Oil rises on tighter U.S. market, strong China imports

2017 10 13T030811Z 2 LYNXMPED9C00I RTROPTP 0 GLOBAL PETROLEUM 1 - Oil rises on tighter U.S. market, strong China imports

2017 10 13T030811Z 2 LYNXMPED9C00I RTROPTP 0 GLOBAL PETROLEUM 1 - Oil rises on tighter U.S. market, strong China imports
A oil pump is seen at sunset outside Scheibenhard, near Strasbourg, France, October 6, 2017 . REUTERS/Christian Hartmann

October 13, 2017

By Henning Gloystein

SINGAPORE (Reuters) – Oil prices rose on Friday as both U.S. crude production and inventories declined, pointing towards a tightening market.

Strong Chinese oil import data also supported crude prices, traders said.

With the Organization of the Petroleum Exporting Countries (OPEC) leading a production cut, analysts said that global oil markets were now broadly balanced after years of oversupply.

U.S. West Texas Intermediate (WTI) crude was at $50.94 per barrel at 0500 GMT, up 34 cents, or 0.7 percent, from their last settlement. Brent was at $56.59, up 34 cents, or 0.6 percent.

U.S. crude inventories dropped 2.7 million barrels in the week to Oct. 6, to 462.22 million barrels, the Energy Information Administration (EIA) said late on Thursday.

Crude production slipped 81,000 barrels per day (bpd) to 9.48 million bpd.

Strong Chinese oil imports, which averaged 8.5 million bpd between January and September and hit 9 million bpd in September, also supported prices, as China solidified itself as the world’s biggest importer.

“Oil imports into China remained strong…(with the) year-to-date growth rate at 12.2 percent. This should allay concerns of weak demand in China,” ANZ bank said.

Despite the tightening market, Bernstein Research said that OPEC would need to extend the cuts beyond the current expiry date in March 2018 to further reduce excess stocks.

“OPEC will not achieve normalized inventory levels before cuts expire at the end of March,” Bernstein said, but added that “we believe an extension of cuts through 2018 should allow inventories to reach normalized levels before the end of 2018.”

OPEC, together with other producers including Russia has been restraining output since January. The pact to cut production is set to expire by the end of March 2018, and there are discussions for an extension.

Traders said they were awaiting a decision later on Friday by U.S. President Donald Trump on whether to continue to certify the 2015 Iran nuclear deal.

Trump is expected not to certify the agreement, which has to be re-certified every 90 days and is due for renewal on Sunday.

The step would not withdraw the United States from the deal but would give the congress 60 days to decide whether to reimpose new sanctions.

“U.S. sanctions could cut off a lot of Iranian oil trade finance,” FGE President Jeff Brown told Reuters this week.

“Last time we saw this, it cut off 1 million bpd of supplies. I don’t think it’d be that big this time round, but it would still be significant,” said Brown.

(Reporting by Henning Gloystein; Editing by Joseph Radford and Kenneth Maxwell)

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Major League Baseball roundup

2017 10 12T235814Z 1 LYNXMPED9B22S RTROPTP 0 BASEBALL MLB NYY TOR 1 - Major League Baseball roundup

2017 10 12T235814Z 1 LYNXMPED9B22S RTROPTP 0 BASEBALL MLB NYY TOR 1 - Major League Baseball roundup
Sep 29, 2017; Bronx, NY, USA; New York Yankees starting pitcher Masahiro Tanaka (19) pitches against the Toronto Blue Jays during the first inning at Yankee Stadium. Mandatory Credit: Brad Penner-USA TODAY Sports

October 13, 2017

(The Sports Xchange) – The New York Yankees tabbed right-hander Masahiro Tanaka to start Friday’s opener of the American League Championship Series against the host Houston Astros.

The Yankees announced their rotation on Thursday, one day after defeating the Cleveland Indians in Game 5 of the AL Division Series. Right-hander Luis Severino will start Saturday’s Game 2 in Houston. Left-hander CC Sabathia will start Game 3 when the series moves to New York, and right-hander Sonny Gray will pitch Game 4.

The Washington Nationals announced left-hander Gio Gonzalez as their starter for Thursday’s winner-take-all Game 5 of the National League Division Series against the visiting Chicago Cubs.

Gonzalez, who was given the nod over right-hander Tanner Roark, will be opposed by Cubs righty Kyle Hendricks. The winner of Thursday’s game will advance to the NLCS to face the Los Angeles Dodgers.

Cincinnati Reds right-hander Rookie Davis is expected to be sidelined into spring training after undergoing surgery to repair a torn labrum and remove a bone spur in his right hip earlier this week, the team announced.

Davis posted a 1-3 mark with an 8.63 ERA in six starts and one relief appearance this season. The 24-year-old’s last start spanned just three innings, as he allowed five runs in a 9-2 loss to the St. Louis Cardinals.

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Mexico central bank signals ‘prudent’ policy amid NAFTA risks

2017 10 12T142605Z 1 LYNXMPED9B17S RTROPTP 0 MEXICO ECONOMY 1 - Mexico central bank signals ‘prudent’ policy amid NAFTA risks

2017 10 12T142605Z 1 LYNXMPED9B17S RTROPTP 0 MEXICO ECONOMY 1 - Mexico central bank signals ‘prudent’ policy amid NAFTA risks
FILE PHOTO: Mexican pesos are seen in this picture illustration August 3, 2017. REUTERS/Edgard Garrido/Illustration/File Photo

October 12, 2017

MEXICO CITY (Reuters) – Mexico’s central bank is likely to maintain a prudent monetary policy stance due to “adverse scenarios” in Mexican-U.S. ties, which could heighten risks for economic growth and the peso, most of the bank’s board members said in minutes published on Thursday.

Mexican, Canadian and U.S. trade talks were under way near Washington on Thursday to re-negotiate the North American Free Trade Agreement (NAFTA).

Mexico’s peso has shed nearly 3 percent since last Tuesday on concerns the talks could founder on U.S. demands that Mexico considers a dealbreaker.

“Clearly the real exchange rate depreciation that we have experienced is clearly a reflection of the uncertainty regarding the future of NAFTA,” central bank Deputy Governor Alejandro Diaz de Leon said at an event in Washington.

Analysts doubt the central bank could move anytime soon to cut interest rates from their highest since early 2009 due to concerns that lower yields on local debt could exacerbate peso weakness.

Last month, Mexico’s central bank unanimously decided to leave unchanged its benchmark rate at 7.0 percent <MXCBIR=ECI>.

The minutes released on Thursday showed a majority of board members said uncertainty over NAFTA talks and the 2018 Mexican presidential election, could affect the peso exchange rate.

“The balance of risks to growth has deteriorated, particularly due to the perception that adverse scenarios related to the bilateral relationship between Mexico and the United States could materialize,” the minutes said.

As a result, the bank said it should be ready to maintain a “prudent” monetary policy position.

U.S. President Donald Trump has criticized NAFTA for luring U.S. manufacturing jobs to low-wage Mexico and has vowed to quit the pact or revise it to reduce his country’s $64 billion trade deficit with its southern neighbor.

The 23-year old NAFTA agreement has become a central tenet of Mexico’s export-led economy.

The central bank minutes show the concern board members had that an end to the pact could negatively impact large parts of the economy.

However, minutes from the Sept. 28 meeting showed that most board members thought risks to growth and inflation were worse than before. Most said uncertainty around NAFTA and Mexican presidential elections could affect the peso in the short term.

Nonetheless, the bank said it sees annual inflation trending toward its 3 percent objective by the end of 2018. The bank said recent earthquakes could result in price rises in some products, but that they would be temporary.

(Reporting by Mexico City Newsroom and Dion Rabouin in New York; Writing by Gabriel Stargardter; Editing by Frank Jack Daniel and W Simon)

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Bitcoin rockets above $5,000 to all-time high

2017 10 12T082929Z 1 LYNXMPED9B0GP RTROPTP 0 GLOBAL BITCOIN 1 - Bitcoin rockets above $5,000 to all-time high

2017 10 12T082929Z 1 LYNXMPED9B0GP RTROPTP 0 GLOBAL BITCOIN 1 - Bitcoin rockets above $5,000 to all-time high
A Bitcoin and Dollar notes are seen in this illustration picture taken September 27, 2017. REUTERS/Dado Ruvic/Illustration

October 12, 2017

By Jemima Kelly

LONDON (Reuters) – Bitcoin smashed through the $5,000 barrier for the first time on Thursday, jumping as much as 8 percent on the day as investors shrugged off the latest warnings on the risks of buying into the booming cryptocurrency market.

Bitcoin, the biggest and best-known cryptocurrency, has chalked up a more than fivefold increase in price this year.

Typically for bitcoin, which at less than nine years old is still highly volatile and illiquid compared with traditional currencies and assets, the precise reason for its recent tear was unclear.

Upcoming splits in its software, reports that Goldman Sachs is considering offering bitcoin trading, rumors that China could ease restrictions, and even a political crisis in Spain’s Catalonia region were all cited by market-watchers as reasons for the rally.

But the main factor could simply be demand from investors wanting ‘in’ on a market that has provided gains exceeding those of any other currency in every year bar one since 2010.

“People are just wanting to be part of it,” said Ryan Nettles, head of FX trading and market strategy at Swiss bank Swissquote, which launched bitcoin trading two months ago. Nettles said interest had been much higher than anticipated and has come from banks, hedge funds and brokers.

“The interest really stems from the media hype,” he added.

On Wednesday Russian President Vladimir Putin warned of the “serious risks” surrounding the nascent market, while Russia’s central bank said it would ban cryptocurrency trading websites.

But that was not enough to put investors off, with bitcoin rallying around 10 percent since then.

Data released last week from SEMrush, a search engine data analytics firm, found the price had a 91 percent correlation with Google searches on bitcoin, suggesting that all news — whether negative or positive — drives up demand, even if bad news can have a temporary negative effect.

Bitcoin almost reached $5,000 at the start of September, but fell back sharply after the head of Goldman Sachs blasted the cryptocurrency as a “fraud” and as China forced exchanges to close down, sparking fears of a broader crackdown.

But after dipping below $3,000 in mid-September, bitcoin has leapt in value by more than 75 percent in four weeks.

“Bitcoin was designed to operate outside of the influence of governments and central banks, and is doing exactly that,” said Iqbal Gandham, Managing Director at retail trading app eToro, which has seen huge increases in cryptocurrency trading volumes.


By 1245 GMT, bitcoin was trading up 8 percent on the day around $5,200 on Luxembourg-based exchange Bitstamp.

Though there have been many warnings about a bitcoin “bubble”, including from European Central Bank Deputy Governor Vitor Constancio, some say it has much further to climb. But determining its value is difficult.

“For most currencies there are several accepted methodologies for estimating relative value, normally based on macroeconomic fundamentals,” said EFG Asset Management’s Global Head of Research, Daniel Murray. “For bitcoin no such fundamentals exist.”

Other cryptocurrencies — whose prices tend to be highly correlated to bitcoin — also rallied. Their total value — or market capitalization — climbed above $160 billion for the first time since early September, according to industry website Coinmarketcap.com.

Two upcoming “forks” in the bitcoin software code, which will create rival clones of the cryptocurrency, were seen by some as a reason for the rise in price, which saw a boost after the “Bitcoin Cash” clone was created at the start of August.

“Investors are seeing the lessons of history in the up-and-coming forks and hoping for an extra dividend,” said Charles Hayter, co-founder of data analysis website Cryptocompare, adding that rumors on online forums that China could reopen exchanges could also be affecting the price.

(Additional reporting by Jamie McGeever; Editing by Catherine Evans)

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Bain Capital leads the charge as Japan’s private equity dealmaking picks up

2017 10 12T060839Z 1 LYNXMPED9B0A5 RTROPTP 0 BAIN JAPAN 1 - Bain Capital leads the charge as Japan’s private equity dealmaking picks up

2017 10 12T060839Z 1 LYNXMPED9B0A5 RTROPTP 0 BAIN JAPAN 1 - Bain Capital leads the charge as Japan’s private equity dealmaking picks up
FILE PHOTO: A reporter raises his hand to ask a question during a news conference by Bain Capital LP Managing Director Yuji Sugimoto (not in the picture) in Tokyo, Japan October 5, 2017. REUTERS/Kim Kyung/File Photo

October 12, 2017

By Kane Wu and Junko Fujita

HONG KONG/TOKYO (Reuters) – Bain Capital is planning on further ramping up its dealmaking in Japan after it came out on top in the recent battle to purchase Toshiba’s semiconductors arm and as it bids to buy out Japan’s third-largest advertising agency, Asatsu-DK (ADK).

In making further acquisitions, the Boston-based Bain would cement its position as one of the most active private equity firms in Japan and help to break down a corporate culture that has been mostly hostile to foreign investors.

“Japan is a hard market. It takes years to build teams, relationships, credibility,” said David Gross-Loh, who is Bain’s co-head of Asia and is in charge of its business in Japan, in an interview. “I wouldn’t be surprised that five years from now we’ll have twice as many deals as we do now.”

Japan’s private equity market is small relative to its economy, the world’s third largest. This year, though, the Toshiba acquisition has pushed private equity-backed deals in Japan to a record $22 billion – more than double 2016’s $8 billion, according to Thomson Reuters data.

From 2007 to 2016, some 30-40 buyout deals on average were struck annually with slightly fewer exits each year, according to data provider Preqin. And both deals and exits have been worth a fraction of those done in China every year.

Yet this year has seen a pick up in interest, industry sources say, in part thanks to significant volumes of cash raised in 2016 as funds look to Japan. They are hoping to cash in on demographic shifts — such as the nation’s aging population – changes in corporate governance standards and a more active initial public offering market allowing for future exits.

Bain led a group of investors, including Apple, SK Hynix <000660 KS>, Dell, Seagate Technology Plc and Kingston Technology that agreed to pay $18 billion for the Toshiba chips business after a mammoth bidding battle.


Bain is one of several global private equity firms that opened offices in Japan before the global financial crisis, but it has bet on its own team to forge relationships, rather than rely on banks or advisers – a slower process.

And American rivals have also piled in. KKR & Co is looking to deploy more money in Japan after completing a string of investments, while Carlyle Group targets companies in the upper-mid size with its Japan fund, while seeking larger deals with its funds in other global regions.

Another global name, Blackstone Group, will remain focused on real estate in Japan, a person familiar with the firm said.

But Bain has been ahead, striking two of Japan’s five largest private equity-backed M&A deals, with Toshiba the biggest. KKR’s $4.2 billion acquisition of auto parts maker Calsonic Kansei Corp is the second largest.

Gross-Loh said that Bain is able to catalyze growth at Japanese domestic businesses that were stable and well-managed but weren’t exposed to global rivals and therefore not as competitive as they could be.

Both Bain and Carlyle last year participated in the high-profile auction of Takata Corp, which filed for bankruptcy in June after its air bags were linked to deaths and injuries.

According to people familiar with the deal, Bain is part of the winning bid for Takata, led by Chinese-owned U.S.-based Key Safety Systems. Bain declined to comment on Takata.


In a decade, Bain has invested in a wide range of companies in Japan, from hot spring chains, wind farms to a mushroom growing business. Bain invests in Japan out of its Asian funds and sometimes use dry powder from its global funds for larger transactions – such as the Toshiba deal.

One of its most lucrative deals in Japan was a $67 million investment in Domino’s Pizza Japan in 2010, which as of May this year generated an internal rate of return of 156 percent, according to data from Centre for Asia Private Equity Research.

Bain has been patient.

It started talking to the corporate level of Toshiba about seven years ago, while discussions around their semiconductor business started more than two years ago – long before the crisis that prompted the nuclear-to-laptops group to sell out.

It separately spent three years building the relationship with ADK, one of the only three advertising agencies in the country that has access to Japan’s dominating TV networks.

But it is not guaranteed success every time.

Both Toshiba and ADK deals are yet to be completed, and Bain’s buyout offer for ADK has been opposed by the agency’s largest sharehoders.

“As global funds like KKR and Bain are getting bigger, they can allocate more cash to Japan,” said Sam Takata, head of private equity investment at Tokio Marine Asset Management.

“That means the market will become more competitive and firms will have to try more difficult deals to build up their track record.”

(Reporting by Kane Wu in HONG KONG and Junko Fujita in TOKYO; Editing by Clara Ferreira Marques and Martin Howell)

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Trump says U.S.-Canada trade deal possible, excluding Mexico

2017 10 11T050424Z 1 LYNXMPED9A0BE RTROPTP 0 USA WOMEN FORTUNE 1 - Trump says U.S.-Canada trade deal possible, excluding Mexico

2017 10 11T050424Z 1 LYNXMPED9A0BE RTROPTP 0 USA WOMEN FORTUNE 1 - Trump says U.S.-Canada trade deal possible, excluding Mexico
Canadian Prime Minister Justin Trudeau speaks at the 2017 Fortune magazine’s “Most Powerful Women” summit in Washington, U.S., October 10, 2017. REUTERS/Joshua Roberts

October 11, 2017

By Roberta Rampton and David Ljunggren

WASHINGTON (Reuters) – U.S. President Donald Trump said on Wednesday he would be open to a bilateral trade pact with Canada if a deal cannot be reached with Mexico to substantially revise the North American Free Trade Agreement.

Asked by a reporter if he could envision maintaining free trade with Canada if NAFTA talks sour with Mexico, Trump said: “Oh sure, absolutely. It’s possible we won’t be able to reach a deal with one or the other, but in the meantime we’ll make a deal with one.”

He spoke at the White House alongside Canadian Prime Minister Justin Trudeau, on a visit to try to convince the U.S. leader of NAFTA’s merits as a new round of renegotiations began near Washington.

Asked about Trump’s comments at a news conference later, Trudeau said he was still optimistic about the chances of modernizing the 1994 trade pact.

“I continue to believe in NAFTA … so saying, we are ready for anything, and we will continue to work diligently to protect Canadian interests,” Trudeau said.

Trudeau also said that Canada was well aware of Trump’s unpredictability.

“That is certainly something that we are very much aware of and very braced for and conscious of but at the same time, Canadians expect us to work in a thoughtful meaningful way towards getting a good deal.”

The U.S. Chamber of Commerce on Tuesday accused Trump’s administration of trying to sabotage the talks with “poison pill proposals,” including demands for more favorable treatment for the U.S. side on car production, and a “sunset clause” to force regular negotiations.

In his appearance with Trudeau, Trump said “we’ll see what happens” when asked whether NAFTA was doomed.

“It’s possible we won’t be able to make a deal, and it’s possible that we will,” he said. “We’ll see if we can do the kind of changes that we need. We have to protect our workers, and in all fairness, the prime minister wants to protect Canada and his people also.”

U.S. Commerce Secretary Wilbur Ross, one of Trump’s top trade advisers, downplayed the chances that a NAFTA termination would become necessary.

“We don’t hope it will, we don’t desire that it will, we don’t believe that it will, but it is at least a conceptual possibility as we go forward,” Ross said.


Trade experts say the NAFTA talks are likely to stall in the face of aggressive U.S. attempts to sharply increase content requirements for autos and auto parts.

People briefed on U.S. proposals to be presented this week said Washington is seeking to sharply lift North American content threshold in car manufacturing.

The proposals call for North American content overall to rise to 85 percent from the current 62.5 percent. In addition, the United States wants to add a new 50-percent U.S.-specific content requirement, something that was not in the earlier agreements.

“These will be met with widespread opposition from Canada and Mexico. I think it’s just a bridge too far,” said Wendy Cutler, the Asia Society’s Washington policy director and former chief U.S. negotiator for the Trans-Pacific Partnership trade deal canceled by Trump.

The U.S. side sees strengthening the rules of origin for the auto industry as a way to bring back some auto parts production, including electronics, from Asia. But Mexico strongly opposes a U.S.-specific content requirement, which would limit the growth of its own car industry.

The difficult issue of rules of origin will be addressed mostly at the end of the current talks, according to a schedule obtained by Reuters. The negotiations were extended on Wednesday by two days to Oct 17.

Other U.S. proposals opposed by Canada, Mexico and U.S. business interests include the five-year sunset provision, radical changes to NAFTA’s dispute arbitration systems, changes to intellectual property provisions and new protections for U.S. seasonal produce growers.

U.S. Trade Representative Robert Lighthizer said on Wednesday the three nations had completed their negotiations on company competition policy, reaching an agreement that goes beyond previous U.S. trade deals to ensure “certain rights and transparency under each nation’s competition laws.”

(Additional reporting by David Lawder, Ginger Gibson, Makini Brice and Susan Heavey in Washington and Ana Isabel Martinez and Dave Graham in Mexico City; Writing by Alistair Bell; Editing by Nick Zieminski and Tom Brown)

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Short-seller Citron says likely to publish more on Shopify

2017 10 11T171519Z 1 LYNXMPED9A1HS RTROPTP 0 SHOPIFY RESULTS 1 - Short-seller Citron says likely to publish more on Shopify
Canadian e-commerce company Shopify Inc logo is shown on a computer screen in the illustration photo in Encinitas, California May 3, 2016. REUTERS/Mike Blake/File Photo

October 11, 2017

By Alastair Sharp

TORONTO (Reuters) – Short-seller Andrew Left of Citron Research said on Wednesday that he is investigating various aspects of software company Shopify Inc’s business and will “most likely” publish a follow-up to the Oct. 4 report that sent its shares plunging.

“I am looking at many parts of the business,” Left told Reuters, adding that this would include aspects not covered by his initial report.

Asked if he would issue another report he replied: “Most likely.”

Shopify declined to comment.

Its chief executive, Tobi Lutke, tweeted on Tuesday that Left was a “short-selling troll” and he was looking forward to addressing his claims on the company’s next earnings call, due in three weeks.

Left responded that the comment “shows his immaturity as a CEO.”

Shopify, which provides online merchants with websites, payments and shipping services, has been a stock market darling since its trading debut in 2015 and the best-performing stock so far this year on the Toronto Stock Exchange composite index.

But its shares fell more than 11 percent on Oct. 4 after Citron Research published a report alleging the company engages in aggressive marketing practices that oversell the potential for its customers to make money.

The next day Shopify said: “We vigorously defend our business model and stand resolutely behind our mission and the success of our merchants.”

The stock lost more than 20 percent of its value between the close on Oct. 3 and the close on Tuesday. On Wednesday, its U.S.-listed shares rose as much as 4.3 percent to $96.59, but pared gains after the Reuters report to trade up 3.2 percent at $95.55.

This story was refiled to correct typo in headline.)

(Reporting by Alastair Sharp in Toronto; Editing by Jim Finkle and Rosalba O’Brien)

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Fed’s Evans favors gradual approach to monetary normalization

2017 10 11T115258Z 1 LYNXMPED9A0WN RTROPTP 0 USA FED EVANS 1 - Fed’s Evans favors gradual approach to monetary normalization

2017 10 11T115258Z 1 LYNXMPED9A0WN RTROPTP 0 USA FED EVANS 1 - Fed’s Evans favors gradual approach to monetary normalization
FILE PHOTO: Chicago Federal Reserve Bank President Charles Evans takes a question during a round table with the media in Shanghai, China March 23, 2010. REUTERS/Nir Elias/File Photo

October 11, 2017

ZURICH (Reuters) – The U.S. Federal Reserve should adopt a gradual approach to normalizing its expansive monetary policy, U.S. central banker Charles Evans said on Wednesday.

“There is room for honest discussion later this year whether it is the right time to raise rates,” Chicago Federal Reserve Bank President Evans told a Bloomberg event in Zurich. “The state of the economy is quite strong, unemployment low, the labor market is good.

“It makes sense to continue to increase policy gradually as we assess whether inflation is going to get to the 2 percent objective.”

(Reporting by John Revill and Angelika Gruber; Editing by Joshua Franklin)

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VW’s Skoda committed to Czech Republic, plans to add jobs

2017 10 11T065554Z 1 LYNXMPED9A0GP RTROPTP 0 AUTOSHOW GENEVA 1 - VW’s Skoda committed to Czech Republic, plans to add jobs

2017 10 11T065554Z 1 LYNXMPED9A0GP RTROPTP 0 AUTOSHOW GENEVA 1 - VW’s Skoda committed to Czech Republic, plans to add jobs
The logo of Skoda is seen during the 87th International Motor Show at Palexpo in Geneva, Switzerland March 8, 2017. REUTERS/Arnd Wiegmann

October 11, 2017

PRAGUE (Reuters) – Volkswagen’s Czech carmaker Skoda Auto underscored its commitment to its home country on Wednesday, saying it was planning to add jobs there amid worries the business could lose some production to Germany.

Skoda has become Volkswagen’s (VW) second most profitable brand in terms of operating margin and is on target for record sales in 2017. But capacity is hitting a limit and its success is causing tensions inside the German car group.

Reuters reported last week that VW managers and unions were seeking to curb competition from lower-cost Skoda and move some of its production to Germany, raising worries among Czech workers.

Skoda Chief Executive Bernhard Maier told reporters on Wednesday the Czech Republic would remain Skoda’s home and that it was adding jobs locally to meet capacity demands.

“Skoda is running at the edge of its capacity, which is evidence that our strategy is working,” he said.

“At the moment, concerning global demand, we are not able to cover it from the Czech Republic, (and) for this reason we are looking around at other production capacities.”

Maier added Skoda had taken on 3,000 workers in recent months and was planning to hire more “to be able to cover rising demand.” He said Skoda was in talks with unions about this.

Skoda sold a record 1.13 million vehicles last year.

Skoda and other industry players met on Wednesday with government officials. At a news conference, Prime Minister Bohuslav Sobotka said Skoda had assured him it would do the maximum not to jeopardize jobs.

Skoda’s Czech union has warned any production shift could result in as many as 2,000 lost jobs at Skoda, which employed 28,000 at the end of 2016, excluding temporary staff.

Tensions between VW’s various carmaking brands are expected to rise ahead of a Nov. 17 supervisory board meeting due to approve annual investment budgets across the group.

Maier told staff, in a letter seen by Reuters last week, that the Czech unit would only make use of VW’s wider manufacturing network to cope with peaks in demand.

“As a matter of principle, our Czech factories are and will remain first choice,” Maier said in the letter.

The Reuters report also cited sources as saying VW wanted the Czech brand to pay more for shared technology. Asked about this on Wednesday, Maier said he saw no reason for any change.

(Reporting by Robert Muller; Writing by Jason Hovet; Editing by Jason Neely and Mark Potter)

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Wal-Mart rally pushes Dow to all-time high

2017 10 10T113208Z 1 LYNXMPED990VR RTROPTP 0 USA STOCKS 1 - Wal-Mart rally pushes Dow to all-time high

2017 10 10T113208Z 1 LYNXMPED990VR RTROPTP 0 USA STOCKS 1 - Wal-Mart rally pushes Dow to all-time high
Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., October 4, 2017. REUTERS/Brendan McDermid

October 10, 2017

By Noel Randewich

(Reuters) – The Dow Jones Industrial Average hit a record high on Tuesday, helped by a surge in Wal-Mart Stores, while Amazon and Facebook lost ground and investors focused on upcoming quarterly reports.

Wal-Mart <WMT.N> jumped 4.47 percent to a two-year high after forecasting U.S. online sales would rise by about 40 percent in the next fiscal year and unveiling a $20-billion share buyback.

That helped the S&P 500 consumer staples index <.SPLRCS> jump 0.99 percent, although gains in that sector were limited by P&G <PG.N>, which dropped 0.54 percent after activist investor Nelson Peltz unexpectedly failed in his bid to win a board seat.

Third-quarter corporate reporting season kicks into high gear on Thursday with results from JPMorgan Chase <JPM.N> and Citigroup <C.N>. With the S&P 500 up 14 percent in 2017, investors are betting on strong earnings growth across the S&P 500.

Wall Street has mostly shrugged off recent saber-rattling between the United States and North Korea, as well as a lack of progress by President Donald Trump in delivering promised corporate tax cuts.

“The only fear in this market is the fear of missing out,” said Dennis Dick, a proprietary trader at Bright Trading LLC in Las Vegas. “But things can change quickly. There’s stuff out there, like North Korea. You still have to be cautious.”

The Dow Jones Industrial Average <.DJI> rose 0.31 percent to 22,830.68 points, a record-high close. It is up 15.5 percent in 2017.

The S&P 500 <.SPX> gained 0.23 percent to 2,550.64 and the Nasdaq Composite <.IXIC> added 0.11 percent to 6,587.25.

The tech index <.SPLRCT>, the best performing among the 11 major S&P sectors this year, was mostly unchanged, with Facebook falling 0.53 percent and Nvidia <NVDA.O> adding 1.91 percent after unveiling chips for autonomous vehicles, bringing its gain over the past year to 182 percent.

American Airlines <AAL.O> jumped 4.80 percent and United Continental <UAL.N> soared 4.67 percent after the two airlines gave encouraging third-quarter forecasts. Delta <DAL.N>, which reports on Wednesday, rose 1.85 percent.

Energy stocks <.SPNY> got a boost from a near 2-percent rise in oil prices supported by Saudi Arabian export cuts in November and comments from OPEC and trading companies that the market is rebalancing after years of oversupply.

Advancing issues outnumbered declining ones on the NYSE by a 1.90-to-1 ratio; on Nasdaq, a 1.58-to-1 ratio favored advancers.

About 5.6 billion shares changed hands on U.S. exchanges, well below the 6.1 billion daily average for the past 20 trading days, according to Thomson Reuters data.

(Additional reporting by Sruthi Shankar in Bengaluru; Editing by Savio D’Souza and Nick Zieminski)

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