ReportWire

Tag: Fossil Fuels

  • Exxon near $60 billion deal to buy shale driller Pioneer Natural Resources: report

    Exxon near $60 billion deal to buy shale driller Pioneer Natural Resources: report

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    Exxon Mobil Corp. is close to a deal to buy shale-drilling company Pioneer Natural Resources for about $60 billion, the Wall Street Journal reported late Thursday.

    Citing sources familiar with the matter, the Journal said the deal could be finalized in the coming days. The Journal had reported in April that the two companies had held preliminary talks.

    The acquisition would be one of the largest in the U.S. this year, and Exxon’s biggest since it bought Mobil in 1999. The Journal noted that Exxon has been flush with cash since posting record profits last year, and is looking to become the dominant player in the oil-rich Permian Basin in western Texas and New Mexico.

    Exxon has a market cap of about $446 billion, as of Thursday, while Pioneer is valued at about $50 billion.

    Exxon shares
    XOM,
    -2.25%

    have fallen about 1% year to date, while Pioneer
    PXD,
    -0.17%

    stock is down about 6% in 2023, The S&P 500
    SPX,
    in comparison, is up about 11% year to date.

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  • Exxon expects profit bump from oil prices of around $1 billion in third quarter

    Exxon expects profit bump from oil prices of around $1 billion in third quarter

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    Exxon Mobil Corp. said in a filing late Wednesday that its third-quarter profit is likely to get a bump of around $1 billion from rising crude prices.

    Exxon
    XOM,
    -3.74%

    estimated between $900 million and $1.3 billion more than second-quarter profit due to crude-price changes, and between $200 million and $400 million in gas-price changes.

    The energy giant is expecting $600 million to $400 million less as a result of thinner margins for its chemicals, however.

    Exxon shares dropped 0.5% in the extended session after ending the regular trading day down 3.7%. The stock late last month ended at a record, according to data going back to November 1972.

    Oil futures prices on Wednesday ended at their lowest in about five weeks, but had been inching closer to $100 a barrel recently.

    Exxon is slated to report third-quarter earnings in early November, with FactSet consensus calling for adjusted earnings of $2.35 a share on sales of $85.6 billion. That would compare with adjusted EPS of $4.45 on sales of $112 billion in the third quarter of 2022.

    So far this year, Exxon shares have gained nearly 2%, compared to an advance of around 10% for the S&P 500 index
    SPX.

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  • Why higher oil prices aren’t likely to make it into Fed’s inflation or rate outlook

    Why higher oil prices aren’t likely to make it into Fed’s inflation or rate outlook

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    With the Federal Reserve preparing to release updated inflation and interest-rate forecasts on Wednesday, the proverbial elephant in the room will probably be missing from the equation: The full impact of rising oil prices, according to investors, traders and strategists.

    Oil prices touched fresh 2023 highs on Tuesday and settled above $90 a barrel, a byproduct of this month’s decision by Russia and Saudi Arabia to extend production cuts into year-end. Just a day ago, Mike Wirth, chief executive of Chevron
    CVX,
    -0.01%
    ,
    put the prospect of oil crossing $100 a barrel on the map and the price at the gas pump went above $6 a gallon in Southern California — reigniting fears about a revival of inflation.

    It’s too soon to say whether the run-up in energy prices will spill over into the narrower core inflation gauges that the Fed cares most about, TD Securities strategist Gennadiy Goldberg said via phone. As a result, policy makers may look past the impact of higher energy prices on their longer-term inflation and rate outlook Wednesday, he said. Fed officials are hesitant to place too much weight on energy or food as components of inflation, anyway, because of their volatile natures.

    In One Chart: Why crude-oil rally can’t be ignored by investors — or the Fed

    However, some traders are worried that such an omission could be a mistake considering all the other price pressures playing out, such as strikes against the three major U.S. automakers.

    UAW strike: Union sets Friday deadline for further possible strikes

    “Is it a mistake to not factor in oil? I personally think it is, but I’m probably in the minority on that,” said Gang Hu, an inflation trader at New York-based hedge fund WinShore Capital. “The combination of oil and strikes by the United Auto Workers presents a structurally unstable inflation picture.”

    “If the Fed is the one that provides insurance against inflation and is not doing anything, the market will seek inflation protection by itself and it will look like inflation expectations are unanchored. This is the risk,” Hu said via phone.

    Nervousness around the prospect of a higher-for-longer message on rates from the Fed helped send the 2-
    BX:TMUBMUSD02Y
    and 10-year Treasury rates
    BX:TMUBMUSD10Y
    to their highest levels in more than a decade on Tuesday. The ICE U.S. Dollar Index was off by less than 0.1%.

    Read: How Fed’s higher-for-longer theme may play out in Treasurys and the dollar on Wednesday

    U.S. stock indexes
    DXY

    SPX

    COMP
    finished lower on Tuesday, led by a 0.3% drop in Dow industrials.

    Investors and traders are expected to zero in on the part of the Fed’s Summary of Economic Projections that reflects where the fed-funds rate target, currently between 5.25%-5.5%, could go in 2024. As of June, policy makers penciled in the likelihood of four 25-basis-point rate cuts next year after factoring in more tightening this year, and they saw inflation creeping down toward 2% in 2024 and 2025, as well as over the longer run.

    See: Why Fed’s response to this key question could spark 5% stock-market pullback or ‘solid rally’

    Many in financial markets are clinging to the likelihood of no Fed rate hike on Wednesday, and see some possibility of just one more increase in November or December before rate cuts begin in the middle or final half of next year. But inflation traders now foresee seven straight months of 3%-plus readings on the annual headline CPI rate, from September through next March; that’s up from five consecutive months seen as of last Wednesday and complicates the question of where the Fed will go from here.

    “The Fed’s rate decision on Wednesday was already decided a while ago, when officials started to communicate that a pause would be the likely outcome,” said Mark Heppenstall, chief investment officer of Penn Mutual Asset Management in Horsham, Pa., which oversaw $32 billion as of August.

    “On the margin, we might see higher oil prices make a modest impact on rate projections,” he said via phone. However, “it’s too early for the story to change on disinflation and all the progress made so far.”

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  • NIO, Moderna, Block, U.S. Steel, and More Stock Market Movers

    NIO, Moderna, Block, U.S. Steel, and More Stock Market Movers

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  • Why crude-oil rally can’t be ignored by investors — or the Fed

    Why crude-oil rally can’t be ignored by investors — or the Fed

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    Central bankers like to focus on core inflation readings, which strip out food and energy prices, but that doesn’t mean that they, or investors, will be able to ignore a renewed surge in crude-oil prices.

    In a Thursday note, DataTrek Research observed that the correlation between energy prices and the core reading of the consumer-price index has returned to levels seen in the 1970s and 1980s. It stands at 0.62 since 2020, compared with an average of 0.68 in those prior decades, and well above its long-run average of 0.31. A reading of 1.0 would mean the measures were moving in perfect lockstep. (See table below.)


    DataTrek Research

    Core measures of inflation typically strip out volatile items like food and energy. While that often leads to eye-rolling by commentators who note that food and energy make up a big chunk of what consumers spend money on, the logic behind the move holds that such items are less responsive to monetary policy.

    Policy makers put more emphasis on the core reading for a better read on what they can influence. The core personal-consumption expenditures, or PCE, index, for example, is often described as the Federal Reserve’s favored inflation indicator.

    But that doesn’t mean rising energy or food prices can be ignored. Energy, after all, is an input, and can have an influence on overall prices.

    “Recent data says energy prices hold more sway on core inflation than any time since the 1970s/1980s, so rising oil prices are a legitimate concern for both the Fed and capital markets. Food inflation fits the same bill,” said DataTrek co-founder Nicholas Colas in the note.

    Oil prices have been on a tear this summer, with the rally accelerating after Saudi Arabia announced earlier this week it would extend a production cut of 1 million barrels a day through the end of the year, with Russia also pledging to extend a supply cut.

    West Texas Intermediate crude
    CL00,
    +0.48%
    ,
    the U.S. benchmark, extended a winning streak to nine days on Wednesday, while Brent crude
    BRN00,
    +0.60%
    ,
    the global benchmark, rose for a seventh straight day. Both grades ended at 2023 highs Wednesday before pulling back modestly in the Thursday session.

    The surge in crude threatens to further drive up fuel prices, including gasoline and diesel.

    And rising oil prices this week got a chunk of the blame from investors and analysts for a pickup in Treasury yields as market participants began to pencil in a longer stretch of higher interest rates — or weighed the possibility the Fed may need to deliver more monetary tightening. That’s also contributed to a rise in the U.S. dollar, with the ICE U.S. Dollar Index
    DXY,
    a measure of the currency against a basket of six major rivals, hitting a six-month high.

    U.S. stocks have weakened in the face of rising yields, with technology and growth shares, which are particularly rate-sensitive, leading the way lower. The Nasdaq Composite
    COMP
    was on track for a 2% decline so far this holiday-shortened week, while the S&P 500
    SPX
    has pulled back 1.4% and the Dow Jones Industrial Average
    DJIA
    has lost 1%.

    “With oil prices rising again, we got to wondering about the spillover effects of this move on inflation. Will pricier crude derail recent disinflationary trends?” Colas wrote.

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  • U.S. oil prices score longest streak of daily gains in over 4 years

    U.S. oil prices score longest streak of daily gains in over 4 years

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    Oil futures settled higher on Wednesday, with U.S. prices posting a ninth consecutive climb — the longest streak of daily gains since early 2019.

    Prices for U.S. and global benchmark crude futures marked fresh settlement highs for the year so far, following the recent extension of supply cuts by Saudi Arabia and Russia.

    Price action

    Market drivers

    “Saudi…

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  • Dominion Sells Natural Gas Utilities to Enbridge for $9.4 Billion

    Dominion Sells Natural Gas Utilities to Enbridge for $9.4 Billion

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    Dominion Sells Natural Gas Utilities to Enbridge for $9.4 Billion

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  • IEA Raises Oil Supply Forecasts as U.S. Producers Counter OPEC+ Cuts

    IEA Raises Oil Supply Forecasts as U.S. Producers Counter OPEC+ Cuts

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    By Will Horner

    The International Energy Agency raised its forecast for global oil supplies next year while moderating its demand expectations, pointing to a more balanced oil market that could cap oil prices.

    In its monthly market report, the IEA said it expects oil supplies to rise by 1.5 million barrels a day next year, 300,000 barrels a day more than it was expecting last month.

    That is as production increases in the U.S., Brazil and Guyana serve to counter production cuts by Russia and Saudi Arabia, undermining those nation’s efforts to support oil prices and boost their oil revenues.

    At the same time, the Paris-based intergovernmental organization said it expects oil demand to rise by 1 million barrels a day next year, roughly half the demand growth seen in 2023 and 100,000 barrels a day less than last month’s forecast.

    The changes mean that the IEA expects oil demand to exceed supply by a more modest 200,000 barrels a day next year, compared with a 700,000 barrel-a-day deficit in 2023. That could provide relief for economies still struggling with the lingering effects of inflation and prevent a repeat of the sharply higher oil prices that followed the outbreak of war in Ukraine.

    Oil producers not part of OPEC+, the alliance between the Organization of the Petroleum Exporting Countries and a group of Russia-led oil producers, are set to dominate the increase in oil output, challenging the cartel’s control over the oil market and diminishing the ability of major producers such as Saudi Arabia to dictate global oil balances.

    “Non-OPEC+ oil supply, now at its highest level ever, nearly matches the OPEC+ alliance barrel-for-barrel and looks set to do so through next year,” the IEA said. “That’s a dramatic change from 2017, when OPEC+ was first established.”

    Non-OPEC+ oil producers will pump just under half of all barrels next year, the IEA expects. In 2017, they accounted for just 43% of all oil produced.

    The IEA’s forecasts are based on the current agreement of members of the Organization of the Petroleum Exporting Countries and its allies, known collectively as OPEC+, which could easily change in the coming months, the IEA acknowledged.

    OPEC+’s largest members and dominant decision makers, Saudi Arabia and Russia, have in recent months sharply slashed their output in an attempt to boost oil prices, cuts which have been periodically extended.

    Either nation could at any moment choose to reverse the cuts, though doing so would likely weigh on oil prices and with it their oil income. An oil price war between Moscow and Riyadh in 2020 threatened the end of the OPEC+ alliance and, in an unprecedented event, briefly sent oil prices into negative territory as the two countries raced to increase their output and capture a larger share of the market.

    Write to Will Horner at william.horner@wsj.com

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  • Ford is going all in on hybrids. Here’s why.

    Ford is going all in on hybrids. Here’s why.

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    Ford Motor Co. is betting that hybrid vehicles will be the bridge toward an all-electric-vehicle future for perhaps longer than most people expect. It’s a cautious strategy that has its admirers on Wall Street.

    Ford
    F,
    -4.48%

    is not thinking about “extremes” between hybrids and EVs, company Chief Executive Jim Farley said recently. The automaker decided to keep investing in heavy-duty hybrid vehicles and has been surprised by their popularity, he said.

    That’s a “subtle shift of strategy” for Ford, but one that makes sense in the current reality, said Garrett Nelson, an analyst with CFRA.

    On the call with analysts following Ford’s quarterly results last month, Farley noted that Ford’s hybrid offerings are extremely popular. About 10% of F-150 pickup trucks and 56% of smaller Maverick pickup trucks being sold in the U.S. are hybrids, he said.

    “We are adding hybrid options across our [internal-combustion-engine] lineup,” he said. “And we expect to quadruple our hybrid sales in the next five years, and we were already No. 2 in the market last year.”

    The pure-battery EV market has become saturated, and Ford is indicating that it is willing to be flexible, CFRA’s Nelson said.

    “Bottom line, aside from Tesla
    TSLA,
    +1.30%

    EVs, the vast majority of other EV models have sold very poorly,” Nelson said, adding that although many people are not interested in EVs, hybrids could be an easier sell.

    Related: Electric vehicles vs. gas-powered cars: Which one is cheaper to buy and own?

    “Consumers are becoming much more educated,” he said. “You can in a lot of cases go on pure battery power and not even use any fuel with these hybrids.”

    Japanese carmakers such Toyota Motor Corp.
    7203,
    +1.40%

    TM,
    +0.26%

    and Honda Motor Co.
    7267,
    +5.87%

    HMC,
    -0.09%

    have taken that approach from the start, making much bigger bets on hybrids, and “in hindsight that appears to have paid off,” Nelson said.

    Indeed, “hybrids are a much easier purchase in today’s environment,” said Karl Brauer, an analyst with iSeeCars.com.

    “They cost less than electric vehicles, they don’t involve range anxiety, and Ford has managed to make them quite practical in how it pairs the technology with the F-150,” Brauer said.

    Hybrids are more expensive to buy than internal-combustion-engine vehicles, but they are cheaper than electric vehicles because their batteries are significantly smaller — even those in plug-in hybrids, which are capable of driving several dozen miles solely on an electric charge. About a third of the cost of an EV is the cost of the battery.

    Hybrids have one more critical advantage over EVs, Brauer said — they can be produced and sold for a profit.

    Ford’s strategy contrasts with a more aggressive EV push by General Motors Co.
    GM,
    -5.79%
    ,
    Nelson said.

    GM late Wednesday unveiled its Cadillac Escalade IQ, a luxury EV that starts at around $130,000 and has 450 miles of range. GM expects to begin making the vehicle in the summer of 2024, with sales beginning in late 2024.

    GM’s future lineup includes a number new EV models as well as electric versions of popular vehicles that were previously available only as gas-powered models. That includes an electric Chevy Equinox for next year and a return of the Chevy Bolt, among the cheapest EVs available in the U.S.

    See also: GM is bringing back the Bolt. What do we know so far about the updated EV?

    GM will cease production of the Bolt later this year but has promised to bring it back using the company’s new shared EV platform. Observers expect the new Bolt to be available around 2025.

    GM’s EV strategy is generally viewed as more risky.

    Tesla started a price war earlier this year, cutting prices of its EVs several times. Ford also cut prices, most notably on the F-150 Lightning, the electric version of a pickup truck that’s been the best-selling vehicle in the U.S. since the 1980s.

    Hybrids also do away with so-called charge anxiety, because their gas-powered engines kick in when needed.

    Related: EVs zoomed ahead with a 8.2% slice of auto financing pie in second quarter

    According to a Consumer Reports survey in June, about 6 in 10 respondents said that concerns about charging were holding them back from purchasing an EV, and about 5 in 10 cited range as a reason they wouldn’t buy one just yet.

    Tesla has made its fast-charging ports the de facto standard in the U.S., and several automakers, including Ford and GM, have inked deals to allow their EV owners to power up at Tesla’s Supercharger network, which has charging stations located near major highways.

    An often-cited 2022 study about the reliability of public, open-to-all fast-charging stations in nine counties in the San Francisco Bay Area found a range of issues with the stations, from charging and payment failures to annoyances such as spaces being occupied by gas-powered vehicles or EVs that are not actively charging.

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  • Brazil’s Lula pushes end to deforestation, stumbles on fossil fuels

    Brazil’s Lula pushes end to deforestation, stumbles on fossil fuels

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    Under pressure from the EU to rein in deforestation or face trade restrictions, Amazon countries must figure out how to bring prosperity to the region without destroying the forest. And that’s proving difficult.

    At a two-day summit starting Tuesday, Brazilian President Luiz Inácio Lula da Silva is looking to corral countries to speed up efforts to stop deforestation and decide on a common strategy to save the rainforest.

    But it’s likely to be an uphill climb, with countries disagreeing on whether they should commit to a zero deforestation goal and on whether oil and gas drilling should be banned in the region.

    The summit comes as the EU is rolling out new rules to ban commodities’ imports driving deforestation abroad and is asking countries to police their supply chains against environmental and human rights violations.

    That’s increasing pressure on the Amazon region — and particularly on Brazil, one of the largest exporters of agri-food products to the EU and home to 60 percent of the rainforest — to commit to ambitious action at this week’s meet-up.

    Colombian President Gustavo Petro has argued that phasing out fossil fuels is essential for the forest’s protection. “Even if we get deforestation under control, the Amazon faces dire threats if global heating continues to climb,” he wrote in an op-ed last month, adding that “to avoid the point of no return, we need an ambitious transnational policy to phase out fossil fuels.”

    But Lula isn’t pushing to phase out fossil fuels domestically, highlighting a tension between conservation efforts and ensuring economies stay on track.

    The Brazilian leader told local media ahead of the summit he wants to “keep dreaming” about drilling in the region. His comments come as Brazilian oil major Petrobras is looking to open new fields near the mouth of the Amazon River despite receiving a negative opinion from the national institute for the environment.

    If fossil fuels are kept underground, Amazon countries will need alternative activities to keep their economies afloat. Observers have suggested using this week’s summit as a way to promote greener farming and sustainable forest management, as well as discuss potential schemes to pay farmers and indigenous people to help protect the forest.

    “The bioeconomy is the key to unlocking the region’s economic potential while preserving its ecological heritage and, as such, needs to be at the center of any sustainable and inclusive development plan for the Amazon,” said Vanessa Pérez, global economics director at the World Resources Institute.

    Indigenous groups are also watching the summit closely, and want their contribution to climate protection, as well as their rights and territorial claims recognized by country leaders.

    “It is not possible to plan the future of the Amazon without indigenous peoples, without guaranteeing our territorial rights,” said Ângela Kaxuyana, political adviser at the Coordination of Indigenous Organizations of the Brazilian Amazon.

    High stakes

    The outcome of the summit is a major political and diplomatic test for Lula, who has pledged to achieve zero deforestation in the Amazon.

    Colombian President Gustavo Petro has argued that phasing out fossil fuels is essential for the forest’s protection | Guillermo Legaria/Getty Images

    Since taking office last year, Lula has stepped up efforts to crack down on illegal miners, protect indigenous groups and boost conservation efforts in the Amazon, with the government reporting a 66 percent drop in the rate of deforestation in July compared to the same month last year.

    But not all Amazon countries are ready to commit to a similarly ambitious goal; Bolivia and Venezuela failed to sign a pledge made at the COP26 climate talks to end global deforestation by 2030.

    Scientists have warned that the continued deterioration of the Amazon, a major carbon sink, is likely to have a profound impact on global climate efforts.

    “If [Lula] doesn’t come out of this summit with agreement from other countries that they also see this goal as important, it really undermines Brazil’s efforts to reach this [zero deforestation] goal,” said Diego Casaes, campaign director at the NGO Avaaz.

    The regional meet-up is also a key opportunity for Lula to assert his credibility as a climate leader both domestically and internationally as Brazil prepares to host the COP30 summit in 2025, Casaes added.

    The outcome is “a test of how far Lula can go given the constraint that he has from the congress,” he said, given the Brazilian legislative body has pushed back against measures to boost policing and protection of the rainforest.

    Scientists have warned that the continued deterioration of the Amazon, a major carbon sink, is likely to have a profound impact on global climate efforts | Victor Moriyama/Getty Images

    European lawmakers will be looking for signals for how the region is preparing to adapt to new rules to police imports driving deforestation, tackle human rights abuses and green trade.

    Under the EU Deforestation Regulation, imports of commodities like soy and beef produced on deforested land will be forbidden from 2024, while under the new corporate sustainability due diligence rules companies will be forced to scrutinize their supply chains for environmental damage and human rights abuses.

    And although the trade deal between the EU and the Mercosur countries isn’t officially on the agenda, it will certainly come up.

    That’s because the EU is currently negotiating a sustainability addendum to the trade deal with his Latin American counterparts, which should give reassurances — notably to France — the agreement will not have negative consequences on the environment and worsen deforestation.

    The summit is an opportunity to see whether Amazon countries “are able to coordinate efforts” and to ensure policies related to the forest “are aligned with [global] climate goals,” said Caseas.

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    Louise Guillot

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  • FDA approves first-ever pill for postpartum depression in new mothers

    FDA approves first-ever pill for postpartum depression in new mothers

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    The Food and Drug Administration late Friday approved the first-ever pill that can be taken at home for postpartum depression.

    The medication, called zuranolone, and jointly developed by pharmaceutical companies Biogen Inc.
    BIIB,
    +0.44%

    and Sage Therapeutics
    SAGE,
    +0.25%
    ,
    is taken daily for two weeks, the FDA said in its release.

    In a pair of clinical trials involving women who experienced severe depression after having a baby, the drug improved symptoms including anxiety, trouble sleeping, loss of pleasure, low energy, guilt or social withdrawal as soon as three days after the first pill.

    “Postpartum depression is a serious and potentially life-threatening condition in which women experience sadness, guilt, worthlessness — even, in severe cases, thoughts of harming themselves or their child,” said Tiffany Farchione, M.D., director of the Division of Psychiatry in the FDA’s Center for Drug Evaluation and Research.

    ”And, because postpartum depression can disrupt the maternal-infant bond, it can also have consequences for the child’s physical and emotional development,” she said.

    Women who are breastfeeding or had mild or moderate depression weren’t included in the trials.

    Until now, the only available option for this condition has been an intravenous injection that the FDA approved in 2019. It requires patients to stay in a hospital for two-and-a-half days.

    Postpartum depression affects one in eight new mothers in the U.S., according to the Centers for Disease Control and Prevention. Researchers suggest the actual rate may be higher and that half of such cases go undiagnosed. 

    Research finds that postpartum depression is more intense and lasts longer than the typical worries, sadness or tiredness that many women experience after giving birth. The condition can make it harder for mothers to bond with their babies and may increase the likelihood of developmental delays in infants.

    Drug overdoses and suicides are leading causes of maternal death in the U.S., contributing to nearly one in four pregnancy-related deaths, according to the CDC. 

    Zuranolone stimulates a brain receptor called GABA that slows down the brain and helps control anxiety and stress. The drug, through trials, is thought to calm women suffering from postpartum depression enough to allow them to rest, which also improves symptoms.

    Shares of Biogen are up 23% over the past year, and Sage has lost 14%, while the S&P 500
    SPX
    is up 8% over the same time.

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  • Icahn Enterprises’ bonds see buying after bond-friendly halving of distribution

    Icahn Enterprises’ bonds see buying after bond-friendly halving of distribution

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    Icahn Enterprises Inc.’s bonds saw better buying on Friday, after Carl Icahn’s investing arm announced it was halving its quarterly distribution, a move that disappointed unit holders but is positive for its bonds.

    Bondholders are typically focused on making sure a company can make its interest payments and repay the principal when a bond matures.

    The company said it would now make a distribution of $1, down from $2 previously. The news came as the company posted a surprise loss for the second quarter and a $1 billion decline in revenue.

    Icahn placed the blame for the fund’s poor performance on Hindenburg Research, the short seller that published a report about IEP on May 2, accusing it of overstating asset values. Hindenburg also revealed that Icahn himself had borrowed from the company, among other issues.

    For more, see: Icahn Enterprises’ stock slides 30% after company halves quarterly distribution to $1 per unit

    The stock promptly tumbled and was last down 24%, putting it on track for its biggest one-day selloff since it went public 36 years ago. The next biggest drop was 20.0% on May 2, when the Hindenburg Research report was released.

    As the chart below from data-as-a-service provider BondCliQ Media Services shows buyers emerging after 8:00 a.m. Eastern, immediately after the news was announced. By midmorning, some sellers had emerged.


    Icahn Enterprises net customer flow (intraday). Source: BondCliQ Media Services

    The following table shows there was net buying over the last 10 days, focused on the 6.35% notes that mature in 2026.


    Most active Icahn Enterprises issues with net customer flow (last 10 days). Source: BondCliQ Media Services

    In a letter to unit holders accompanying the results, Icahn acknowledged missteps in the past several years as the company has shifted away from its core activist strategy and shorted far more than was necessary.

    “While we made money on the long side through our activism efforts, our returns have been overwhelmed by our overly bearish view of the market and related oversized short (hedge) positions,” Icahn wrote. “Over the past six months, we have significantly reduced our hedges. Going forward, we intend to stick to our knitting and focus on our activist strategy while remaining appropriately hedged.”

    For more, see: Carl Icahn admits he was wrong to take a huge short position on the market that lost $9 billion

    Activism is the best investment paradigm because “there is no accountability in Corporate America,” he wrote.

    With many exceptions, “most CEOs are incapable of creating great businesses (or even improving them) and the desire to empire build is rampant. “

    Many are not the best person for the job or even the most talented individual in the organization, he continued. Far too often, they have climbed through the ranks by being agreeable and presenting no threat to their superiors.

    “Those CEOs are generally too busy playing at the proverbial country club to realize what improvements can be made or what hidden jewels can be unlocked,” he said.

    CEOs are hard to unseat, as they can pack a board with loyal cronies and use company funds to defend against an activist campaign by hiring expensive legal and financial experts, further depleting the coffers.

    Icahn has himself waged endless activist campaigns against companies and their management teams, and most recently succeeded in his effort to shake up management at gene sequencing test maker Illumina Inc.
    ILMN,
    +1.85%
    ,
    as the Associated Press reported.

    Past activist campaigns by Icahn’s company have generated billions of dollars for shareholders and helped boards and CEOs capture untapped value, Icahn has argued, citing Reynolds, Netflix
    NFLX,
    +0.66%
    ,
    Forest Labs, Apple
    AAPL,
    -3.72%
    ,
     CVR Energy 
    CVI,
    -0.40%
    ,
     Herbalife
    HLF,
    -0.32%

    eBay
    EBAY,
    -0.73%
    ,
     Tropicana, Cheniere
    LNG,
    +0.27%

    and Occidental 
    OXY,
    +3.14%

     as examples.

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  • Icahn Enterprises’ stock slides 30% after company halves quarterly distribution to $1 per unit

    Icahn Enterprises’ stock slides 30% after company halves quarterly distribution to $1 per unit

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    Icahn Enterprises L.P.’s stock tumbled 30% on Friday, after the company said it’s cutting its quarterly distribution to $1 from $2 previously.

    The company
    IEP,
    -23.23%

    made the announcement as it reported a surprise quarterly loss with Chairman Carl Icahn, the billionaire activist investor, blaming the news squarely on one thing.

    “I believe the second quarter partially reflected the impact of short selling on companies we control or invest in, which I attribute to the misleading and self-serving Hindenburg report concerning our company, “Icahn said in a statement.

    “It also reflected the size of the hedge book relative to our activist strategy.”

    Icahn was referring to a report by short seller Hindenburg Research published on May 2 that accused IEP, Icahn’s publicly traded investing arm, of overstating asset values. Hindenburg also revealed that Icahn himself had borrowed from the company, among other issues.

    That had been disclosed in a footnote to financials that Wall Street had overlooked.

    Read: What we know about Carl Icahn’s margin loan

    See also: Carl Icahn rebuts short seller Hindenburg Research’s report. It’s already cost his company $6 billion in market cap.

    The report shaved billions off IEP’s market cap and was firmly rebutted by Icahn, who recently said he has finalized amended loan agreements with banks that untie his personal loans from the trading price of his company’s shares.

    Icahn said IEP has paid out distributions for 73 continuous quarters and does not intend for a “misleading” report to interfere with that practice.

    “The payment of future distributions will be determined by the board of directors quarterly, based upon current economic conditions and business performance and other factors that it deems relevant at the time that declaration of a distribution is considered,” said Icahn.

    On a call with analysts, IEP’s Chief Executive David Willetts highlighted the long-term “lumpiness” of the business, given its many moving parts.

    “We have large wins at times and we have volatility, we’re not a company that necessarily has predictable cash flow, there are no guarantees,” he told analysts.

    But IEP is not changing its strategy on distributions, he added.

    The stock was headed for the biggest one-day selloff since it went public 36 years ago. The next biggest drop was 20.0% on May 2, when the Hindenburg Research report was released.

    The company, which is 84% owned by Icahn and his son, Brett, offers exposure to Icahn’s personal portfolio of public and private companies, including petroleum refineries, car-parts makers, food-packaging companies and real estate. Its unit holders are mostly retail investors.

    The fund has performed poorly in the past decade. For many years Icahn has publicly expressed suspicion of the bull market that raged around him. He shorted the stock market in a big way as a hedge against his long activist positions. Going into 2021, for example, Icahn’s investment fund had a short exposure of 142%, SEC filings show.

    For more, see: Carl Icahn admits he was wrong to take a huge short position on the market that lost $9 billion

    Hindenburg, the short selling firm founded by Nate Anderson, took a victory lap on Elon Musk’s X platform, the renamed Twitter, noting that it had predicted that IEP’s poor investment performance would eventually force it to cut the distribution.

    Icahn has himself waged endless activist campaigns against companies and their management teams, and most recently succeeded in his effort to shake up management at gene sequencing test maker Illumina Inc.
    ILMN,
    +1.26%

    In June, that company accepted the resignation of its Chief Executive and director, Francis DeSouza, ending a monthslong heated battle over its $7.1 billion acquisition of cancer test maker Grail that has faced regulatory hurdles, as the Associated Press reported.

    Icahn had urged shareholders to vote out its chairman, John Thompson, and DeSouza. Company shareholders voted out Thompson in late May.

    Past activist campaigns by Icahn’s company have generated billions of dollars for shareholders and helped boards and CEOs capture untapped value, Icahn has argued, citing Reynolds, Netflix
    NFLX,
    +0.14%
    ,
    Forest Labs, Apple
    AAPL,
    -4.80%
    ,
     CVR Energy 
    CVI,
    -0.98%
    ,
     Herbalife
    HLF,
    -0.69%

    eBay
    EBAY,
    -1.28%
    ,
     Tropicana, Cheniere
    LNG,
    -0.95%

    and Occidental 
    OXY,
    +2.11%

     as examples.

    IEP said it had a loss of $269 million, or 72 cents per depositary unit, for the second quarter, wider than the loss of $128 million, or 41 cents per depositary unit, posted in the year-earlier period.

    Revenue fell to $2.684 billion from $3.796 billion.

    The FactSet consensus was for income of 25 cents per depositary unit and revenue of $2.657 billion.

    Meanwhile, investors are waiting to see the outcome of a federal probe of IEP’s corporate governance and other issues, which was disclosed along with first-quarter earnings.

    IEP’s stock is down 35% in the year to date, while the S&P 500
    SPX
    has gained 18%.

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  • Drone attack on tanker shows Kyiv’s intent to hit Russian energy shipments

    Drone attack on tanker shows Kyiv’s intent to hit Russian energy shipments

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    KYIV — An overnight naval drone attack against a Russian tanker in the Black Sea signals a potential new front in the Ukraine war, with Kyiv delivering its strongest message to date that it is willing to target Moscow’s all-important shipments of oil and fuel.

    The battle for supremacy in the Black Sea is ramping up fast, with massive implications for global energy and food security. The attack on the tanker off Crimea came only a day after another Ukrainian marine drone — a flat, arrowhead-shaped vessel packed with explosives — targeted a Russian naval base near the port of Novorossiysk, badly damaging a warship.

    “The tanker was damaged in the Kerch Strait during an attack by the Ukrainian Armed Forces,” Russia’s state-run TASS news agency reported on Saturday. “The crew is safe, the Maritime Rescue Center informed us. The engine room was damaged. Two tugboats arrived at the scene of an emergency with a tanker in the Kerch Strait, the question of the towing vessel is being resolved,” it said.

    Russia’s Federal Marine and River Transport Agency reported it was a SIG oil and chemical tanker — a ship whose owner, St. Petersburg-based company Transpetrochart, was sanctioned by the U.S. in 2019 for supplying jet fuel for Russian forces in Syria.

    Tensions are rising in the Black Sea after Russia last month announced it was withdrawing from the U.N.-brokered Black Sea Grain Initiative and started attacking Ukrainian ports on the Black Sea coast and on the Danube River with missiles, destroying tens of thousands of tons of Ukrainian grain.  

    After those attacks and the blockade, Ukrainian officials issued a statement in July that Russian vessels will be no longer safe in the Black Sea. Kyiv’s defense ministry said in a statement that such vessels “may be considered by Ukraine as carrying military cargo with all the corresponding risks” from midnight Friday.

    On Saturday, Kyiv announced a “war risk area” around Russian ports on the Black Sea, specifically citing the ports of Novorossiysk, Anapa, Gelendzhik, Tuapse, Sochi and Taman. The declaration will be in effect from August 23 “until further notice,” it said.

    ‘Completely legal’

    Marine Traffic, an online maritime tracking site, has the latest position of the SIG tanker fixed near the Kerch Strait “at anchor.”  

    Russia’s Marine and River Transport Agency reported all 11 crew members on board were safe and that the tanker was struck in the engine room near the waterline on the starboard side, presumably as a result of an attack by a marine drone. By morning, the water pouring to the engine room has been staunched, and the vessel was afloat, Russian official said.

    Ukraine almost never directly takes responsibility for these kinds of attacks. However, Vasyl Malyuk, head of the Security Service of Ukraine, or SBU, has previously claimed responsibility for the attacks on the Crimean bridge and hinted that there will be more similar attacks soon.

    “Anything that happens with the ships of the Russian Federation or the Crimean Bridge is an absolutely logical and effective step in relation to the enemy. Moreover, such special operations are conducted in the territorial waters of Ukraine and are completely legal,” Malyuk said in a statement on Saturday.

    “So, if the Russians want that to stop, they should leave the territorial waters of Ukraine and our land. And the sooner they do it, the better it will be for them. Because we will one hundred percent defeat the enemy in this war.”

    Waters near Russian-occupied Crimea and the Kerch Strait are Ukrainian territorial waters, according to international maritime law.

    “Since 1991, Russia has systematically used the territorial waters of Ukraine to organize armed aggressions: against the Georgian people and against the people of Syria,” the Ukrainian Defense Ministry said in a social media post on Saturday.

    “Today, they terrorize peaceful Ukrainian cities and destroy grain, condemning hundreds of millions to starvation. It’s time to say to the Russian killers, ‘It’s enough.’ There are no more safe waters or peaceful harbors for you in the Black and Azov Seas,” the ministry said.

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    Veronika Melkozerova

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  • Weaker Energy Prices Temper Shell’s Profit, but Not Cash Payouts for Investors

    Weaker Energy Prices Temper Shell’s Profit, but Not Cash Payouts for Investors

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    Weaker Energy Prices Temper Shell’s Profit, but Not Cash Payouts for Investors

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  • ‘We simply are nowhere’: EU slams lack of progress at G20 climate meeting

    ‘We simply are nowhere’: EU slams lack of progress at G20 climate meeting

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    G20 climate ministers failed to make progress on key issues on Friday, drawing sharp criticism from the European Union. 

    Talks in the southern Indian city of Chennai took place against the backdrop of scientists finding that July is on track to become the world’s hottest month on record. 

    But the discussions wrapped up without consensus on the global transition away from fossil fuels; last week’s G20 energy ministerial ended on a similar note. 

    The EU, represented by Environment Commissioner Virginijus Sinkevičius at the meeting, responded with exasperation. 

    “At the end of our meeting today, is the glass half full or half empty?” Sinkevičius asked in his closing remarks. “It is certainly empty when we look at where we stand on G20 commitments to address climate change — we simply are nowhere.” 

    Noting the devastation wrought by extreme weather across the globe in recent weeks, he decried the G20’s inability to find agreement on climate and energy issues as “disheartening.” 

    He added: “We cannot be driven by the lowest common denominator, or by narrow national interests. We cannot allow the pace of change to be set by the slowest movers in the room.” 

    France’s Ecological Transition Minister Christophe Bechu also told Agence France-Presse he was “disappointed” with the outcome, adding that discussions with China, Saudi Arabia and Russia in particular had been “complicated.”

    The split forced the Indian G20 presidency to publish an incomplete outcome document on issues countries managed to agree on, as well as an additional chair’s summary on others where ministers did not reach consensus. 

    “There are some issues about energy and target-oriented issues,” Indian Climate Minister Bhupender Yadav acknowledged in a press conference Friday. 

    There was no agreement on setting global goals for scaling up the deployment of renewables and energy efficiency — a key objective for the Emirati presidency of this year’s COP28 climate talks — or on phasing down planet-warming fossil fuels.

    Earlier on Friday, COP28 President Sultan al-Jaber expressed concern that the EU-backed target for tripling global renewable capacity had “yet to find expression in G20 outcomes.” 

    The chair’s summary included a short section on the energy transition that listed the issues that were discussed, concluding: “G20 members expressed views reiterating their positions” outlined at last weekend’s energy ministerial in Goa. 

    Discussions on efforts to reach a peak in global emissions by 2025 also ended without consensus, according to the document. 

    German climate envoy Jennifer Morgan echoed Sinkevičius’ disappointment, saying: “While fires rage around the world and temperatures break records, the G20 as a group has unfortunately been unable to act with the necessary sense of urgency and clarity.” 

    Progress, she added, “was blocked by a small group of countries.”  

    The EU and Germany both praised the G20’s “strong signal” on stepping up the fight against plastic pollution and deforestation, as well as countries’ agreement to look at deep-sea mining regulation.

    Still, on climate, the G20 “were asked to make bold choices, to demonstrate courage, commitment and leadership,” said Sinkevičius. “But we, collectively, failed to achieve that.” 

    All eyes are now on the G20 leaders’ summit in New Delhi in September. 

    “The disappointing G20 energy and climate outcomes show ministers don’t have the mandate to negotiate on the defining issues of our time,” said Luca Bergamaschi, co-founder of Italian climate think tank ECCO. “G20 leaders must step in and together agree the actions needed for a safer planet.”

    Louise Guillot contributed reporting.

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    Zia Weise

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  • AMC, Chevron, Tesla, Domino’s, Microsoft, and More Stock Market Movers

    AMC, Chevron, Tesla, Domino’s, Microsoft, and More Stock Market Movers

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  • Chevron’s Second Quarter Profit Beats Outlook on Record Shale Production

    Chevron’s Second Quarter Profit Beats Outlook on Record Shale Production

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    Chevron said it had record production in the shale-rich Permian Basin region in the second quarter.


    Patrick T. Fallon/AFP via Getty Images



    Chevron


    released a second-quarter performance update on Sunday that was better than expected ahead of the oil major’s earnings announcement this week.

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  • Chevron’s Q2 adjusted profit beats estimates on record Permian production; new CFO announced

    Chevron’s Q2 adjusted profit beats estimates on record Permian production; new CFO announced

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    Chevron Corp. released a second-quarter performance update that was better than expected on Sunday, ahead of the oil major’s earnings announcement this week.

    Adjusted profit of $3.08 a share beat the consensus of $2.97 a share as tracked by FactSet. That is down about 47% from the second quarter last year and down from profit of $3.55 a share in the first quarter of 2023.

    The company also announced its chief financial officer, Pierre Breber, is retiring after 35 years at the company. Eimear Bonner, the chief technology officer, will succeed him starting in March 2024.

    Chief Executive Mike Wirth thanked Breber for his contributions and welcomed Bonner, a 24-year Chevron veteran, saying she can “build on Chevron’s strong foundation and drive further value for shareholders.”

    Chevron
    CVX,
    +1.46%

    said it had record quarterly production in the Permian Basin, 11% higher than last year’s second quarter. It produced 772,000 barrels of oil equivalent a day, and added that it is on-track for its full-year guidance. The Permian is a shale basin covering parts of West Texas and southeastern New Mexico.

    Quarterly shareholder distributions of $7.2 billion also set a record, Chevron said, including $4.4 billion in share buybacks and $2.8 billion in dividends.

    Chevron expects to close the acquisition of shale driller PDC Energy in August.

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