News updates from March 18: Biden warns Rafah invasion would be ‘a mistake’; Nvidia unveils ‘superchip’

Nvidia’s announcement of its powerful new artificial intelligence chip and the companies that would be using it first gave a boost to the shares of several tech groups in extended trading, though its own shares slid.

Applied Digital gained more than 4 per cent after Nvidia said the data centre operator would be among the first companies to begin using its new “Blackwell” graphics processing units in their cloud services later this year. Amazon, Alphabet, Microsoft and Oracle will also be among the first Blackwell users, though their shares were fluctuating between small gains and losses.

Software makers Ansys, Cadence and Synopsys were each up about 3 per cent as Nvidia said they would also soon begin using Blackwell-based processors.

Nvidia also said Taiwan Semiconductor Manufacturing Company and Synopsys were going into production with its own special platform to accelerate manufacturing for the next generation of advanced chips.

US-listed depository receipts of TSMC were up slightly.

Nvidia shares were down 0.6 per cent.

Nvidia has unveiled its latest artificial intelligence chips, which the company claims are far more powerful than its existing market-leading hardware, as it sets its sights on extending its domination of the burgeoning industry.
 
Chief executive Jensen Huang said on Monday that Nvidia’s new Blackwell graphics processing units will massively increase the computing power driving large language models. The Blackwell GPU has 208bn transistors, compared with last year’s H100, which has 80bn, a measure of its increased power.

“Ladies and gentlemen, I would like to introduce you to a very, very big GPU,” Huang told a packed audience at the SAP Center in San Jose, California, where Nvidia is holding its annual developer conference.

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Wall Street equities started a busy week of central bank decisions on the front foot, even as US Treasury yields hit their highest level so far this month.

The S&P 500 closed 0.6 per cent higher on Monday. All sectors rose, though tech was the best performer by a wide margin. The Nasdaq Composite increased 0.8 per cent. All Magnificent Seven stocks advanced.

Treasuries sold off for the sixth session in a row, as investors consider the prospect of interest rates staying higher for longer to combat sticky inflation. The yield on the two-year and 10-year notes each traded to their highest level since late February.

The price of oil hit a four-month high, with benchmark Brent crude rising 1.8 per cent to $86.69 a barrel.

US energy secretary Jennifer Granholm told oil and gas executives on Monday that the White House freeze on liquefied natural gas terminal approvals will be “well in the rear-view mirror” by this time next year. 

“This is just a pause to see what the future should bring,” Granholm said at the CERAWeek conference in Houston. “I predict that as we sit here next year . . . this will be well in the rear-view mirror.”

The US is the largest exporter of natural gas in the world. Granholm’s statement comes as the White House faces intense scrutiny from the fossil fuel industry for its decision in January to pause permits for new LNG terminals and is the first suggestion of how long the Biden administration plans to hold its LNG pause. 

The chief executive of ExxonMobil has insisted that its tense dispute with Chevron over a prized Guyana oilfield will not damage the working relationship between the two US oil companies, even as the spat threatens to derail the biggest acquisition in Chevron’s history. 

Exxon has begun an arbitration process against Chevron over the latter’s $53bn deal for Hess, arguing it has the right of first refusal over Hess’s stake in the oil-rich Stabroek Block off the coast of Guyana. 

The stand-off between the companies threatens to complicate their relationship as they work together on joint ventures from Kazakhstan to Australia. But Darren Woods insisted the companies — and their leaders — would be able to maintain a “collaborative” relationship. 

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KPMG’s partners have voted “overwhelmingly” to extend Jon Holt’s tenure as UK chief executive after a tumultuous first term that was dominated by his attempts to repair the Big Four firm’s reputation following a series of scandals.

Holt, who took over as UK chief executive and senior partner in April 2021, would lead the firm until September 2029, KPMG said on Monday. The extension was approved by a vote of the firm’s 467 equity partners after a recommendation from the board’s nomination committee.

KPMG has faced numerous challenges since Holt took charge. The former head of audit took over from Bill Michael, who resigned after he told staff to “stop moaning” about pandemic work conditions and dismissed the ides of unconscious bias as “complete and utter crap”.

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A broad rally in US stocks was led by tech gains on Monday, as Treasuries sold off ahead of an eventful week for central banks.

The S&P 500 rose 0.9 per cent, with all sectors rising, and the index rebounding from two consecutive losing sessions last week. The tech-heavy Nasdaq Composite added 1.3 per cent. All Magnificent Seven stocks advanced, led by Tesla, which gained 6.5 per cent, putting it on track for its best day since September.

Treasury prices fell moderately, with the yield on the two-year and 10-year notes rising for the sixth day in a row. Strong US economic data has forced traders to pull back bets on the number of times they expect the Federal Reserve to cut interest rates this year.

The probability of the Federal Reserve starting its rate cut cycle in June has now fallen below 50 per cent, continuing a shift in expectations so far this month.

Ahead of the central bank’s March 20 decision on monetary policy, traders are attaching a 48.6 per cent chance to a quarter-point cut in June, according to Bloomberg data. That is down from a 50.1 per cent on Friday and 62 per cent a week ago.

When Jay Powell said this month that the Fed was “not far” from having the confidence to start cutting interest rates, traders had fully priced in a July cut and many market participants were still betting on a June reduction.

The latest moves follow last week’s sticky inflation data and come as economists polled by the Financial Times indicated they think the Fed will be forced to keep interest rates higher for longer.

Shell’s chief executive warned that Europe’s decline in industrial activity following Russia’s war in Ukraine was an “unsustainable” energy security strategy and urged the continent to keep the import of fossil fuels as a “backbone” as it transitions to renewable energy sources.

Wael Sawan told a room of energy executives at the CERAweek conference in Houston on Monday that the oil major had seen a 10-15 per cent decline in industrial activity in Europe since the start of the war. 

“You cannot achieve energy security by shrinking your energy demand,” Sawan said. “Your only option is a significant move into energy transition opportunities like wind and solar, but you still have to keep the backbone to be able to import fossil.”

Sawan also said that the company “strongly, strongly believed” in liquified natural gas. The company expects 50 per cent growth in the global supply of the chilled fuel by 2040.

European stocks held steady on Monday as traders await a busy week of central bank policy meetings.

The region-wide Stoxx Europe 600 fell 0.1 per cent, as did France’s Cac 40. Germany’s Dax and London’s FTSE 100 were both flat. 

Investors are awaiting monetary policy decisions this week from the Bank of Japan, Federal Reserve, and Bank of England. 

The Bank of Japan will decide early on Tuesday whether to end its decades-long negative interest rate policy. Meanwhile, both the Federal Reserve and the Bank of England are widely expected to keep interest rates on hold, but traders will be looking out for clues on when they might finally begin cutting rates.

UN agencies have warned of an “imminent famine” in northern Gaza, saying it is expected to hit the besieged strip anytime between now and May.

The enclave’s north has endured the worst of the humanitarian crisis triggered by Israel’s siege and offensive on Gaza in the wake of Hamas’s October 7 attack. About 300,000 people have remained in the north after Israel ordered Palestinians to leave the area, which has received minimal amounts of aid. 

A report by Integrated Food Security Phase Classification, which analyses data from UN agencies, said that 1.1mn Gazans — half the strip’s population — had “completely exhausted their food supplies” and were “struggling with catastrophic hunger and starvation”. 

Cindy McCain, executive director of the UN’s World Food Programme, said people were “starving to death right now”. 

The China Securities Regulatory Commission has penalised property developer Evergrande’s mainland operation for falsifying financial records and for fraudulent bond issuance.

Hengda Real Estate has been fined Rmb4.2bn ($580mn) by the CSRC, according to a filing on the Shenzhen stock exchange.

Evergrande is the world’s most indebted property company with some $340bn of liabilities. Its Hong Kong entity was ordered into liquidation this year under a court order that has uncertain implications in the Chinese mainland, where almost all of its assets are based.

Hui Ka Yan, the founder of China Evergrande Group, has also been fined Rmb47mn by the securities regulator and authorities plan to ban him from the country’s markets over the falsified reports, the filing said.

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Donald Trump is unable to raise the $450mn bond needed to postpone the enforcement of a fraud judgment against him in a New York civil court, his lawyers said on Monday.

The former president’s team had spent “countless hours negotiating with one of the largest insurance companies in the world”, the lawyers wrote, but had concluded that “very few bonding companies will consider a bond of anything approaching that magnitude”.

Trump is asking an appeals court to delay the enforcement, having already been refused by one appeals judge on a temporary basis last month.

The renewed request comes days after Trump posted a $91mn bond to stay the enforcement of a separate civil judgment, in which he was found liable for defaming E. Jean Caroll, a writer a jury found he had sexually assaulted in the 1990s.

That bond was underwritten by Chubb.

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Technology stocks lifted Wall Street higher on Monday as traders look ahead to the Federal Reserve’s upcoming rate-setting decision, due on Wednesday.

Wall Street’s benchmark S&P 500 was up about 1 per cent in morning trading in New York. The tech-heavy Nasdaq Composite rose 1.4 per cent, with gains for all of the so-called Magnificent Seven major technology groups.

Alphabet made the biggest contribution to the S&P 500’s ascent, with shares up almost 7 per cent following reports that Apple is in talks to build Google’s Gemini artificial intelligence engine into the iPhone.

English football club Nottingham Forest has been docked four points by the Premier League for breaching financial rules, becoming the second top tier team to be punished this season for overspending. 

The penalty pushed Forest, which is owned by Greek shipping and media magnate Evangelos Marinakis, into the relegation zone. Since being promoted to the top flight in 2022, the club has spent close to £280mn on new players, according to Transfermarkt. 

Forest joins Everton in receiving a points deduction for infringing the Premier League’s so-called profitability and sustainability rules on spending. 

Confidence among US homebuilders is running at its highest level since last July, as easing mortgage rates and a lack of existing properties for sale boost demand for new homes. 

The National Association of Home Builders’ housing market index rose three points to 51 in March, ahead of the reading of 48 expected by economists and above the 50 mark that divides positive and negative sentiment for the first time since July. 

“Buyer demand remains brisk and we expect more consumers to jump off the sidelines,” said NAHB chair Carl Harris. 

The average interest rate for a 30-year mortgage has been below 7 per cent since December, supporting demand as the stock of existing homes for sale remains low.

Saudi Aramco’s chief executive has said the world should “abandon the fantasy of phasing out oil and gas”, arguing low carbon solutions and new energy sources should only be phased in when they are economically competitive.  

Amin Nasser told a major oil and gas conference in Houston on Monday that forecasts by the International Energy Agency that oil demand would peak by 2030 were not going to be met due to surging demand from countries in the global south, who could not afford expensive energy solutions.

“We should abandon the fantasy of phasing out oil and gas, and instead invest in them adequately, reflecting realistic demand assumptions,” he said. “We should phase in new energy sources and technologies when they are genuinely ready, economically competitive.”

Stephanie Cohen, one of the most senior female executives in Goldman Sachs’ history, is leaving to become chief strategy officer of cloud services and cyber security group Cloudflare.

Cohen, a 25-year Goldman veteran, led the Wall Street institution’s failed effort to build up consumer banking. She has been on leave since last year, not long after Goldman chief executive David Solomon announced he planned to sell off part of the Platform Services division, which she ran. Cohen was the first woman to run a core operating division and one of eight women on the 25-member management committee.

“I want to do something that matters with world-class people and in an environment that fosters learning and creativity. I have had the privilege of doing that these last 25 years at Goldman Sachs and cannot wait for what lies ahead!” Cohen posted on LinkedIn.

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Deloitte has launched the biggest overhaul of its global operations in a decade as the Big Four firm seeks to cut costs and reduce the organisation’s complexity in the face of an expected market slowdown.

Under the plan, Deloitte’s main business units will be cut to four — audit and assurance; strategy, risk and transactions; technology and transformation; and tax and legal — from the five the firm has had since 2014.

The reorganisation will reduce costs across the firm, said one person familiar with the plan, but added that a figure had not yet been put on the savings. Deloitte’s global chief executive Joe Ucuzoglu is spearheading the shake-up that will take a year to implement across the more than 150 countries the firm operates in.

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The eurozone’s monthly trade surplus rose to a record high at the start of the year thanks to a sharp drop in the price of energy imports and an uptick in exports.

The balance of trade in goods for the single currency zone reached a surplus of €28bn in January, its highest level since the EU’s statistics agency Eurostat started tracking the data in 2002.

The rebound is good news for the European economy as it underlines how the massive terms of trade shock caused by Russia’s invasion of Ukraine are being unwound.

Last year, the eurozone recorded a trade surplus of €64bn, a marked improvement from the record €335bn trade deficit it suffered in 2022.

GB News, the right-leaning UK broadcaster, has been found to have broken broadcasting impartiality rules over its use of politicians acting as news presenters.

Ofcom, the media regulator, warned that lossmaking GB News was now “put on notice” that any further breaches could lead to a statutory sanction — which could include a fine — for the first time after finding that five separate programmes broke its rules.

The broadcaster has pioneered the use of politicians, including serving Tory MPs such as Jacob Rees-Mogg, former pensions minister Esther McVey and backbencher Philip Davies, to lead its current affairs shows. 

However, five shows presented by the three MPs were found to have breached rules over the broadcaster’s obligation to provide balanced viewpoints when showing news.

Olaf Scholz has described Russia as a “dictatorship”, saying its presidential election at the weekend was “neither free nor fair”.

Christiane Hoffmann, a government spokeswoman, said the German chancellor had no intention of congratulating Vladimir Putin on his victory.

“Today Russia is a dictatorship that is ruled in an authoritarian manner by Vladimir Putin,” said Hoffmann.

“You know that we see this election in Russia at the weekend as neither free nor fair,” she said. “The result was a foregone conclusion.”

Hoffmann said it “wasn’t a democratic election”, since opposition candidates were barred from running and there was “a climate of intimidation, of arrests, and Russia has no free speech”.

Eye-catching share price moves in Europe today include the consumer goods multinational Reckitt and the Swiss computer tech producer Logitech.

Alstom: Shares in the French rail equipment manufacturer rose by almost 10 per cent after Deutsche Bank upgraded its guidance from “hold” to “buy”.

Reckitt: Shares rebounded by 2 per cent from a dramatic plunge on Friday that followed a court award of damages to a woman who said her baby died after consuming formula made by the British consumer goods group.

Marshalls: Shares in the UK-based paving producer fell 8 per cent after the company announced a fall in revenues amid “challenging end market conditions”.

Logitech: Shares in the Swiss computer peripherals manufacturer fell more than 6 per cent after it said its chief financial officer, Charles Boynton, would be stepping down.

Russia’s presidential election was not free or democratic, France has said, as EU diplomats said Vladimir Putin’s declared victory lacked legitimacy.

Putin cemented six more years in the Kremlin in an election that banned opposition parties and barred any criticism of him or his war against Ukraine.

“The conditions for a free, pluralist and democratic election have once again not been met,” France’s foreign ministry said in a statement that condemned Moscow’s decision to stage the election in five Ukrainian territories occupied by Russia.

Josep Borrell, the EU’s chief diplomat, said that the bloc would release a statement after talks.

“This has not been a free and fair election,” said Borrell. “In a highly restrictive environment . . . this election has been based on repression and intimidation.”

UK business secretary Kemi Badenoch said she would be open to the Conservative party accepting more donations from Frank Hester, the businessman accused last week of making racist and misogynistic comments.

Asked on Sky News whether she would be comfortable with the party accepting further donations from Hester, who donated £10mn to the party in 2023, she said that “it is fine for us to be able to accept and forgive and draw a line under it, yes”, given that he had apologised.

She added that the alleged comments, made about MP Diane Abbott, appeared to have been “flippant” and “said a long time ago”.

European stocks edged higher in early trading, following gains in Asia, as investors looked ahead to interest rate decisions from the Bank of Japan on Tuesday and the US Federal Reserve on Wednesday.

The region-wide Stoxx Europe 600 was up 0.1 per cent shortly after the opening bell, pulled higher by energy and rate-sensitive real estate stocks.

US futures also climbed higher. Contracts tracking Wall Street’s benchmark S&P 500 and the tech-heavy Nasdaq Composite were up 0.3 per cent and 0.6 per cent, respectively, ahead of the New York trading session.

UK electronics retailer Currys has revised its profit forecast upwards, in spite of what its chief executive said were “still-challenging markets”.

Currys said its profit before tax this year was now likely to be at least £115mn, up from previous guidance of £105mn-£115mn, thanks to positive like-for-like sales in the UK, Ireland and the Nordics.

The upgrade comes within a week of both JD.com, the Chinese ecommerce group, and US investment group Elliott Management saying they had abandoned plans to make offers for the company.

“We’ve been working to get the Nordics back on track, while keeping up the UK&I’s encouraging momentum,” said chief executive Alex Baldock. “Both are progressing well, despite still-challenging markets.”

Japan’s stock market notched gains ahead of a decision on Tuesday from the country’s central bank on whether to lift interest rates.

The benchmark Topix index gained 1.9 per cent to hit 2,722, close to a multi-decade high reached earlier in the month. The exporter-oriented Nikkei 225 gained 2.7 per cent. The yen weakened 0.1 per cent against the dollar to ¥149.22.

Last week the country’s unions negotiated the largest wage increases in more than three decades, bolstering the case for the Bank of Japan to begin raising rates.

Shares in China’s CATL rose as much as 7 per cent on Monday, as the battery maker’s resilient full-year results and surprise dividend helped revive investor appetite for the company.

Shenzhen-listed shares of the world’s largest electric vehicle battery maker rose 5.6 shortly after the midday break, more than the 0.6 per cent gain in the benchmark CSI 300 index.

The company reported a 44 per cent increase in net income for 2023 on Friday, in line with its guidance, but its fourth-quarter profit dropped, highlighting slowing demand growth. It also announced plans for a cash dividend of Rmb22bn ($3.1bn).

Mainland China’s benchmark index edged up on Monday, with technology names notching the largest gains, following the release of official data showing industrial production grew in the first two months of the year.

The CSI 300 index gained 0.6 per cent in the morning trading session, with state-backed chip designer Cambricon Technologies leading gains with an 11 per cent increase.

Fixed-asset investment in “high-tech manufacturing” rose 10 per cent year on year in January and February, the National Bureau of Statistics said. China has been investing heavily in its semiconductor industry after the US unveiled export controls on leading-edge chips.

China’s industrial activity beat market expectations at the start of the year, offering a boost to policymakers as they struggle to counter a two-year property slowdown that continues to weigh on the world’s second-largest economy.

Industrial production leapt 7 per cent in January and February, official figures showed, the fastest growth rate in two years.

Property investment fell 9 per cent year on year in January and February, while new construction starts plummeted 30 per cent.

China’s economy has struggled to regain momentum against a backdrop of deflation, low consumer confidence and a cash crunch across the country’s major property developers.

Stocks in Japan rose on Monday as the country’s central bank began a two-day meeting to decide whether to raise interest rates for the first time in more than a decade.

The country’s benchmark Topix rose 1.7 per cent in early trading, while the exporter-oriented Nikkei 225 added 2.2 per cent.

Japanese workers at some of the country’s biggest companies secured the biggest pay rises in more than three decades last week, bolstering the case for the Bank of Japan to begin raising interest rates.

The yen weakened 0.1 per cent against the dollar to ¥149.17.

Uber has agreed to pay a A$272mn ($179mn) settlement to Australian taxi drivers to end a long-running legal dispute over its entry into the country’s market.

The class action, which included 8,000 taxi drivers who alleged that Uber gained an advantage over regulated drivers and companies when it entered the market in 2012, was filed in 2019. The settlement is one of the largest ever agreed in Australia.

Uber said in a statement that the settlement would allow it to put “legacy issues” to bed. 

Events: The Bank of Japan begins its two-day monetary policy meeting after the country’s unions secured large pay rises. South Korea hosts an annual democracy summit, with US state secretary Antony Blinken attending.

Economic data: China publishes January-February retail sales, industrial production, fixed-asset investment and unemployment figures.

Corporate results: China Resources Beer announces financial results.

Vladimir Putin is cruising to victory in Russia’s presidential election, cementing his rule for another six years amid his invasion of Ukraine and brutal suppression of dissent.

Early results on Sunday showed the Russian president on track to be re-elected with a record 88 per cent of the vote and turnout of more than 70 per cent, according to the Russian electoral commission with 25 per cent of returns counted.

The outcome — which included totals from five Ukrainian regions occupied by Russia — was a foregone conclusion after the Kremlin outlawed all criticism of Putin or the war and blocked any opposition candidates from running.

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Brazil’s industry ministry has launched a number of investigations into the alleged dumping of industrial products by China as Latin America’s largest economy reels from a wave of cheap imported goods.

At the request of industry bodies, the ministry has in the past six months opened at least half a dozen probes on products ranging from metal sheets and pre-painted steel to chemicals and tyres.

The Brazilian measures come at a time when the world is bracing itself for a flood of exports from China as the world’s second-largest economy struggles with excess capacity amid a property sector slowdown and weak domestic demand.

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Hello and welcome to the working week.

What is the collective noun for interest rate announcements? A pack? A litter? Whatever it is, we have one on our hands.

The headline acts will be the US Federal Reserve, the Bank of Japan and the Bank of England, but we will also have policy updates from (in no specific ranking order) China, Australia, Switzerland, Indonesia, Norway, Turkey, Taiwan, Russia, Brazil and Mexico.

Last week’s unexpected rise in US inflation has raised doubts about whether the Fed will cut rates from 5.5 per cent to 5.25 per cent, as previously expected. My colleagues Claire Jones and Harriet Clarfelt explain the “last mile” challenges that Washington’s rate-setters must overcome.

In contrast, the success of Japanese workers in securing pay rises might push the BoJ to begin raising interest rates again. Read the excellent analysis by my colleagues Kana Inagaki and Robin Harding to understand what lies ahead for Japanese monetary policy.

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