bpd Lindsey refinery in northeast England following its owner's bankruptcy. The global shortage in heavy and medium crude oil grades, which have higher diesel yields, has further limited refining output. The shortage is the result of U.S. sanctions on Venezuelan crude exports, a drop in Canadian output due to wildfires and lower exports of those grades by OPEC members. The outlook for diesel was further complicated last week after the EU adopted its 18th package of sanctions against Russia over its war in Ukraine. The measures, aimed at limiting Moscow's revenue from oil exports, included an import ban on refined products made from Russian crude. The ban, which would likely kick in next year, seeks to close a loophole that Russia has been exploiting since the EU halted most imports of the country's crude and refined products in the wake of Moscow's invasion of Ukraine in February 2022. Russia accounted for 40% of Europe's diesel imports in 2021, representing nearly a quarter of the region's total consumption. To address the shortfall following the 2022 ban, Europe increased diesel imports from China, India and Turkey. At the same time, those three countries sharply increased imports of cheap Russian crude oil, which meant Europe was effectively buying products made from Russian feedstock. Indian refiners, which accounted for 16% of Europe's imports of diesel and jet fuel last year, are set to be particularly hard hit by the latest ban, as 38% of India's crude imports in 2024 were from Russia, according to Kpler data. The ban would likely have a smaller impact on imports by Turkey, where Russian crude tends to be used by refineries that supply the domestic market. Plants that export fuel to Europe tend to process non-Russian crude. The main winners will likely be Gulf states. The new EU ban exempts countries that are net exporters of crude, even if they import Russian oil. This would allow refineries in Saudi Arabia, the United Arab Emirates and Kuwait to increase exports to Europe, taking market share from Indian competitors. The most likely outcome from these new sanctions, whose details have yet to be specified, is a reorganization of global diesel shipping flows. Indian refiners, including the giant 1.2 million Reliance refining complex in Jamnagar, will need to find new outlets for their fuels. This will likely include markets in Africa, where Indian operators would be competing for market share with Nigeria's newly-built 650,000-bpd Dangote refinery, the continent's largest. At the same time, Middle Eastern refiners will direct more diesel towards Europe and less fuel towards closer Asian markets. This, in turn, will likely lead to higher freight costs – and that could ultimately push up prices at the pump in Europe. This situation would get even more complicated if President Trump follows through on the threat to hit countries that buy Russian oil with a 100% tariff if Moscow doesn't agree to stop the fighting in Ukraine by September. This all means that even if oil demand begins to falter, the combination of low global diesel inventories and tightening sanctions on Russia will likely support diesel prices and refining margins in the months ahead. Enjoying this column? Check out Reuters Open Interest (ROI),, opens new tabyour essential new source for global financial commentary. ROI delivers thought-provoking, data-driven analysis. Markets are moving faster than ever. ROI, opens new tab can help you keep up. 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Reuters
15 minutes ago
- Reuters
Fed rates are going nowhere fast
LONDON, July 28 (Reuters) - Incoming U.S. inflation signals are offering the Federal Reserve little or no justification to resume interest rate cuts, and it's hard to see that changing before September. Following an unscheduled visit to the Fed last week, President Donald Trump said he thinks the Fed may be ready to lower rates again. To be sure, at least two of his appointees to the Fed board - Christopher Waller and Michelle Bowman - have indicated they might vote for a cut as soon as this week. But they may be alone. Markets certainly remain unconvinced. Futures pricing shows virtually zero chance of a move on Wednesday and only a 70% chance of a cut at the following meeting in September. Markets now even doubt we'll see two rate cuts this year - the median of Fed policymakers' forecasts published just last month. While some clarity on the uncertain trade picture should emerge from this Friday's deadline, the effective overall import tariff rate is still set to be almost 20% higher than at the start of the year. And the impact from that may take months yet to filter through. But there are enough other signals that higher import levies and a weaker dollar are already irking the U.S. price picture, at least enough to keep the Fed wary. As it stands, inflation remains well above the 2% target, and long-term market inflation expectations, now the highest of any G7 country, are above target too and creeping up. The Fed's favored inflation gauge, from the personal consumption expenditures basket, is due for release on Friday, and the annual core rate excluding food and energy is expected to be 2.7% - the same as last month. Consumer price inflation data for the month that has already been released shows pockets of price pressure in key areas affected by the limited tariffs enacted so far. Producer price data was more subdued, but that series doesn't include imported goods. Moreover, manufacturing firms last week continued to show outsized gains in input prices in July. S&P Global's monthly survey of purchasing managers registered an input price reading of 64.6, still far above the 50 threshold between expansion and contraction. Unlike the PPI, that captures imported inputs. By contrast, European manufacturers registered an equivalent input price reading of 49.9. Tariff-related readouts from the roughly one-fifth of S&P 500 companies that have reported second-quarter updates have been noisier. But economists warn that two aspects of the earnings season could potentially be disguising the tariff impact. The first is significant front-loading of imports in the first quarter to beat the tariffs, the enormous scale of which led to a small GDP contraction in the first three months of 2025. As that tariff-free inventory is run down, costs should rise as tariffs begin to hit. The hiatus may have allowed many firms to keep prices steady or avoid taking significant margin hits through the second quarter. The second aspect economists warn about is the degree to which major companies may want to avoid any public statements on negative tariff hits or any pass-through to consumers due to fears of political backlash. All of which leaves a foggy inflation picture going forward and one unlikely to be clarified much by September. To be sure, the Fed has a dual mandate, which includes both keeping prices stable and maintaining maximum employment, and one argument, from Waller at least, is that the labor market is showing signs of softening. And yet employment reports out this week are unlikely to offer much support on that front either, with recent weekly jobless claims data painting a robust picture. While monthly payroll growth is expected to slow in July, the unemployment rate is set to remain near historic lows at about 4.2%, with annual wage growth one percentage point above core PCE inflation. What's more, second-quarter U.S. GDP updates this week are also expected to confirm a brisk bounce-back in overall economic growth to 2.4% after the trade-distorted first-quarter hiccup. Lazard chief market strategist Ron Temple reckons the Fed won't cut at all this year, just like seven Fed policymakers indicated last month. "My logic is that inflation is likely to re-accelerate meaningfully by year-end due to tariffs," he wrote on Friday. "Thereafter, stricter immigration enforcement is likely to create another inflationary force," he said, adding that rising deportations of workers could push up wage inflation, keep unemployment stable, and cause GDP to slow. "That is not a scenario that argues for Fed rate cuts." If the Fed does signal it's ready to ease again, it may struggle to make a cogent case for why it is doing so. The opinions expressed here are those of the author, a columnist for Reuters -- Enjoying this column? Check out Reuters Open Interest (ROI), your essential new source for global financial commentary. Follow ROI on LinkedIn. Plus, sign up for my weekday newsletter, Morning Bid U.S.


Reuters
15 minutes ago
- Reuters
Four themes powering Europe's equity bull market
LONDON/GDANSK, July 28 (Reuters) - European stocks are near record highs again, seemingly shaking off tense trade talks and currency headwinds, while volatility has evaporated, giving rise to four key themes that investors are playing as they wait for the next major catalyst. The STOXX 600 posted its best first-quarter relative to the S&P 500 in a decade - but is now clocking an 8.4% gain in 2025, just a touch ahead of the S&P 500's 8.2% rise. The European Union over the weekend reached a framework deal with the U.S. for tariffs of 15%. But optimism has been building for some time that the two sides would avert a damaging trade war and the data points to an economy that is holding up for now. Investors are warming to four key themes at play under the surface of the European stock market. A performance gap has emerged between euro zone domestic-focused stocks and exporters, all thanks to a stronger euro, which has risen 13.4% versus the dollar in 2025 , hurting exporter earnings. Trade-sensitive sectors like autos and consumer durables have fallen behind, while domestically-oriented stocks like banks and utilities have soared. A STOXX autos basket (.SXAP), opens new tab added over 3% last week after news of a U.S.-Japan trade deal, but is still about 1% lower in 2025, a stark contrast to a 35% increase in bank stocks (.SX7P), opens new tab and 15% surge in utilities. (.SX6P), opens new tab Analysts have been revising down overall 2025 earnings forecasts in Europe, but zooming in, there is a clear split between the pace of earnings revisions for euro zone exporters versus domestic plays, with the forward EPS of exporters dropping at an accelerated pace. JPMorgan equity strategists advise clients to keep favouring domestics over exporters in their non-U.S. portfolios, while Barclays equity strategists say the current positioning gap is so extreme that the risk of a reversal is rising. Helen Jewell, CIO of BlackRock Fundamental Equities EMEA, flagged select opportunities in the export-focused luxury and semiconductor sectors. "If we get some resolution of where the tariffs are and if we get some sort of levelling out of the dollar, I think these names will start to perform well, and that could potentially be the second leg for the European story,' Jewell said. Germany's massive spending plans, aimed at boosting the country's economy after decades of fiscal conservatism, brought optimism to broader European markets, as EU companies are set to benefit from increased spending on defense and infrastructure. The U.S. tariff announcement in April caused a massive stock sell-off, but the German DAX (.GDAXI), opens new tab has since recovered to touch a fresh year high in July. Midcap stocks (.MDAXI), opens new tab have followed a similar path. Both indexes are up over 20% this year and set for their strongest annual performance since 2019. "The relevance of Germany as a market for EU countries is great," Uwe Hohmann, equity strategist at Metzler Capital Markets said, pointing to the country's strong trade relationship with other EU states. Germany's spending plans will have a modest effect on European growth, according to the European Commission's spring economic forecasts, but the market impact is expected to be profound. "...the optimism around the German fiscal balance will still be the main driver of European markets in the next years," said Nabil Milali, portfolio manager at Edmond de Rothschild Asset Management, warning however that money will not concretely flow into the economy until 2026 at least. A potential deterioration in trade relationships with the U.S. or China could dampen sentiment on European equity markets, at least in the short term. "It would then only and mostly solely depend on what's going on in the German political arena, which is, I think, probably not good enough on a standalone basis to support an overall positive trend," said Hohmann. European small-caps are on track to outperform large-caps in Europe for the first time since 2020. A basket of European small caps (.MIEU000S0NEU), opens new tab is up 13.4% in 2025, outperforming its large cap counterpart (.MIEU000L0NEU), opens new tab which is up 9.1%, for the first time since 2020. Since April, Graham Secker, head of equity strategy, Pictet Wealth Management said a stronger euro and better economic outlook have driven the small-cap turnaround. "European small-caps were the proverbial value-trap: you're cheap but you stay cheap until something changes," said Secker, adding that in illiquid areas of the market, it doesn't take much to move the dial. "There has been a lot of interest with the fiscal stimulus announcement out of Germany for revisiting German mid- and small-caps, as probably the cleanest way to play the fiscal push that's coming through Europe," Secker said. Talking size, some smaller markets have also been outperforming the wider European landscape this year. Indexes in Czech Republic (.PX), opens new tab, Greece (.ATG), opens new tab and Poland (.WIG), opens new tab have added 25%, 35% and 37%, respectively, compared with an 8% rise in the STOXX 600 (.STOXX), opens new tab. "I think the positioning of investors is going more and more towards these smaller markets" which are benefiting from sectorial factors and higher exposure to the domestic economy, said Edmond de Rothschild's Milali.