WORLDWIDE: HEADLINES

Tesla edges past Wall St target as bitcoin sales, environment credits boost revenue

Electric carmaker Tesla Inc (TSLA.O) marginally beat Wall Street expectations for first-quarter revenue on Monday boosted by a jump in environmental credit sales to other automakers and liquidating some bitcoins.

Tesla posted record deliveries in the first quarter despite a global chip shortage that has slammed auto sector rivals, but its profit was not driven by auto sales.

Tesla, which had invested $1.5 billion in bitcoin, trimmed its position by 10% during the quarter, said Chief Financial Officer Zachary Kirkhorn. Tesla said proceeds from sales of digital assets amounted to $272 million with a $101 million “positive impact”.

“We do believe long term in the value of bitcoin,” he said. “It is our intent to hold what we have long term and continue to accumulate bitcoin from transactions from our customers as they purchase vehicles.”

Musk tweeted that he has not sold any of his personal bitcoins.

Tesla has posted profits for seven quarters in a row, most quarters driven by environmental credits.

Tesla earned $518 million from sales of those credits, up 46% from a year earlier. Tesla earns credits for exceeding emissions and fuel economy standards and sells them to other automakers that fall short.

Net profit was dented by a $299 million award to Chief Executive Elon Musk. Tesla’s quarterly performance hit targets qualifying the billionaire entrepreneur for two options payouts worth a combined $11 billion.

Full coverage: REUTERS

U.S. business spending on equipment ends first quarter on strong note

New orders for key U.S.-made capital goods rose solidly in March and shipments surged, cementing expectations that economic growth accelerated in the first quarter as massive government aid and improving public health boosted demand.

The strength in business spending reported by the Commerce Department on Monday joined upbeat data on retail sales and the labor market in setting up the economy for what analysts expect will be its best performance this year in nearly four decades.

Economists saw little impact on investment from President Joe Biden’s push for a sweeping overhaul of the U.S. tax system to make rich people and big companies pay more and help foot the bill for the White House’s ambitious economic agenda, including upgrading the nation’s crumbling infrastructure.

Details of the tax proposal could be released before Biden’s address to the U.S. Congress on Wednesday. Economists said there was no evidence that former President Donald Trump’s deep corporate tax cuts boosted business investment.

“It is hard to fathom how partially rolling back the Trump cuts to pay for the infrastructure plan will meaningfully impede business investment,” said Ryan Sweet, a senior economist at Moody’s Analytics in West Chester, Pennsylvania. “There is little relationship between the effective corporate tax rate and changes in real business equipment spending. Most U.S. corporations have no trouble getting cheap capital and they pay among the lowest effective tax rates in the world.”

Orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, increased 0.9% last month. These so-called core capital goods orders fell 0.8% in February after bitterly cold temperatures gripped large parts of the country.

Full coverage: REUTERS

WORLDWIDE: FINANCE / MARKETS

Dollar near multi-week lows before Fed, bitcoin reclaims $54,000

The dollar hovered near multi-week lows versus major peers on Tuesday, weighed by subdued Treasury yields, as investors consolidated positions ahead of the Federal Reserve’s policy decision this week.

The safe-haven greenback was also out of favor after world stocks started the week hitting a record high, amid increasing investor confidence in a rapid global recovery from the pandemic.

In cryptocurrencies, bitcoin traded around $54,000 following a 10% surge on Monday, driven by reports that JPMorgan Chase is planning to offer a managed bitcoin fund.

That snapped a five-day losing streak that took the digital token to the cusp of $47,000, with losses accelerating amid worries about U.S. President Joe Biden’s plan to raise capital gains taxes.

The dollar index, which tracks the U.S. currency against six peers, was little changed at 90.859 early in the Asian session, after dipping to the lowest since March 3 overnight at 90.679.

No change to policy is expected when the Federal Open Market Committee ends its two-day meeting on Wednesday, but the market will pay close attention to comments from Chairman Jerome Powell, who is likely to face questions over whether improving conditions warrant a withdrawal of monetary easing.

Most analysts though expect him to say such talk is premature, which could put downward pressure on Treasury yields and the dollar.

“Currencies outside of the dollar should be doing quite well anyway in that environment.”

The dollar has fallen nearly 3% since late March as U.S. Treasury yields traded in narrow ranges after retreating from a 14-month high of 1.7760%, slashing the currency’s yield appeal.

The benchmark 10-year Treasury yield was around 1.58% on Tuesday, tracking sideways since sliding to a one-month low of 1.528% in the middle of this month.

The euro slipped 0.1% to $1.2078, but remained close to the one-month high of $1.2117 reached Monday.

The offshore Chinese yuan retreated 0.1% after rising to a seven-week top of 6.4710 per dollar on Monday.

The dollar added 0.1% to 108.18 yen, another haven currency, continuing its rise from the seven-week low of 107.48 reached Friday.

Full coverage: REUTERS

Asian shares wobble ahead of Fed outcome and earnings

Asian shares fell and U.S. stock futures were steady on Tuesday as caution ahead of a U.S. Federal Reserve meeting and a slew of corporate earnings offset growing optimism about the global economic recovery from the COVID-19 blow.

MSCI’s broadest index of Asia-Pacific shares outside Japan eased 0.14%. Australian stocks dropped 0.51%, but shares in China were little changed. Stocks in Tokyo edged 0.11% lower.

S&P 500 e-mini stock futures rose 0.07%.

Oil rebounded in Asian trading after major oil producers stood by their demand forecasts, but there are still downside risks due to surging COVID-19 cases in India, the world’s third-biggest oil importer.

Analysts said some investors may be taking profits on equities, but sentiment remains positive due to rising coronavirus vaccination rates in many countries.

“There are two reasons to remain positive on equities and commodities,” said Masayuki Kichikawa, chief macro strategist at Sumitomo Mitsui Asset Management Co in Tokyo.

“The global economy is likely to continue to strengthen and many advanced economies are heading for a reopening due to progress in vaccinations.”

However, despite the hopeful signs, a bullish session on Wall Street failed to inspire Asian markets. The S&P 500 and Nasdaq closed at record highs on Monday, fuelled by heavyweight growth stocks ahead of a deluge of earnings reports this week. The Dow Jones Industrial Average ended 0.18% lower.

In extended trade, Tesla dipped about 0.4% even after the electric car maker beat Wall Street expectations for first-quarter revenue.

Full coverage: REUTERS

Oil falls on India’s COVID surge; OPEC+ limits drop

Oil pared its losses on Monday as the Organization of the Petroleum Exporting Countries and its allies indicated that it was watching surging COVID-19 cases in India, which may dent fuel demand in the world’s third-biggest oil importer.

Brent crude settled 46 cents lower, down 0.7% at $65.65 a barrel, after trading at a session low of $64.57 a barrel. U.S. West Texas Intermediate (WTI) crude ended down 23 cents, or 0.4%, at $61.91 a barrel, after touching a session low of $60.66.

“The market is on guard, coming back from India demand fears on reports that the OPEC technical committee acknowledged potential demand threats from the situation in India,” said Phil Flynn, senior analyst at Price Futures Group in Chicago.

The OPEC+ joint technical committee (JTC) has kept its forecast for growth in global oil demand this year, but is concerned about surging COVID-19 cases in India and elsewhere, three sources from the producer group told Reuters.

OPEC and allies led by Russia, a group known as OPEC+, will discuss output policy at a meeting this week. read more

The group agreed at a meeting at the start of April to ease production curbs by 350,000 barrels per day (bpd) in May, another 350,000 bpd in June and a further 400,000 bpd or so in July.

Both benchmarks fell about 1% last week as India’s COVID-19 infections began to hit record highs.

Consultancy FGE expects gasoline demand in India to drop by 100,000 barrels per day (bpd) in April and by more than 170,000 bpd in May. India’s total gasoline sales came to nearly 747,000 bpd in March.

Diesel demand, which at about 1.75 million bpd accounts for about 40% of refined fuel sales in India, may slump by 220,000 bpd in April and by another 400,000 bpd in May, FGE says.

The market also was pushed lower by over supply worries due to the end of force majeure on exports from a Libyan terminal and an expected supply increase from OPEC+ added to pressure.

Full coverage: REUTERS