- Asia stocks muted as crude oil slumps after OPEC+ plan
US equity-index futures dropped 0.5%, extending their decline after US President Donald Trump said he had
no plans to talk to his Chinese counterpart this week. Oil slumped in early trading after OPEC+ agreed to
a further surge in output over the weekend, bolstering global supplies. Asian stocks had a muted open amid
holidays in some of the biggest markets. Crude oil fell 3.4% after the group of oil-producing nations continued
an accelerated revival of supply that’s sent prices plunging. US equity-index futures dropped 0.5%, extending
their decline after US President Donald Trump said he had no plans to talk to his Chinese counterpart this week.
There’s no cash trading in Treasuries during the Asian day as Japan is closed for a holiday, along with markets
in Hong Kong and mainland China. - Dow jumps 500 points, S&P 500 posts longest win streak in 20 years as stocks claw back tariff losses
Stocks rose on Friday as Wall Street digested a better-than-expected nonfarm payrolls report for April, which
eased recession fears and lifted the S&P 500 for its longest winning streak in just over two decades. The S&P
500 advanced 1.47% and closed at 5,686.67. This marked the broad market index’s ninth consecutive day of
gains and its longest winning run since November 2004. The Dow Jones Industrial Average jumped 564.47
points, or 1.39%, to end at 41,317.43. The Nasdaq Composite gained 1.51% and settled at 17,977.73. With
Friday’s surge, the S&P 500 has now recovered its losses since April 2, when President Donald
Trump announced his “reciprocal” tariffs. This comes a day after the tech-heavy Nasdaq accomplished the
same feat. - U.S. crude oil prices fall more than 4% after OPEC+ agrees to surge production in June
U.S. crude oil futures fell more than 4% on Sunday, after OPEC+ agreed to surge production for a second month.
U.S. crude was down $2.49, or 4.27%, to $55.80 a barrel shortly after trading opened. Global
benchmark Brent fell $2.39, or 3.9%, to $58.90 per barrel. Oil prices have fallen more than 20% this year. The
eight producers in the group, led by Saudi Arabia, agreed on Saturday to increase output by another 411,000
barrels per day in June. The decision comes a month after OPEC+ surprised the market by agreeing to surge
production in May by the same amount. The June production hike is nearly triple the 140,000 bpd that
Goldman Sachs had originally forecast. OPEC+ is bringing more than 800,000 bpd of additional supply to the
market over the course of two months. Oil prices in April posted the biggest monthly loss since 2021, as U.S.
President Donald Trump’s tariffs have raised fears of a recession that will slow demand at the same time that
OPEC+ is quickly increasing supply. Oilfield service firms such as Baker Hughes and SLB are expecting
investment in exploration and production to decline this year due to the weak price environment. “The
prospects of an oversupplied oil market, rising tariffs, uncertainty in Mexico and activity weakness in Saudi
Arabia are collectively constraining international upstream spending levels,” Baker Hughes CEO Lorenzo
Simonelli said on the company’s first-quarter earnings call on April 25. Oil majors Chevron and Exxon reported
first-quarter earnings last week that fell compared to the same period in 2024 due to lower oil prices. Goldman
is forecasting that U.S. crude and Brent prices will average $59 and $63 per barrel, respectively, this year. - Gold gains on weaker dollar; traders brace for Federal Reserve rate decision
Gold prices firmed on Monday, helped by a weaker dollar, while investors awaited more clarity on trade policy
between the U.S. and its trading partners, and looked forward to the Federal Reserve’s policy decision due
later this week. Spot gold gained 0.7% to $3,261.59 an ounce, as of 0217 GMT. U.S. gold futures rose 0.8% to
$3,269.60. The dollar was down 0.3% against its rivals, making gold more attractive for other currency holders.
“The U.S. Dollar is looking subdued ahead of the Fed meeting this week which is enabling gold to take a mild
run higher,” KCM Trade’s Chief Market Analyst Tim Waterer said. “We may see gold continue to operate in the
$3200-$3350 range ahead of the Fed meeting. However, any new headlines on the trade deal could cause
volatility to tick up once again.” The market’s focus will be on the U.S. central bank policy decision and speeches
by several Fed officials due this week, for insights into future monetary policy trajectory. Traders are now
expecting 80 basis points of rate cuts this year starting in July, following the U.S. Labor Department’s report on
Friday showing larger-than-expected job additions in April. - U.S. payroll growth totals 177,000 in April, topping expectations
Job growth was stronger than expected in April despite worries over the impact of President Donald Trump’s
blanket tariffs against U.S. trading partners. Nonfarm payrolls increased a seasonally adjusted 177,000 for the
month, slightly below the downwardly revised 185,000 in March but above the Dow Jones estimate for
133,000, the Bureau of Labor Statistics reported Friday. The unemployment rate, however, held at 4.2%, as
expected., indicating that the labor market is holding relatively stable. - China risks a spiral into deeper deflation as it diverts U.S.-bound exports to domestic market
As sky-high tariffs kill U.S. orders for Chinese goods, the country has been striving to help exporters divert sales
to the domestic market — a move that threatens to drive the world’s second-largest economy into deeper
deflation. Local Chinese governments and major businesses have voiced support to help tariff-hit exporters
redirect their products to the domestic market for sale. JD.com, Tencent and Douyin, TikTok’s sister app in
China, are among the e-commerce giants promoting sales of these goods to Chinese consumers. Sheng Qiuping,
vice commerce minister, in a statement last month described China’s vast domestic market as a crucial buffer
for exporters in weathering external shocks, urging local authorities to coordinate efforts in stabilizing exports
and boosting consumption. “The side effect is a ferocious price war among Chinese firms,” said Yingke Zhou,
senior China economist at Barclays Bank. JD.com, for instance, has pledged 200 billion yuan ($28 billion) to
help exporters and has set up a dedicated section on its platform for goods originally intended for U.S. buyers,
with discounts of up to 55%. An influx of discounted goods intended for the U.S. market would also erode
companies’ profitability, which in turn would weigh on employment, Zhou said. Uncertain job prospects and
worries over income stability have already been contributing to weak consumer demand. After hovering just
above zero in 2023 and 2024, the consumer price index slipped into negative territory, declining for two
straight months in February and March. The producer price index fell for a 29th consecutive month in March,
down 2.5% from a year earlier, to clock its steepest decline in four months. As the trade war knocks down
export orders, deflation in China’s wholesale prices will likely deepen to 2.8% in April, from 2.5% in March,
according to a team of economists at Morgan Stanley. “We believe the tariff impact will be the most acute this
quarter, as many exporters have halted their production and shipments to the U.S.” - Australia stocks fall after Prime Minister Albanese returns to power; Asian currencies rally
Australian stocks fell Monday after Prime Minister Anthony Albanese returned to power, while most Asian
markets were closed for holidays. Albanese is the country’s first prime minister to clinch a second consecutive
term in 21 years, indicating Australians’ desire for policy continuity amid an uncertain global macroeconomic
outlook. The benchmark S&P/ASX 200 lost 0.84% in its last hour of trade, reversing course from strong gains in
its last session when it hit its highest level since Feb. 27. The Australian dollar appreciated by 0.33% against the
greenback to trade at 0.6462. The offshore Chinese yuan was up marginally against the U.S. dollar at 7.2049,
after hitting its strongest level since November 2024 earlier in the session. The New Taiwanese dollar continued
to strengthen, appreciating 3.16% against the greenback to 29.738, hitting its strongest level in nearly three
years. Taiwan’s benchmark Taiex pared losses to 0.72%, in choppy trade. India’s benchmark Nifty 50 added
0.66% in early trade while the BSE Sensex rose 0.57%. Representatives for Indian billionaire Gautam Adani and
his companies reportedly met with officials from U.S. President Donald Trump’s administration to discuss the
dismissal of the criminal charges levied against him in an overseas bribery probe, Bloomberg reported. The
talks which began earlier this year have picked up speed in recent weeks and could lead to a resolution in the
coming month or so if the pace continues, the report added. It also highlighted that Adani’s representatives
are trying to make the case that his prosecution doesn’t align with Trump’s priorities and should be
reconsidered. Shares of flagship Adani Enterprises surged by 4.66%, while Adani Port rose 4.22%. Adani
Power gained 4.05%. Adani Green shares advanced 3.45% while Adani Energy added 3.38%. - Trump announces 100% tariff for movies produced outside U.S.
U.S. President Donald Trump announced Sunday a 100% tariff on movies produced outside of the United
States, saying the U.S. movie industry was dying a “very fast death” due to the incentives that other countries
were offering to draw American filmmakers. “This is a concerted effort by other Nations and, therefore, a
National Security threat. It is, in addition to everything else, messaging and propaganda,” Trump said in a post
on Truth Social. Trump said he was authorizing the relevant U.S. government agencies such as the Department
of Commerce to immediately begin the process of imposing a 100% tariff on all films produced abroad that are
then sent into the United States. Trump added: “WE WANT MOVIES MADE IN AMERICA, AGAIN!” Commerce
Secretary Howard Lutnick posting on X said: “We’re on it.” Neither Lutnick nor Trump provided any details on
the implementation. It was not immediately clear whether the move would target production companies,
foreign or American, producing films overseas. Film and television production in Los Angeles has fallen by
nearly 40% over the last decade, according to FilmLA, a non-profit that tracks the region’s production.
Meanwhile, governments around the world have offered more generous tax credits and cash rebates to lure
productions, and capture a greater share of the $248 billion that Ampere Analysis predicts will be spent globally
in 2025 to produce content. The post by Trump comes after he has triggered a trade war with China, and
imposed global tariffs which have roiled markets and led to fears of a U.S. recession. Former senior Commerce
official William Reinsch, a senior fellow with the Center for Strategic and International Studies, said retaliation
against Trump’s foreign movies tariffs would be devastating. “The retaliation will kill our industry. We have a
lot more to lose than to gain,” he said, adding that it would be difficult to make a national security or national
emergency case for movies. - Berkshire meeting updates: Buffett proposes Abel become CEO, talks trade policy, market volatility
Berkshire Hathaway’s annual meeting ended Saturday with big news: Warren Buffett said he planned to ask
the board to make Greg Abel the company’s CEO by year-end. Abel, Berkshire’s vice chairman of non-insurance
operations, was at Buffett’s side on stage when Buffett broke the news, and didn’t know these remarks were
coming, according to “The Oracle of Omaha.” The 94-year-old has had a six-decade run at the company, and
its annual meetings draw thousands of shareholders from around the world to Omaha each year. The
gathering, known as “Woodstock for Capitalists,” is a chance for Buffett to share his views on the markets,
investing and life, in general. This year, Buffett was asked about global trade policy and the tariffs that President
Donald Trump has proposed as well as the market’s recent volatility. “Trade should not be a weapon,” Buffett
said. Read a full account of the day’s events below. - Exxon Mobil Corp. Chief Executive Darren Woods said the oil company currently doesn’t see a material
impact from tariffs on its project-development efforts, as it narrowly topped analyst estimates for first
quarter profit and grew its production
Exxon Mobil (XOM) has launched a “full-court effort” to manage the impact of tariffs, which have contributed
to economic uncertainty, caused “significant volatility” and raised the prospects of slower growth, Woods said
on the company’s quarterly conference call with analysts. “We’re seeing significant downward pressure on
prices and margins in this environment, [and] it’s more important than ever to focus on what we can control,”
Woods said. So far, Exxon has seen nothing that would lead it to change its project portfolio or the expected
returns associated with them, Woods said. After announcing a series of tariffs in April, President Donald Trump
suspended many of those levies for 90 days to allow more time for trade negotiations. The Trump
administration, as well as other governments around the globe, are aware of the role that oil and gas play in
economic growth and have a mutual interest in resolving tariff issues, Woods said. “It’s still early days, but I
have a lot of confidence that the organization has got a lot of levers to pull,” Woods said. “I would also tell you
that I think there is a sensitivity by the Trump administration and other governments around the world to not
severely impact the energy sector and the products that we produce.” In its first-quarter results, Exxon
reported that production increased 20% to 4.55 million oil-equivalent barrels a day, with a boost of 767,000
barrels attributed largely to the company’s $60 billion acquisition of Pioneer Natural Resources, which closed
in May 2024. Exxon’s total production fell short of the analyst estimate of 4.63 million oil-equivalent barrels a
day, according to FactSet data. Exxon’s first-quarter profit fell to $7.7 billion, or $1.76 a share, from $8.22
billion, or $2.06 a share, in the year-ago quarter. Exxon beat the FactSet consensus estimate of $1.75 a share
for its first-quarter profit. Shares of the Irving, Texas-based company fell 0.7%, while the broad market rallied
on the heels of a healthy jobs report for April. The Dow Jones Industrial Average DJIA rose more than 400
points. Exxon’s first-quarter revenue rose slightly to $83.13 billion, up from $83.08 billion but below the analyst
estimate of $86.35 billion. Exxon booked volume growth in the Permian and Guyana basins and benefited from
cost-saving efforts. However, it also faced a “significant decline in industry refining margins, weaker crude
prices, lower base volumes from strategic divestments and higher expenses from growth initiatives,” the
company said. During the quarter, natural-gas prices improved, with “strong” global demand, Exxon said. The
company reiterated plans to spend $27 billion to $29 billion on capital projects this year. - Chevron Corp. will reduce share buybacks this quarter after oil prices tumbled, indicating that
President Donald Trump’s trade war is hurting a key US industry he pledged to help
The Houston-based company said Friday it will repurchase about $2.75 billion of stock in the second quarter,
about 30% less than it bought in the first three months of the year. It comes despite Chevron beating earnings
estimates on more low-cost production from Kazakhstan and the Permian Basin. Exxon Mobil Corp., which
also reported earnings Friday, is sticking to its plan to buy back about $5 billion in shares per quarter. And Shell
Plc said it has the financial wherewithal to keep repurchasing upwards of $3 billion of shares each quarter even
if crude plunges as low as $50 a barrel. Big Oil is finding it increasingly difficult to maintain share buybacks as
Brent crude slumped 17% this year to about $62 a barrel at the close Thursday. Trump’s tariffs are poised to
slow demand growth for crude and increase the cost of steel and other materials needed to produce oil and
gas. At the same time, OPEC and its allies surprised markets last month with a plan to increase oil supplies
more than expected later this year. “Oil prices have changed,” Chief Financial Officer Eimear Bonner said in an
interview. “The market, from a supply and demand perspective, appears to be softening.” The downturn in oil
prices is starting to show the relative strength and weakness between the world’s supermajors. BP plc and
Chevron cut their buybacks while Exxon, Shell and TotalEnergies SE maintained their payouts. Still, with debt
levels rising across the group, it remains to be seen which is the right approach — especially if crude prices
continue to decline. Chevron’s adjusted first-quarter earnings of $2.18 a share beat the expectations of
analysts. Shell beat earnings estimates, while Exxon matched them. Chevron’s second-quarter buyback of
between $2.5 billion and $3 billion, if maintained for the rest of the year, still fits within its annual guidance of
$10 billion to $20 billion, but would be a reduction from last year’s payout. The company spent an additional
sum buying 5% of Hess Corp. shares in the first quarter, a stake worth around $2.3 billion at the time, ahead of
the anticipated merger later this year. - Shell reported adjusted profit for the first quarter that beat the average analyst estimate and
announces a buyback of $3.5 billion
FIRST QUARTER RESULTS: Adjusted profit $5.58 billion, -28% y/y, estimate $5.07 billion (Bloomberg
Consensus); Adjusted integrated gas profit $2.48 billion, -33% y/y, estimate $2.56 billion; Adjusted upstream
profit $2.34 billion, +21% y/y, estimate $2.07 billion; Adjusted marketing profit $900 million, +15% y/y,
estimate $841.9 million; Adj. chemicals & products profit $449 million, -72% y/y, estimate $306.9 million; Adj.
renewables & energy solutions loss $42 million vs. profit $163 million y/y, estimate loss $49.9 million; Adj.
corporate loss $457 million, +24% y/y, estimate loss $528.5 million; Adjusted EPS 92c vs. $1.20 y/y, estimate
81c; Adjusted Ebitda $15.25 billion, -18% y/y, estimate $15.08 billion; Revenue $69.23 billion, -4.5% y/y,
estimate $73.94 billion; Oil & gas output 2.84 million boe/d, -2.5% y/y, estimate 2.77 million; Chemical sales
volumes 2.81 million tons, -2.4% y/y, estimate 3.53 million; Dividend per share 35.80c vs. 35.80c q/q, estimate
36.00c; Cash flow from operations $9.28 billion, -30% y/y, estimate $10.54 billion; Net debt $41.52 billion, +7%
q/q, estimate $38.97 billion; Debt gearing 18.7% vs. 17.7% q/q, estimate 18.6%. YEAR FORECAST: Sees capital
expenditure $20 billion to $22 billion. COMMENTARY AND CONTEXT: Upstream production is expected to be
approximately 1,560 – 1,760 thousand boe/d. Production outlook reflects the SPDC divestment in March 2025
and the scheduled maintenance across the portfolio. Corporate Adjusted Earnings are expected to be a net
expense of approximately $400 – $600 million in the second quarter 2025. - Rheinmetall price target raised to EUR 1,880 from EUR 1,700 at Jefferies
Jefferies raised the firm’s price target on Rheinmetall to EUR 1,880 from EUR 1,700 and keeps a Buy rating on
the shares. After a strong defense rally, and a significant de-rating of civil aerospace names amid tariff concerns,
the firm is switching its preference back towards civil, the analyst tells investors in a note on the EU aerospace
and defense electronics group. The bulk of the firm’s estimates changes are driven by updated foreign
exchange assumptions, though for defense names the firm also rolled forward valuations to 2028 in order to
capture more of the segment mid-term growth potential, the analyst noted.
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