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By Naomi Rovnick and Nell Mackenzie

LONDON (Reuters) – Leading hedge funds and mutual funds are betting on gains outside the tech sector in coming months, Goldman Sachs research shows.

The ten stocks currently most favoured by both do not include any of the so-called Magnificent Seven tech titans that now dominate the S&P 500 index, according to research by the investment bank’s prime brokerage unit.

Instead, it said, the shared top picks Goldman identified from analysing more than $5 trillion worth of hedge fund and mutual fund holdings are mostly in financial and medical-related sectors.

The basket of ten shared favourites includes Mastercard, Visa and U.S. healthcare groups United Health, Kenvue and Humana.

After intense crowding into tech megacaps, the Magnificent 7 group that includes Microsoft, Amazon and Facebook owner Meta Platforms accounted for 13% of hedge funds’ long positions last month, Goldman found, twice their weight at the start of 2023.

Yet signs of tech fatigue have emerged in recent weeks as hedge funds became increasingly concerned about their vulnerability to the fortunes of a small group of richly-valued businesses.

Hedge funds sold the largest volume of U.S. tech and media stocks since July in the week to Nov. 24.

Mutual funds, meanwhile, have been lukewarm on the Magnificent Seven for much of this year.

Goldman also said the stocks it has identified as “shared favourites” of hedge funds and mutual funds over the past 10 years have largely outperformed the wider stock market.

“Stocks that are constituents of both fund types’ popular position baskets,” the Goldman strategists wrote in their note to prime brokerage clients, “have beaten the S&P 500 in 60% of months since 2013”.

Meanwhile, stocks that Goldman identified as both fund types’ least favourite picks lagged the S&P benchmark index in 63% of months since 2013, the investment bank said.

Both hedge funds and mutual funds have underperformed the wider market year-to-date on average, Goldman found. US equity long-short funds have returned 8% while only 31% of large-cap mutual funds have beaten their market benchmarks.

(Reporting by Naomi Rovnick and Nell Mackenzie in London; Editing by Andrew Heavens)

LONDON (Reuters) – Sluggish global growth, a higher risk of borrowers defaulting on loans and pressure on profitability mean that banks face a negative outlook in 2024, credit rating agency Moody’s said on Monday.

Prior rate hikes by central banks and rising unemployment in advanced economies will weaken asset quality, Moody’s Investors Services said in an outlook report, adding that real estate exposures in the United States and Europe posed a growing risk.

Pockets of stress in property markets in the Asia-Pacific region were also likely to continue, the report said.

Global banks have reported mixed performances this year, as their consumer revenues have benefitted from higher rates set by central banks to curb inflation, at the same time as investment banking revenues have been dented by a deep dealmaking slump.

Moody’s said in its report that it expected money to remain tight next year, lowering economic growth even as central banks are expected to start cutting rates. China’s growth is also set to slow amid muted spending by consumers and businesses, weak exports and an ongoing property crunch, the report said.

Bank profitability is likely to be squeezed by high funding costs, lower loan growth and build-ups of reserves to cover potential defaults, Moody’s said. However, capital levels – which underpin the financial soundness of banks – are expected to broadly hold up, the report said.

“Funding and liquidity will pose challenges, but capitalization will remain stable, benefiting from organic capital generation and moderate loan growth and as some of the largest US banks build up capital,” said Felipe Carvallo, senior credit officer at Moody’s Investors Service.

(Reporting by Iain Withers; Editing by Chizu Nomiyama)

By Tom Wilson and Tom Westbrook

LONDON/SINGAPORE (Reuters) – Bitcoin rose on Monday, briefly surpassing $42,000 for the first time since April 2022, in a new surge of momentum fueled by the possibility of U.S. interest rate cuts and traders betting that the U.S. will soon approve exchange-traded bitcoin funds.

The world’s biggest cryptocurrency hit as high as $42,162 on Monday, its highest since April 2022, seemingly casting off the funk that had settled over crypto markets following the collapse of FTX and other crypto-business failures last year.

At 1256 GMT, it was at $41,754, up 4.4% on the day.

Its 50% rally since mid-October has “seemed to mark a decisive shift away from the bearishness of 2022 and early 2023,” said Justin d’Anethan – head of business development for Asia-Pacific at Keyrock, a digital assets market making firm.

D’Anethen said evidence of institutional buying through November showed a new leg of interest and that although reversals ahead were not inconceivable, lows hit around $16,000 a year ago “probably marked the bottom”.

Bitcoin is up by over 150% so far this year.

Bitcoin-investor Microstrategy last week disclosed it bought an additional $593 million in bitcoin during November.

Meanwhile, riskier investments and other interest-rate sensitive assets, such as gold, have also rallied hard over the last few weeks as markets wager that the U.S. Federal Reserve has finished hiking rates and will start cutting early in 2024.

Reports in October that the U.S. Securities and Exchange Commission won’t appeal a court ruling that found the agency had been wrong to reject an exchange-traded fund application have also driven bets that an eventual approval is near.

A spot bitcoin ETF could allow previously wary investors access to crypto via the stock market, ushering a new wave of capital into the sector.

Geoff Kendrick, head of digital assets research at Standard Chartered, said bitcoin’s recent gains were “mostly due to expectations of spot ETFs coming to fruition” in the U.S., which he expects to happen in the first quarter of 2024.

Lower Treasury yields are also helping, Kendrick said, as bitcoin is “the ultimate long duration assets.”

Investors have welcomed the settlement of a years-long U.S. criminal probe into Binance, the world’s largest crypto exchange and a key cog in the worldwide crypto market. The deal, which saw Binance founder Changpeng Zhao step down after pleading guilty to breaking U.S. anti-money laundering laws, allows the company to continue operating.

Ether, the coin linked to the Ethereum blockchain network, also rose on Monday, hitting $2,274.

Both bitcoin and ether remain far below their record highs, hit in 2021, of $69,000 and $4,868 respectively.

(Reporting by Tom Wilson and Elizabeth Howcroft in London, Nilutpal Timsina in Bengaluru and Tom Westbrook in Singapore; Additional reporting by Brigid Riley in Tokyo; Editing by Chizu Nomiyama, Sonali Paul, Sam Holmes, Emelia Sithole-Matarise and Bernadette Baum)

(Reuters) -A SpaceX Falcon 9 rocket carried South Korea’s first spy satellite into orbit on Friday from California’s Vandenberg Space Force Base, after North Korea successfully launched its own military reconnaissance satellite last month.

The satellite was placed into orbit and a little over an hour after launch “successfully established communication with an overseas ground station,” South Korea’s defense ministry said.

SpaceX ended its livestream of the mission minutes after the rocket’s 10:19 a.m. PT (18:19 GMT) liftoff and then recovery of its core stage booster without showing the South Korean payload’s deployment.

In May, South Korea used its own domestically produced Nuri launch vehicle to place a mission-capable satellite into orbit for the first time, but it has contracted with the American company SpaceX to launch a total of five spy satellites by 2025 in an effort to accelerate its goal of having 24-hour watch over the Korean peninsula.

“With this successful launch of the military satellite, our military has secured independent intelligence, surveillance and reconnaissance capabilities,” South Korea’s defense ministry said in a statement, adding the South Korean military is also developing a micro satellite system project for rapid monitoring and early warning.

The ministry added that it would maximize the capabilities of its independent surveillance and reconnaissance assets to gain an overwhelming advantage in competition with North Korea.

The satellite launched on Friday is an electro-optical and infra-red device, while the four following satellites are due to feature synthetic aperture radar (SAR), which can “see” through cloud cover and at night.

South Korea has relied on its American allies for satellite intelligence, but is planning an array of reconnaissance and military communications satellites as part of a broader push into space.

After two earlier attempts ended in rocket crashes this year, North Korea used its own Chollima-1 launch vehicle to place the Malligyong-1 reconnaissance satellite in orbit.

Pyongyang has yet to release any imagery from that satellite, and analysts say its full capabilities are unknown.

North Korean state media says the craft has already photographed a range of “target regions” ranging from the White House and Pentagon to U.S. military bases in South Korea, Guam, and Hawaii, and the South Korean capital, Seoul.

(Reporting by Michael Martina, Joey Roulette and Josh Smith; Additional reporting by Heekyong Yang; Editing by Leslie Adler and Daniel Wallis)

By Nicole Jao

NEW YORK (Reuters) -Oil prices slumped more than 2% on Friday following a volatile trading week, as the market kept a wary eye on the latest round of OPEC+ production cuts and sluggish global manufacturing activity.

Brent crude futures for February settled $1.98 lower, or 2.45%, to $78.88 a barrel on their first day as the front-month contract.

U.S. West Texas Intermediate crude futures (WTI) dropped $1.89, or 2.49%, to $74.07 a barrel.

For the week, Brent posted a decline of about 2.1% and WTI recorded a drop of more than 1.9%.

OPEC+ producers agreed on Thursday to remove around 2.2 million barrels per day (bpd) of oil from the global market in the first quarter of next year, with the total including a rollover of Saudi Arabia and Russia’s 1.3 million bpd of current voluntary cuts.

Traders viewed the announcement with some skepticism, OANDA analyst Craig Erlam said.

“(It) seems traders either aren’t buying that members will be compliant or don’t view it as being sufficient,” Erlam added.

OPEC+, which pumps more than 40% of the world’s oil, is focusing on reducing output as prices have fallen from about $98 a barrel in late September amid concerns over weaker economic growth in 2024.

The cuts “will not stop a billowing cloud of confusion that is going to take the oil market weeks and months to figure out, and only if the self-reporting data is indeed reliable,” PVM analyst John Evans said.

In the United States, Federal Reserve Chair Jerome Powell said on Friday that the central bank would move “carefully” on interest rates as risks of “under- and over-tightening are becoming balanced.”

U.S. manufacturing remained subdued and factory employment fell in November, according to a survey.

Investors are keeping a watchful eye on global manufacturing activity, which remained weak during the month on poor demand, surveys showed.

On Friday, talks to extend a week-long truce between Israel and Palestinian militant group Hamas collapsed, prompting a resumption in the war in Gaza, which could lead to disruption in global oil supply.

On the supply side, the United States on Friday imposed additional sanctions related to the price cap on Russian oil, targeting three entities and three oil tankers.

U.S. oil rigs rose five to 505 this week, their highest since September, energy services firm Baker Hughes said in its closely followed report on Friday. [RIG/U]

Meanwhile, U.N. Secretary General Antonio Guterres on Friday called for a future with no fossil fuel burning at all while speaking at the two-week COP28 summit in the UAE.

Money managers cut their net long U.S. crude futures and options positions in the week to Nov. 28 by 7,663 contracts to 62,070, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.

(Reporting by Nicole Jao, Robert Harvey, Laura Sanicola and Sudarshan Varadhan;Editing by Marguerita Choy, Jane Merriman, Will Dunham, Emelia Sithole-Matarise and Daniel Wallis)

By Nicole Jao

NEW YORK (Reuters) -Oil prices slumped more than 2% on Friday following a volatile trading week, as the market kept a wary eye on the latest round of OPEC+ production cuts and sluggish global manufacturing activity.

Brent crude futures for February settled $1.98 lower, or 2.45%, to $78.88 a barrel on their first day as the front-month contract.

U.S. West Texas Intermediate crude futures (WTI) dropped $1.89, or 2.49%, to $74.07 a barrel.

For the week, Brent posted a decline of about 1.9% and WTI recorded a drop of over 1.6%.

OPEC+ producers agreed on Thursday to remove around 2.2 million barrels per day (bpd) of oil from the global market in the first quarter of next year, with the total including a rollover of Saudi Arabia and Russia’s 1.3 million bpd of current voluntary cuts.

Traders viewed the announcement with some skepticism, OANDA analyst Craig Erlam said.

“(It) seems traders either aren’t buying that members will be compliant or don’t view it as being sufficient,” Erlam added.

OPEC+, which pumps more than 40% of the world’s oil, is focusing on reducing output as prices have fallen from about $98 a barrel in late September amid concerns over weaker economic growth in 2024.

The cuts “will not stop a billowing cloud of confusion that is going to take the oil market weeks and months to figure out, and only if the self-reporting data is indeed reliable,” PVM analyst John Evans said.

In the United States, Federal Reserve Chair Jerome Powell said on Friday that the central bank would move “carefully” on interest rates as risks of “under- and over-tightening are becoming balanced.”

U.S. manufacturing remained subdued and factory employment fell in November, according to a survey.

Investors are keeping a watchful eye on global manufacturing activity, which remained weak during the month on poor demand, surveys showed.

On Friday, talks to extend a week-long truce between Israel and Palestinian militant group Hamas collapsed, prompting a resumption in the war in Gaza, which could lead to disruption in global oil supply.

On the supply side, the United States on Friday imposed additional sanctions related to the price cap on Russian oil, targeting three entities and three oil tankers.

U.S. oil rigs rose five to 505 this week, their highest since September, energy services firm Baker Hughes said in its closely followed report on Friday. [RIG/U]

Meanwhile, U.N. Secretary General Antonio Guterres on Friday called for a future with no fossil fuel burning at all while speaking at the two-week COP28 summit in the UAE.

(Reporting by Nicole Jao, Robert Harvey, Laura Sanicola and Sudarshan Varadhan;Editing by Marguerita Choy, Jane Merriman, Will Dunham, Emelia Sithole-Matarise and Daniel Wallis)

(Reuters) -ChatGPT maker OpenAI has delayed the launch of its custom GPT store until early 2024, according to an internal memo seen by Reuters on Friday.

During its first developer conference in November, OpenAI introduced the custom GPTs and store, which were set to be launched later that month.

The company is continuing to “make improvements” to GPTs based on customer feedback, the memo said.

The delay comes against the backdrop of the startup’s surprise ouster of its CEO Sam Altman and his subsequent reinstatment following threats by employees to quit.

The GPTs are early versions of AI assistants that perform real-world tasks such as booking flights on behalf of a user. It is also expected to allow users to share their GPTs and earn money based on the number of users.

(Reporting by Arsheeya Bajwa in Bengaluru; Editing by Shailesh Kuber and Arun Koyyur)

By Nicole Jao

NEW YORK (Reuters) -Oil prices slipped around 2% on Friday following a volatile week, as the market kept a wary eye on the latest round of OPEC+ production cuts.

Brent crude futures for February fell by $1.53, or 1.89%, to $79.33 a barrel by 2:01 p.m. EST (1901 GMT) on their first day as the front-month contract.

U.S. West Texas Intermediate crude futures (WTI) dropped $1.53, or 2.01%, to $74.43 a barrel.

Both benchmarks were on track to post weekly losses, with WTI set to fall about 1.2% and Brent 1.3%.

OPEC+ producers agreed on Thursday to remove around 2.2 million barrels per day (bpd) of oil from the global market in the first quarter of next year, with the total including a rollover of Saudi Arabia and Russia’s 1.3 million bpd of current voluntary cuts.

Traders viewed the announcement with some skepticism, OANDA analyst Craig Erlam said.

“(It) seems traders either aren’t buying that members will be compliant or don’t view it as being sufficient,” Erlam added.

OPEC+, which pumps more than 40% of the world’s oil, is focusing on reducing output as prices have fallen from about $98 in late September amid concerns over weaker economic growth in 2024.

The cuts “will not stop a billowing cloud of confusion that is going to take the oil market weeks and months to figure out, and only if the self-reporting data is indeed reliable,” PVM analyst John Evans said.

In the United States, Federal Reserve Chair Jerome Powell said on Friday that the central bank would move “carefully” on interest rates as risks of “under- and over-tightening are becoming balanced.”

Meanwhile, Chicago Federal Reserve Bank President Austan Goolsbee said on Friday he believes U.S. inflation is on track for the Fed’s 2% target.

U.S. manufacturing remained subdued and factory employment fell in November, according to a survey.

Investors are keeping a watchful eye on global manufacturing activity, which remained weak during the month on poor demand, surveys showed.

On Friday, talks to extend a week-long truce between Israel and Palestinian militant group Hamas collapsed, prompting a resumption in the war in Gaza, which could lead to disruption in global oil supply.

Also on the supply side, the United States on Friday imposed additional sanctions related to the price cap on Russian oil, targeting three entities and three oil tankers.

U.S. oil rigs rose five to 505 this week, their highest since September, energy services firm Baker Hughes said in its closely followed report on Friday. [RIG/U]

Elsewhere, at the two-week COP28 summit in the UAE on Friday, U.N. Secretary General Antonio Guterres called for a future with no fossil fuel burning at all.

(Reporting by Nicole Jao, Robert Harvey, Laura Sanicola and Sudarshan Varadhan;Editing by Marguerita Choy, Jane Merriman, Will Dunham and Emelia Sithole-Matarise)

By Suzanne McGee

(Reuters) – Investors have been piling into an exchange-traded fund (ETF) designed to track U.S. natural gas prices, in spite of the commodity’s dismal performance in 2023.

The U.S. Natural Gas Fund’s (UNG) price, tied to the performance of futures contracts on the commodity, has plunged 60.7% so far this year, falling 27% in November alone.

Nevertheless, the ETF has drawn inflows totaling nearly $220 million over the course of the last month, according to data from LSEG Lipper. That is the equivalent of about a quarter of the $946 million in inflows the fund saw in the first 10 months of the year.

Analysts said the drop in the ETF’s price came alongside a fall in the price of natural gas sparked by milder than usual weather across the United States in recent weeks.

Investors betting that more typical weather patterns will kick in later in the season are likely taking advantage of the ETF’s price slump, said Stacey Morris, head of energy research at VettaFi.

“I think people are just playing the prices right now” in hopes that traditional seasonal pricing patterns will kick in, she said.

Natural gas prices fell about 22% in November, the single largest monthly percentage drop since a 40% decline in January. Front-month gas futures for January delivery on the New York Mercantile Exchange were 0.5% higher, hitting $2.815 per million British thermal units (mmBtu)on the New York Mercantile Exchange as of early Friday afternoon.

The U.S. Energy Information Administration (EIA) on Thursday said utilities added a surprise 10 billion cubic feet (bcf) of gas into storage during the week ended Nov. 24, when warmer-than-usual weather kept heating demand low.

Morris noted that UNG saw big inflows in February when the commodity’s price and that of the ETF had a similar swoon.

(Reporting by Suzanne McGee; Editing by Ira Iosebashvili and Emelia Sithole-Matarise)

(Reuters) -Canadian miner First Quantum Minerals has initiated international arbitration over a contested contract related to its flagship Cobre Panama mine.

The contract, called unconstitutional by Panama’s Supreme Court, was agreed between the company and the country’s government in October, giving First Quantum a 20-year mining right with an option to extend for another 20 years in return for $375 million in annual revenue to Panama.

Cobre Panama accounts for about 1% of global copper production and contributes to about 5% of Panama’s gross domestic product.

Here’s a look at the events since December last year as the ruling puts the company on the long and unpredictable road of international arbitration:

2022

Dec. 15: Panama orders First Quantum to pause operations at Cobre Panama after missing a deadline to finalize a deal that would have increased payments to the government.

Dec. 24: First Quantum starts arbitration process against Panama.

2023

Feb 23: First Quantum suspends ore processing at the mine.

March 8: Panama and First Quantum agree on the final text for a contract to operate the mine.

March 15: First Quantum resumes operations at Cobre Panama.

Sept. 9: First Quantum reaches a deal over wages with the workers union at Cobre Panama.

Oct. 3: Panama’s government authorizes the withdrawal of the proposed contract to regulate operations of First Quantum’s local unit.

Oct 10: Panama’s cabinet approves a modified version of the government’s contract.

Oct 20: Panama’s President Laurentino Cortizo gives final approval of a law authorizing a new long-term contract for the mine.

Oct 24: Police arrest nearly 50 protesters in confrontations over the new contract.

Oct 27: Cortizo says the country will reject all new mining projects after widespread protests against the deal.

Oct 29: Cortizo says Panama will hold a referendum to decide whether to scrap the contract with the Canadian miner.

Oct 30: Panama’s electoral court says currently there are not “conditions” to hold a referendum on the disputed mining contract.

Nov 2: Panama’s lawmakers scratch provisions to cancel the contract with First Quantum from a proposed bill banning new mining concessions in the country.

Nov. 7: Two people taking part in an anti-government protest in Panama are shot dead by an assailant.

Nov. 13: First Quantum says reduced ore processing at mine as protesters block access to ports.

Nov. 16: The company and workers at the mine reach an agreement guaranteeing salaries as protests continue.

Nov. 24: Panama’s top court starts deliberations to rule on several constitutional challenges to the contract.

Nov. 27: The company says it hopes to avoid arbitration with Panama’s government by resolving disagreements during a 90-day period for talks.

Nov. 28: Panama Supreme Court rules First Quantum’s contract to operate the copper mine as “unconstitutional”. Cortizo government to proceed with the shutdown of the mine. First Quantum says it is suspending commercial production at the mine amid protests.

Nov. 29: First Quantum announces the suspension of contracts of 7,000 employees at its Panama mine due to what it described as force majeure.

Nov. 30: Panama’s trade minister Federico Alfaro resigns days after the Supreme Court ruling. First Quantum CEO Tristan Pascall arrives in Panama, in a first visit to the country since protests began.

Dec. 1: First Quantum suspends its 2023 production outlook for Panama mine and says it initiated international arbitration over the contract with Panama’s government on Nov. 29.

(Reporting by Sourasis Bose, Roshia Sabu and Seher Dareen in Bengaluru; Editing by Sriraj Kalluvila, Arun Koyyur and Devika Syamnath)