Blog

By Ankur Banerjee

SINGAPORE (Reuters) – Asian shares crept higher on Tuesday while the dollar eased as investors stayed cautious ahead of a crucial U.S. inflation report later in the day that will set the tone for the week filled with central bank meetings.

The U.S. Federal Reserve is widely expected to hold rates on Wednesday, with the spotlight squarely on comments from Chair Jerome Powell during his press conference as well as the central bank’s dot plot and summary economic projections.

Before that, the U.S. Labor Department’s Consumer Price Index (CPI) report later on Tuesday is expected to show inflation still cooling but staying well above the Fed’s 2% annual target, with core CPI expected to come in at 4%.

That has meant investors are hesitant in placing major bets, with MSCI’s broadest index of Asia-Pacific shares outside Japan 0.38% higher. Japan’s Nikkei rose 0.72%.

“Should core CPI come in at or above 4.2% year-over-year, equity traders will likely rush to hit the sell button first and ask questions later,” said IG market analyst Tony Sycamore.

“Should core CPI print at 3.9% or less, it would be the green light for equity markets to extend gains into year-end.” 

Overnight, U.S. stocks registered modest gains but managed to close at new highs for the year. [.N]

In China, blue-chip stocks eased 0.28%, while Hong Kong’s Hang Seng index fell 0.20% as investors looked for signs of policy support after data showed China’s November consumer prices posted their fastest fall in three years.

In a busy week for central bankers, the European Central Bank, Bank of England, Norges Bank and the Swiss National Bank all also meet on Thursday.

Investors have steadily dialled back some of the expectations of the Fed cutting rates early next year. Markets are now pricing in a 45% chance of a rate cut in March compared with 57% a week earlier, according to CME FedWatch tool. Markets though have priced in 75% chance of a rate cut in May.

“While any fireworks (from the Fed meeting) are ruled out, the market will likely be hoping for a message that at least helps keep the current rally intact,” said Gary Dugan, CIO of Dalma Capital.

“We struggle to see how the Fed could endorse such a move higher in bonds and equities when the medium-term strength of economic data is unclear.”

The yield on 10-year Treasury notes eased 0.6 basis points to 4.233% in Asian hours after lacklustre three- and 10-year note auctions on Monday. [US/]

Investors were reluctant to buy Treasuries in the auctions given thinner liquidity with the U.S. consumer price data and the Fed policy meeting on the horizon this week.

The Treasury Department will sell $21 billion in 30-year reopened bonds on Tuesday, following Monday’s auction of $50 billion in reopened three-year notes and $37 billion in 10-year notes.

In currency market, the Japanese yen remained in the spotlight as expectations that the Bank of Japan was ready to walk away from its ultra loose monetary policy faded after Bloomberg reported on Monday, citing sources, that BOJ officials see little need to rush out of negative rates.

Tom Kenny, senior international economist at ANZ, said a hike now seems premature with a backdrop of weak consumer spending but recent trends in inflation and wages suggest the BOJ is edging closer to achieving its 2% inflation target.

“We anticipate the BOJ will start its journey of rate normalising by April 2024 … other aspects of policy stance will remain open for adjustment, such as more tweaks to YCC or its complete end and removing its forward guidance that rates could go lower.”

The Japanese yen strengthened 0.41% to 145.58 per dollar in early Asian trade after sliding nearly 0.8% on Monday. The BOJ is due to meet next week. [FRX/]

The dollar index, which measures the U.S. currency against six rivals including yen, eased 0.067% to 103.99.

Gold prices edged higher after touching a three-week low in the previous session ahead of the inflation report and Fed policy decision. Spot gold added 0.2% to $1,984.29 an ounce. [GOL/]

U.S. crude rose 0.14% to $71.42 per barrel and Brent was at $76.09, up 0.08% on the day. [O/R]

(Reporting by Ankur Banerjee; Editing by Lincoln Feast.)

By Jeff Mason and Trevor Hunnicutt

WASHINGTON (Reuters) – U.S. President Joe Biden on Monday alluded to the complex relationship he has with Israel’s Benjamin Netanyahu, suggesting the prime minister is in a “tough spot” and that the two have had their share of disagreements over the years and at present.

Biden, speaking at a White House reception for the Jewish Hanukkah festival, recalled his decades-long relationship with Netanyahu.

He noted he made an inscription on an old photograph of the two men, using a nickname for the Israeli leader.

“I wrote on the top of it, ‘Bibi I love you but I don’t agree with a damn thing you had to say.’”

“It’s about the same today,” Biden said, to scattered applause from the largely Jewish audience, adding that Israel is in a “tough spot” and that “I’ve had my differences with some Israeli leadership.”

He did not elaborate on what differences between the two men remained, though in recent weeks they have included issues spanning the current war against Hamas and treatment of Palestinians.

Biden has weathered intense criticism for his support for Israel’s response to Hamas’ Oct. 7 cross-border attack, when the militants killed 1,200 people and took 240 hostage, according to Israeli tallies. About 100 hostages have since been freed.

Israel’s retaliatory assault has killed 18,205 people and wounded nearly 50,000, according to the Gaza health ministry, drawing sharp rebukes within the United States.

Biden told Jewish people celebrating the holidays at the White House that, differences with Israeli leadership aside, his “commitment” to the “independent Jewish state is unshakeable.”

He added: “Folks, were there no Israel, there wouldn’t be a Jew in the world that was safe.”

He said assistance to Israel would continue until Hamas was routed out but warned that public opinion could shift in grave ways for Israel’s security.

“We have to be careful,” Biden said. “They have to be careful. The whole world’s public opinion can shift overnight. We can’t let that happen.”

Biden said the United States would continue to work to free hostages still held in Gaza, speed humanitarian aid to Palestinians and “emphasize to our Israeli friends we need to protect civilian life.”

(Reporting by Jeff Mason and Trevor Hunnicutt; Editing by Michael Perry)

(Reuters) -Netflix was back up for most users, after the streaming giant said it had resolved the “technical issues” that had caused an outage for thousands of users in the U.S. on Monday.

Netflix was down for thousands of users earlier in the evening, according to outage tracking website Downdetector.com.

Downdetector, which tracks outages by collating status reports from several sources including users, showed about 984 reports of outages as of 20:00 ET, down from nearly 17,000 reports at 18:41 ET.

Netflix, in an emailed statement, had said that it was facing “unexpected technical issues” for some members.

(Reporting by Chandni Shah and Disha Mishra in Bengaluru; Editing by Rashmi Aich)

By Joe Skipper and Steve Gorman

CAPE CANAVERAL, Florida (Reuters) -A planned Monday night launch of the U.S. military’s secretive X-37B robot spaceplane on its seventh mission to orbit, and its first flight atop a SpaceX Falcon Heavy rocket, was postponed for at least 24 hours, SpaceX said.

The flight was called off for the night about 25 minutes before the start of a targeted launch window set to open at 8:14 p.m. EST (0114 GMT Tuesday) as the rocket stood poised for liftoff from NASA’s Kennedy Space Center in Cape Canaveral, Florida.

In a message posted on the social media platform X, Elon Musk’s California-based rocket venture said the countdown was halted “due to a ground side issue,” adding that the “vehicle and payload remain healthy.” SpaceX did not elaborate.

The company did not immediately say when it would try again. The mission’s next launch opportunity is Tuesday night, SpaceX said.

The original plan to send the spacecraft to orbit late on Sunday was scrubbed due to poor weather conditions at the Cape.

The delays came on what was to have been the seventh mission flown by the X-37B, and its first launch atop a Falcon Heavy, composed of three reusable rocket cores strapped together and capable of lofting the vehicle far higher in orbit than ever before.

Roughly the size of a small bus and resembling a miniature space shuttle craft, the X-37B is built to deploy various payloads and conduct technology experiments in long-duration orbital flights.

The X-37B has flown six previous missions since 2010, its last flight lasting well over two years before the vehicle’s return landing in November 2022.

The U.S. Defense Department discloses few details about its operation, which is carried out as part of the military’s National Security Space Launch program.

(Reporting by Joe Skipper in Cape Canaveral, Florida, and Steve Gorman in Los Angeles; Additional reporting by Joey Roulette in Washington; Writing by Steve Gorman; Editing by Nick Zieminski, Stephen Coates and Leslie Adler)

By Ross Kerber, Simon Jessop and Peter Henderson

BOSTON/DUBAI/SAN FRANCISCO (Reuters) – A growing list of global companies are setting a price or charging themselves for each metric ton of their carbon emissions, looking to shape their investments and business for future pollution taxes or other new climate rules.

Their prices are all over the place, from less than $1 per metric ton of carbon emissions to $1,600, the most of any company worldwide, set by California drugmaker Amgen.

Regulators, too, have offered a range of prices, including the Biden administration’s “social cost” of carbon, around $200, and a suggestion from the International Monetary Fund that it should be at least $85 by 2030.

Incorporating the cost of carbon dioxide and other greenhouse gas emissions into business decisions has been a dream of climate activists for decades as a way to force corporations to cut emissions.

While a standardized global carbon price is not going to be set at the COP28 climate summit underway in Dubai, the concept has many uses in business such as enabling executives to charge their own divisions extra to use power from fossil fuels, thus making renewables more attractive.

“While there are other strategies to do so, failure to use this tool could imply that companies may be failing to adequately plan for the medium- to long-term realities of the cost of carbon,” said Amir Sokolowski, global director for climate change at CDP.

An analysis by the non-profit for Reuters found that 20% of 5,345 global companies making climate-related disclosures said they used an internal carbon price last year, up from 17% the year before. Another 22% planned to do so in the next two years, although historically only a fraction of the companies that planned to implement one have done so.

The analysis from CDP, not previously published, reveals both that companies have embraced the new planning tool but also that much debate remains about what prices will spur significant action by companies to cut emissions.

Shown the trends, several analysts told Reuters the emerging picture is one of executives getting ready for some type of new emissions regulation even if they lack a clear sense of what’s ahead.

Companies are “getting ready for the reality that it’s going to be required” said Columbia University economist Joseph Stiglitz. But the median prices are still too low to have a major impact on corporate decision-making, making the effort a “mixed bag”, the Nobel Prize winner said.

Companies do not have a simple path to follow, since using a high carbon price can dramatically change investment plans, while using a low one can bring charges of “greenwashing.”

Several executives who spoke with Reuters said internal pricing plans help them cut emissions and clarify the implications of capital spending and other business activities for the planet.

Market prices for carbon offsets can range from $5 to $1,500 a metric ton, said Joe Speicher, chief sustainability officer at software maker Autodesk.

Autodesk has steadily raised its internal carbon price to $20. Ideally regulators would clarify how companies should treat emissions costs, Speicher said. “Wouldn’t it be nice to have a public authority to help to create a more coherent market?” he said.

The company uses the price to help identify things like the value of its investments in carbon-removal projects, he said.

TYING IN TO MARKETS

Various carbon markets operate globally, including the European Trading System (ETS), where carbon currently trades around $70 per metric ton.

British Airways owner IAG in its CDP disclosure offered a range of internal carbon prices from 10 to 130 euros (about $11-$140) per metric ton that are used in connection with or to prepare for different regulations and agreements, including UK emissions targets and ETS compliance.

Different regulatory approaches have resulted in a range of prices around the globe, said IAG Sustainability Insights Manager Michael Evans.

The multitude of price by companies reflects many different factors, he said: “Variations in carbon prices can reflect wider economic outlooks, levels of financial investor interest, and even energy demand.”

Many companies have designed their own internal mechanisms. When carmaker Volvo embraced internal carbon pricing, it could not find a good model to follow because “very, very few companies” used such prices throughout their business, Jonas Otterheim, Volvo’s head of climate action, said in an interview.

Volvo has incorporated a “shadow price” of 1,000 krona per metric ton, about $92, in decisions ranging from which model vehicles to produce to what materials to use in factories. Adding the cost of carbon pollution to aluminum, for instance, made using aluminum created with renewable energy a “super high priority” because it has less than a quarter of the carbon emissions of typically made material, he said.

Similarly, Volvo reconsidered the real cost of its bigger cars as stricter EU rules come into effect.

The discussion “actually made us change the whole volume planning of the company to say that we should not prioritize some cars versus other even though they look more profitable, because they will actually sort of give us a penalty that other cars won’t,” Otterheim said.

Drugmaker Amgen assesses an “internal fee” of $1,000 per metric ton on higher-emitting projects. Proceeds are then used to fund emissions-cutting projects. For example, a utility expansion project in Ireland added $700,000 to its sustainability budget, a spokesperson said.

In its 2023 CDP climate report, Amgen said it also uses an “investment evaluator” to judge whether to buy new emissions-reduction equipment, using an even higher price for carbon.

“Sustainability projects that cost more than traditional projects but are less (than) $1,600 per (metric ton) of CO2e emissions reduced are considered reasonable for design,” the report states. Amgen as a science-based company aims to be carbon-neutral within its own operations by 2027, the spokesperson said.

A PRICE THAT BITES

Several analysts who spoke with Reuters offered a range of views about what price companies should use.

Gunther Thallinger, a board member of German insurer Allianz and a member of a U.N. climate advisory council, said a comprehensive global carbon market would be “a massive boost” to efforts to cut emissions. But the current variation in prices is a problem, especially with some prices below $5 per metric ton.

“I fear this is going in the direction of greenwashing,” he said.

However, Anita McBain, head of EMEA ESG Research for Citi, said practical uses matter more than high prices.

“We’d rather see a carbon price with teeth than one without. We’d rather see a $25 price that’s actually influencing decisions versus a $75 price that’s just a tick-the-box,” she said.

___

For the latest news from companies, data, and decisions around ESG finance, sign up for the Sustainable Finance newsletter here.

(Reporting by Ross Kerber in Boston, Simon Jessop in Dubai, and Peter Henderson in San Francisco; Editing by Lisa Shumaker)

SINGAPORE (Reuters) – The yen nursed losses on Tuesday as traders walked back expectations for a Japan rate hike, while the dollar was waiting on U.S. inflation data and a slew of central bank meetings.

The dollar rose about 0.9% on the yen overnight. At 145.96 yen it is about 3% above a low touched last week after remarks on the challenging outlook from Bank of Japan Governor Kazuo Ueda were taken as a hint that a policy shift was imminent.

Bloomberg reported on Monday, citing sources, that BOJ officials see little need to rush out of negative rates, triggering a reversal of the yen’s rally and gains in Japan’s stock and government bond markets. [.T][JP/]

“Wages growth is still weak,” Commonwealth Bank of Australia analyst Kristina Clifton pointed out in a note.

“We do not expect the BOJ to end negative interest rates until Q2 24 at the earliest … The wide differential between U.S. and Japanese 10-year government bond yields can continue to support dollar/yen.”

Other currency pairs were broadly steady with the euro at $1.0765 as the market focus turns on U.S. inflation data, due at 1330 GMT, and beyond it to Wednesday’s Federal Reserve policy decision.

Sterling held at $1.2555. The Australian dollar, floated four decades ago on Tuesday, was kept to $0.6564 and the New Zealand dollar to $0.6122.

The dollar has been sliding since October’s benign U.S. inflation report but found a footing on upbeat jobs data published on Friday. The Fed is considered certain to hold rates at 5.25%-5.50% this week, putting the focus on the so-called dot plots for rates and Chair Jerome Powell’s press conference.

Expectations for a March cut have ebbed, though May is seen as a better-than 3/4 chance.

Economists polled by Reuters expect headline inflation to have been flat for November, and core inflation to keep steady at an annual pace of 4% – well above the Fed’s 2% target.

“Overly exuberant ‘pivot zealots’ may be set up for stumbles over the markets-Fed expectations gap,” said Mizuho economist Vishnu Varathan.

“Of particular interest will be where the median rate forecast for 2024 lands,” he said in a note.

“Markets are banking on more emphatic cuts of (about) 100bp whereas the Fed may be more stoic with more measured reductions.”

The European Central Bank, Bank of England, Norges Bank and the Swiss National Bank then all meet on Thursday, with Norway the only one considered a possible hiker. There is also a risk the SNB dial back its support for the franc in FX markets.

The franc made an almost nine-year high on the euro last week and traded a little softer than that at 0.9455 francs to the common currency on Tuesday.

========================================================

Currency bid prices at 0049 GMT

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid

Previous Change

Session

Euro/Dollar

$1.0766 $1.0765 +0.01% +0.48% +1.0766 +1.0764

Dollar/Yen

145.7650 146.1950 -0.27% +0.00% +146.1600 +145.7350

Euro/Yen

156.94 157.31 -0.24% +0.00% +157.3400 +156.8800

Dollar/Swiss

0.8779 0.8787 -0.08% +0.00% +0.8785 +0.8780

Sterling/Dollar

1.2562 1.2555 +0.00% +3.82% +1.2562 +1.2555

Dollar/Canadian

1.3571 1.3574 -0.01% +0.00% +1.3579 +1.3572

Aussie/Dollar

0.6570 0.6568 +0.04% -3.62% +0.6570 +0.6564

NZ

Dollar/Dollar 0.6125 0.6124 +0.02% -3.54% +0.6126 +0.6120

All spots

Tokyo spots

Europe spots

Volatilities

Tokyo Forex market info from BOJ

(Reporting by Tom Westbrook; Editing by Sonali Paul)

By Gertrude Chavez-Dreyfuss

NEW YORK (Reuters) – Bond investors are expecting the Federal Reserve this week to temper the market’s conviction that U.S. interest rates will be cut early next year, even as portfolios get positioned for lower yields later in 2024.

Many portfolio managers have reduced long-duration bets to be more neutral on their bond positions, at least in the short term. Going long duration against a benchmark reflects expectations U.S. yields will fall because the Fed will cut rates.

Investors widely expect the Fed to hold interest rates steady on Wednesday but do not expect it to signal a shift from its tightening policy stance. According to a Reuters poll of economists, the Fed will keep rates unchanged until at least July, later than earlier thought.

In contrast, federal funds futures, the most straightforward measure of determining where traders believe the Fed’s benchmark overnight rate will be at any given time, lowered the odds of a rate cut in March on Friday, pricing in about a 46% chance, from 64% a week ago following a stronger-than-expected U.S. payrolls report.

Futures traders still saw a 79% chance in May, according to the CME’s FedWatch, but that was also down from 90% a week earlier.

Fed Chair Jerome Powell had said, in a Dec. 1 speech, that while the target rate is “well into restrictive territory,” the Fed is prepared to tighten policy further if deemed appropriate.

“There’s a real disconnect between what the Fed says and what they would like to see in terms of tighter financial conditions and what the market is doing,” said John Velis, head of U.S. macro strategy, at BNY Mellon in New York.

“What that means is that Dec. 13 is going to be a hawkish meeting. I don’t think the Fed will announce a pivot. You may see the dots push back against market pricing for early rate cuts,” referring to the Fed’s closely followed dot plot, which comes out four times a year and graphs policymakers’ rate projections.

Recent U.S. economic numbers have shown a resilient economy despite aggressive rate hikes since March last year.

Friday’s U.S. non-farm payrolls, for example, showed a still-robust labor market, creating 199,000 new jobs in November, beating consensus expectations and rising from the previous month. The unemployment rate also slipped to 3.7%.

U.S. inflation is slowing but is still a ways away from the Fed’s 2% inflation target.

BIG BOND RALLY

With investors anticipating Fed rate cuts, investors bought Treasuries, pushing 10-year yields 78 basis points (bps) lower since November, and two-year yields down roughly 49 bps.

The rapid decline in yields has made “financial conditions looser than they otherwise would have been,” said James Camp, managing director of fixed income and strategic income, at Eagle Asset Management.

That was a reversal from late October when the 10-year yield hit 5%. Market participants reckoned at the time that the Fed may not be as aggressive in raising rates because the bond market was doing the job for them by pushing yields higher.

“We now have the mirror opposite of that,” Camp said. “It’s going to be interesting to see if there’s a hawkish dialogue from the Fed because I think they need to do that if they really want the economy to continue to slow.”

FROM LONG TO NEUTRAL, FOR NOW

With asset managers betting on “higher-for-longer” rates at least until the summer, their portfolios have become more neutral or closer to their benchmark, from being long duration.

Duration, expressed in years, measures how much a bond’s price will move when the Federal Reserve changes interest rates.

“We were at the longest duration a couple of weeks ago,” said Andrew Szczurowski, head of agency mortgage-backed securities and portfolio manager at Morgan Stanley Investment Management.

Szczurowski said with the 80-90 basis point drop in yields, “we’re getting closer to neutral.”

The ultimate goal, however, is still to extend duration as the Fed will eventually cut rates. When the Fed embarks on an easing cycle, longer-duration securities tend to rally.

“We see the beginnings of recession actually hitting in the second quarter and we expect the Fed to cut at the back half of the year,” said Eagle’s Camp.

(Reporting by Gertrude Chavez-Dreyfuss; Editing by Alden Bentley and Lisa Shumaker)

(Reuters) -Rapid advances in artificial intelligence (AI) such as Microsoft-backed OpenAI’s ChatGPT are complicating governments’ efforts to agree laws governing the use of the technology.

Here are the latest steps national and international governing bodies are taking to regulate AI tools:

AUSTRALIA

* Planning regulations

Australia will make search engines draft new codes to prevent the sharing of child sexual abuse material created by AI and the production of deepfake versions of the same material.

BRITAIN

* Planning regulations

Leading AI developers agreed on Nov. 2, at the first global AI Safety Summit in Britain, to work with governments to test new frontier models before they are released to help manage the risks of the developing technology.

More than 25 countries present at the summit, including the U.S. and China, as well as the EU, on Nov. 1 signed a “Bletchley Declaration” to work together and establish a common approach on oversight.

Britain said at the summit it would triple to 300 million pounds ($364 million) its funding for the “AI Research Resource”, comprising two supercomputers which will support research into making advanced AI models safe, a week after Prime Minister Rishi Sunak had said Britain would set up the world’s first AI safety institute.

Britain’s data watchdog said in October it had issued Snap Inc’s Snapchat with a preliminary enforcement notice over a possible failure to properly assess the privacy risks of its generative AI chatbot to users, particularly children.

CHINA

* Implemented temporary regulations

Wu Zhaohui, China’s vice minister of science and technology, told the opening session of the AI Safety Summit in Britain on Nov. 1 that Beijing was ready to increase collaboration on AI safety to help build an international “governance framework”.

China published proposed security requirements for firms offering services powered by generative AI in October, including a blacklist of sources that cannot be used to train AI models.

The country issued a set of temporary measures in August, requiring service providers to submit security assessments and receive clearance before releasing mass-market AI products.

EUROPEAN UNION

* Planning regulations

EU lawmakers and governments reached on Dec. 8 a provisional deal on landmark rules governing the use of AI, including governments’ use of AI in biometric surveillance and how to regulate AI systems such as ChatGPT.

The accord requires foundation models and general purpose AI systems to comply with transparency obligations before they are put on the market. These include drawing up technical documentation, complying with EU copyright law and disseminating detailed summaries about the content used for training.

FRANCE

* Investigating possible breaches

France’s privacy watchdog said in April it was investigating complaints about ChatGPT.

G7

* Seeking input on regulations

The G7 countries agreed on Oct. 30 to an 11-point code of conduct for firms developing advanced AI systems, which “aims to promote safe, secure, and trustworthy AI worldwide”.

ITALY

* Investigating possible breaches

Italy’s data protection authority plans to review AI platforms and hire experts in the field, a top official said in May. ChatGPT was temporarily banned in Italy in March, but it was made available again in April.

JAPAN

* Planning regulations

Japan expects to introduce by the end of 2023 regulations that are likely closer to the U.S. attitude than the stringent ones planned in the EU, an official close to deliberations said in July.

The country’s privacy watchdog has warned OpenAI not to collect sensitive data without people’s permission.

POLAND

* Investigating possible breaches

Poland’s Personal Data Protection Office said in September it was investigating OpenAI over a complaint that ChatGPT breaks EU data protection laws.

SPAIN

* Investigating possible breaches

Spain’s data protection agency in April launched a preliminary investigation into potential data breaches by ChatGPT.

UNITED NATIONS

* Planning regulations

The U.N. Secretary-General António Guterres on Oct. 26 announced the creation of a 39-member advisory body, composed of tech company executives, government officials and academics, to address issues in the international governance of AI.

UNITED STATES

* Seeking input on regulations

The U.S., Britain and more than a dozen other countries on Nov. 27 unveiled a 20-page non-binding agreement carrying general recommendations on AI such as monitoring systems for abuse, protecting data from tampering and vetting software suppliers.

The U.S. will launch an AI safety institute to evaluate known and emerging risks of so-called “frontier” AI models, Secretary of Commerce Gina Raimondo said on Nov. 1 during the AI Safety Summit in Britain.

President Joe Biden issued an executive order on Oct. 30 to require developers of AI systems that pose risks to U.S. national security, the economy, public health or safety to share the results of safety tests with the government.

The U.S. Federal Trade Commission opened an investigation into OpenAI in July on claims that it has run afoul of consumer protection laws.

(Compiled by Alessandro Parodi and Amir Orusov in Gdansk; Editing by Milla Nissi and Emelia Sithole-Matarise)

By Laura Sanicola

(Reuters) -Oil prices settled up slightly on Monday as OPEC+ production cuts failed to fully offset worries around crude oversupply and softer fuel demand growth next year.

Brent crude futures settled up 19 cents, or 0.3%, to $76.03 a barrel while U.S. West Texas Intermediate crude futures settled up 9 cents, or 0.1%, at $71.32.

Both contracts jumped more than 2% on Friday but were down for a seventh straight week, their longest streak of weekly declines since 2018, on lingering oversupply concerns.

“There is little doubt that the oil complex remains in a state of vulnerability,” oil broker PVM’s John Evans said in a note on Monday.

Despite a pledge by the OPEC+ group, which comprises the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, to cut 2.2 million barrels per day (bpd) of crude oil production in the first quarter, investors remain sceptical about compliance.

“Members participating in the output curtailments are not only seeing reduced revenue from smaller volumes but also from the price plunge that developed subsequent to the last OPEC+ decision,” said Jim Ritterbusch, president of Ritterbusch and Associates LLC in Galena, Illinois.

Output growth in non-OPEC countries is expected to lead to excess supply next year.

RBC Capital Markets expects stock draws of 700,000 bpd in the first half, but only 140,000 bpd for the full year.

“Prices will remain volatile and directionless until the market sees clear data points pertaining to the voluntary output cuts,” RBC analysts said in a note.

With cuts not implemented until next month, oil faces a volatile two months before clarity from any quantifiable compliance data, the analysts said.

The latest consumer price index data from China, the world’s biggest oil importer, showed rising deflationary pressures as weak domestic demand cast doubt over the country’s economic recovery.

Chinese officials on Friday pledged to spur domestic demand and consolidate and enhance the economic recovery in 2024.

This week, investors are watching for guidance on interest rate policies from meetings at five central banks, including the U.S. Federal Reserve, as well as U.S. inflation data to assess the potential impact on the global economy and oil demand.

Recent price weakness drew demand from the United States, which has sought up to 3 million barrels of crude for the Strategic Petroleum Reserve (SPR) in March 2024.

“We know the Biden Administration is in the market looking to refill the SPR, which will provide support,” IG analyst Tony Sycamore said in a note, adding that prices were also being supported by technical chart indicators.

Meanwhile, a draft of a potential climate deal at the COP28 summit on Monday suggested a range of options countries could take to reduce greenhouse gas emissions, but omitted the “phase out” of fossil fuels many nations have demanded.

U.N. Secretary General Antonio Guterres said a central benchmark of success for COP28 would be whether it yielded a deal to phase out coal, oil and gas use fast enough to avert disastrous climate change.

(Reporting by Laura Sanicola and Paul Carsten; Editing by David Evans, Tomasz Janowski and Deepa Babington)

One of the best end-of-year strategies is the Dogs of the Dow.

You simply buy 10 of the worst performing Dow stocks, which also carry dividends.  By year end, you’ll cash out, and then play the next batch of Dogs of the Dow.

In 2023:

• Verizon (VZ) – which has a current yield of 6.95% — ran slightly from about $38 to $28.25
• Dow Inc. (DOW) – with a yield of 5.5% — jumped slightly from $49.99 to $50.92
• Intel (INTC) – with a yield of 1.17% – ran from $26.72 to $42.70
• Walgreens (WBA) – with a yield of 8.29% – fell from about $37 to $23.16
• 3M (MMM) – with a yield of 5.8% – fell from about $120 to $103.37.
• IBM (IBM) – with a yield of 4.1 % – ran from $140 to $161.96
• Amgen (AMGN) – with a yield of 3.17% — ran from about $258 to $269.12
• Cisco (CSCO) – with a yield of 3.22% — jumped from about $47.48 to $48.38
• Chevron (CVX) – with a yield of 4.19% — fell from about $176 to $144.31
• JPMorgan Chase (JPM) – with a yield of 2.65% — ran from about $134 to $158.52

Seven out of 10 winners, with dividends to boot.  Not bad at all.

The 2022 Dogs of the Dow beat the major indices, even in a “ruff” year. In fact, while the Dogs of the Dow stocks fell 1.6% on the year, once you add in the dividend payouts, the Dogs returned 2% on the year. 

And while 2% may not sound like a big win, consider that, in 2022, one of the worst years on record since 2008, the NASDAQ lost 33%.  The S&P 500 lost 19%.  The Dow Jones lost about 9%. That 2% doesn’t look so bad now, does it?

In 2021, the Dogs of the Dow returned about 16.3%. While 2020 wasn’t a great year for the Dogs, most other years have done very well.  In 2019, the Dogs were up 20%.  In 2018, they were up about 1%, but still beat the Dow, which fell close to 6%.  In 2017, the dogs were up 19%.  In 2016, they were up 16%.

As for the year ahead, the top 10 Dogs of the Dow to consider are Amgen (AMGN), Coca-Cola (KO), Cisco (CSCO), Goldman Sachs (GS), IBM (IBM), Chevron (CVX), Dow (DOW), 3M (MMM), Verizon (VZ), and Walgreens Boots Alliance (WBA).

Buy, hold, wait, and enjoy.