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White House expects ‘frank exchange’ on trade with Chinese official: source

WASHINGTON (Reuters) – Top aides to President Donald Trump look to push a tough line on trade in talks on Thursday with an envoy of Chinese President Xi Jinping, with a White House official saying a frank exchange of views was expected.

Aides say Trump has been increasingly frustrated by the soaring U.S. trade deficit with China, which was $375 billion in 2017, and is considering slapping tariffs on imported steel and aluminum.

That would raise the prospect of retaliation from Beijing and what some analysts see as a possible trade war.

U.S. Treasury Secretary Steven Mnuchin, U.S. Trade Representative Robert Lighthizer and White House economic adviser Gary Cohn will meet jointly with Chinese economic adviser Liu He and his delegation at the White House, the official said on Wednesday, requesting anonymity to discuss the meeting.

“We expect a frank exchange of views on the trade and economic relationship, and that talks will focus on the substantive issues,” the official said.

There was no plan for Trump himself to meet Liu but officials did not rule it out if progress was being made.

White House officials say China has shown little inclination to take steps to reduce the trade deficit in a way that would satisfy Trump and that he is now demanding action.

The U.S. Commerce Department on Feb. 16 recommended that Trump impose stiff curbs on steel imports from China and other countries and offered the president several options ranging from global and country-specific tariffs to broad import quotas.

A blanket tariff on steel would cover every steel and aluminum product entering the American market from China.

A source close to the White House said Trump had expressed interest in imposing a tariff on steel imports of at least 24 percent. The White House said no final decision had been made.

”I don’t think we’ve ever had a better relationship with China than we do right now,“ Trump told reporters last Friday. ”The only thing that can get in its way is trade, because it so one-sided, it’s so lopsided.”

Reporting by Steve Holland; Editing by Tom Brown

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/cqhfPFpcF3g/white-house-expects-frank-exchange-on-trade-with-chinese-official-source-idUSKCN1GC30R

Surge in imports helps curb U.S. fourth-quarter economic growth

WASHINGTON (Reuters) – U.S. economic growth slowed slightly more than initially thought in the fourth quarter after the strongest pace of consumer spending in three years depleted inventories and drew in imports as businesses struggled to produce enough goods and services.

Gross domestic product expanded at a 2.5 percent annual rate in the final three months of 2017, instead of the previously reported 2.6 percent pace, the Commerce Department said in its second GDP estimate on Wednesday. That was a deceleration from the third quarter’s brisk 3.2 percent pace.

(For an interactive graphic on U.S. GDP click tmsnrt.rs/1jLPbzV)

The downward revision to the fourth-quarter growth estimate largely reflected a smaller inventory build than previously reported. The reliance on imports to satisfy domestic demand could further widen the trade deficit and blunt the anticipated economic boost from a $1.5 trillion tax cut package and increased government spending.

Domestic demand grew at an unrevised 4.6 percent rate in the fourth quarter, the fastest pace in more than three years.

“An economy that is at or beyond full employment … cannot match this pace of demand growth and, therefore, must either sell from inventory and/or purchase from abroad,” said John Ryding, chief economist at RDQ Economics in New York.

The trade deficit is likely to worsen in the first quarter. Data on Tuesday showed the goods trade deficit widened sharply in January as exports fell, pointing to slower economic growth in the first three months of the year.

The moderation in GDP was also underscored by other reports on Wednesday showing factory activity in the Midwest slowing to a six-month low in February and contracts to purchase previously owned homes tumbling 4.7 percent in January to the lowest level since October 2014.

Retail sales, home sales, durable goods orders and industrial production have also declined in January.

First-quarter growth tends to be weak because of a seasonal quirk, but output is likely to accelerate for the rest of 2018 as the fiscal stimulus kicks in. GDP growth estimates for the January-March period are as low as a 1.8 percent rate.

The economy grew 2.3 percent in 2017, an acceleration from the 1.5 percent logged in 2016.

Economists believe the economy will hit the Trump administration’s 3 percent annual growth target this year, possibly putting pressure on the Federal Reserve to raise interest rates more aggressively than currently anticipated.

Fed Chairman Jerome Powell struck an upbeat note on the economy before U.S. lawmakers on Tuesday, saying “my personal outlook for the economy has strengthened since December.” Powell also acknowledged that “fiscal policy is becoming more stimulative.” Those remarks prompted traders to raise their bets on four rate increases this year.

The Fed has forecast three rate hikes for 2018. Financial markets expect the first increase to come in March.

“Evidence of a strengthening economy and the potential for further acceleration fueled by fiscal stimulus are likely to keep the Fed on its prescribed tightening path,” said Jim Baird, chief investment officer at Plante Moran Financial Advisors in Kalamazoo, Michigan.

The dollar .DXY rose to a five-week high against a basket of currencies as investors continued to digest Powell’s comments.

Prices for longer-dated U.S. government bonds were trading higher, while stocks on Wall Street were mixed.

ROBUST CONSUMER SPENDING

Growth in consumer spending, which accounts for more than two-thirds of U.S. economic activity, was unrevised at a 3.8 percent rate in the fourth quarter. That was the quickest pace since the fourth quarter of 2014 and followed a 2.2 percent rate of growth in the July-September period.

The acceleration in consumer spending stoked inflation, with the Fed’s preferred measure, the personal consumption expenditures (PCE) price index excluding food and energy, rising at an unrevised 1.9 percent rate. The rise in the so-called core PCE price index was the fastest in more than a year and followed a 1.3 percent pace of increase in the third quarter.

Imports grew at an upwardly revised 14.0 percent pace instead of the previously reported 13.9 percent rate. That was the quickest pace since the third quarter of 2010 and offset a rise in exports driven by weakness in the dollar.

The resulting trade deficit sliced off 1.13 percentage points from GDP growth last quarter, the most in a year, after adding 0.36 percentage point in the third quarter.

Robust consumer spending also curbed the accumulation of inventories, which increased at a rate of $8.0 billion instead of the previously reported $9.2 billion pace. As a result, inventories subtracted 0.70 percentage point from GDP growth after adding 0.79 percentage point in the prior period.

Growth in business spending on equipment was revised up to an 11.8 percent rate from the 11.4 percent pace published last month. That was the best performance since the third quarter of 2014.

The momentum, however, appears to be slowing, with a report on Tuesday showing a second straight monthly decline in core capital goods orders in January.

Investment in homebuilding increased at a 13.0 percent rate, rather than the previously reported 11.6 percent pace, after contracting for two straight quarters. Government spending grew at a 2.9 percent rate, revised down from a 3.0 percent pace. That was the strongest pace since the second quarter of 2015.

Reporting by Lucia Mutikani; Editing by Paul Simao

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/1e-LyqsUDrE/surge-in-imports-helps-curb-u-s-fourth-quarter-economic-growth-idUSKCN1GC1Z1

Valor Resources identifies significant high grade mineralisation at surface

Valor Resources Limited (“VAL” or the “Company“) is very pleased to report the first results of the previously announced surface sampling campaign.  VAL has identified significant high grade mineralisation at surface, approximately 1,500 metres southwest of Berenguela Central, within the Berenguela concession package, in an area called ‘Corona’.

Highlights:

  • • This discovery indicates a possible significant extension to the existing Berenguela central deposit.
  • • VAL’s Corona sampling campaign confirms extensive “Berenguela-style” mineralisation at surface across a substantial area, similar in size to Berenguela Central. 
  • • Drill permitting for Corona target is underway. 
  • • Further sampling results for Berenguela Central pending release in the coming days.

Corona Sampling Highlights:

Management Commentary:

Valor Chairman, Mark Sumner said: “The high-grade copper and silver mineralisation encountered within the Corona area is indicative of further Berenguela-style, near-surface, mineralisation, less than 1,500 metres from the Central deposit area.  The outcropping mineralisation at Corona is very similar to the surface outcrops previously identified at Berenguela Central, so we believe that this is an opportunity to add a completely new deposit to the project within close proximity to Berenguela.  We believe Corona has the potential to add significant resources to the Berenguela project and it is a very valuable discovery.”

“We have always maintained that we have only scratched the surface at Berenguela and the mineralisation tested at Corona is clear evidence of this. Corona was discovered by utilising both historical exploration results, as well as a simple and inexpensive surface sampling and field mapping exercise.  We will continue with more detailed field mapping of the Corona area, so we are fully prepared to test Corona in the next drilling program. 

We have sample results pending from the Berenguela central area also, which will give us an idea of the potential for further at surface, high grade mineralisation.  We expect to announce the central results a week from now.

Corona is a very exciting development for Valor.  Since May 2017, we have increased resources at Berenguela by 80%, more than doubling contained copper and increasing contained silver resources to over 127 million ounces.  We expect Corona to contribute significantly to the value of the Berenguela project in the coming months.”

Sampling Program Overview:

The recent sampling campaign was designed to confirm the extension of the Berenguela Central deposit along the northern, southern and western borders.  Sample locations were selected to both confirm and expand drill targets for the planned 2018 drill program. A total of 85 rock chip samples were taken across Berenguela Central and Corona to confirm mineralisation associated with manganese oxide mantles and veins.  All samples were shipped to SGS labs in Lima for assay.  The results of the program confirmed mineralised significant surface mineralisation at Corona. 

 Geologic Setting

The Berenguela property now consists of two mineralszed zones, Berenguela Central and Corona. The central deposit is bounded on the west by a northwest-southeast trending fault, this orientation is very typical for structural features in Peru. The Ocurviri Fault is the major fault that separates older Mesozoic and Paleozoic rocks from the younger Tertiary Tacaza Group. The Tacaza Group hosts most of the mineralisation at Berenguela Central and the Corona area is located within limestones of the Tacaza Group. The presence of the fault separating the central deposit from the Corona deposit allows for a larger diversity of mineralisation.

Corona Overview Dimensions

Corona is a target approximately 1,500 metres from Berenguela central, separated by the Ocuviri Fault.  Corona shows significant outcropping rock formations with geological characteristics similar to Berenguela central, indicating the presence of a surficial, “Berenguela-style” deposit.  A total of 42 rock chips were taken from the Corona area, with 13 returning values of ³0.50% Cu, with multiple values above 1% and maximum copper values of 2.79% Cu.  A total of 13 samples returned  ³50 g/t Ag with values as high as 431 g/t Ag.  The Corona exploration area is approximately 1,500 metres from the boarders of the Berenguela Central Deposit area.  The current strike length is approximately 1,350 metres NW-SE and approximately 1,000 metres across North to South.

Next Steps

VAL is currently conducting a detailed field mapping exercise at Corona, as well as additional surface sampling to further define drill targets at Corona for the 2018 drill program.  VAL expects to complete the additional sampling and design of the drill program in the coming 4-6 weeks.  The Company will aim to commence drilling in April or May of 2018.

Article source: http://www.mining-journal.com/partners/partner-content/1315965/valor-resources-identifies-significant-high-grade-mineralisation-at-surface

Beowulf in strong position despite Kallak saga

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Article source: http://www.mining-journal.com/resource-definition/news/1315964/beowulf-in-strong-position-despite-ongoing-kallak-saga

Exclusive: U.S. regulators examine Wall Street’s Volcker rule wish list

WASHINGTON (Reuters) – U.S. regulators are considering changes to the “Volcker rule” Wall Street has sought for years that would make it easier and cheaper for banks to comply and allow them more leeway in trading and investing, according to several regulatory and industry sources.

Part of the Dodd-Frank reform law passed after the 2007-2009 financial crisis, the Volcker rule aimed to prevent banks, such as Goldman Sachs (GS.N) and JPMorgan Chase (JPM.N), from making risky market bets while accepting taxpayer-insured deposits.

The rule forced many Wall Street banks, which before the crisis could gamble on their own account across various assets, to restructure their businesses, including overhauling their trading operations and hiving off billions of dollars’ worth of investment vehicles.

Yet banks and some of their customers say the rule, which runs at more than 1,000 pages, is too much of a burden for the financial industry by limiting banks’ ability to facilitate investments and hedges for investors and depressing trading volumes in some assets.

They also say the rule’s complexity and opacity makes it so difficult to satisfy that JP Morgan Chase chief executive Jamie Dimon was once quoted as saying traders would need a lawyer and a psychiatrist by their side to ensure they complied.

While the changes being considered by regulators would not bring back the heady pre-crisis trading activity, they would help address some of these problems, people familiar with the discussions said.

Modifications being considered include: scrapping the presumption that short-term trades are proprietary unless banks prove otherwise, making it clearer which types of funds banks are banned from investing in, permanently exempting some foreign funds from the ban, and anointing a lead regulator to oversee the rule’s enforcement.

Congress is now considering a bill that would exempt lenders with under $10 billion in assets from the rule, but larger banks are lobbying for changes in how the rule is interpreted and applied to them. While financial regulators have said they agree on the need to revise the Volcker rule, some specific changes they are considering have not yet been reported.

Regulators are likely to release their proposals in coming months, in what is expected to be a milestone in President Donald Trump’s promised push for less regulation that could save Wall Street billions of dollars.

“We’re taking a fresh look at the Volcker rule,” said Fed Chairman Jerome Powell before Congress on Tuesday.

The Fed, Federal Deposit Insurance Corporation (FDIC), Office of the Comptroller of the Currency (OCC), Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) have joint responsibility for enforcing the rule and broadly agree it could be simplified.

“There’s unanimity on a need to act,” said one banker briefed on the matter.

Congress wrote the Volcker rule into law but regulators have broad discretion to determine how to make that a reality through writing and enforcing the regulations.

Staff at the agencies have begun gathering data and have identified potential changes, according to several people familiar with the effort. Work will accelerate once Jelena McWilliams becomes FDIC chair, among the last of Trump’s top financial nominees who should be confirmed by the Senate in the coming months.

“You’re going to see momentum start building and start building quickly,” said Tom Quaadman, executive vice president with the U.S. Chamber of Commerce.

Spokesmen for the Fed, FDIC, OCC and CFTC declined to comment. The SEC did not respond to a request for comment.

PRESUMPTION, DEFINITIONS

One major change being discussed would see the reversal of the “rebuttable presumption” which puts the onus on banks to prove their compliance with the Volcker rule. Now, all positions held for fewer than 60 days are considered banned proprietary trading unless banks convince regulators they serve a permitted purpose such as a client trade.

Banks want the burden of proof to shift to regulators, so that all trades will be allowed unless regulators identify an issue while supervising the banks, five people familiar with the discussions said.

Regulators are also considering narrowing the definitions of such terms as “proprietary trading” and “covered funds”, they said. The latter prohibits investments in risky vehicles, such as hedge funds, but it also prevents banks from doing less risky business such as some forms of wealth management.

More clarity about what is allowed and what is not would give banks more flexibility in trading and investment, those people said.

Regulators are also considering further steps to exempt certain overseas funds affected by the rule because of links to banks with U.S. operations. Last July, regulators exempted such foreign funds for a year and are now considering a one year extension or possibly making the exemption permanent, two people briefed on the matter said.

There is general agreement on refining Volcker across the political spectrum, but Democrats – some of whom say the rule does not go far enough – are wary of handing too much discretion to banks when it comes to trading.

So far, banks have lobbied unsuccessfully for Congress to appoint a lead Volcker regulator, ideally the Fed, as part of a reform bill pending in the Senate, according to three sources.

Now, they are now pushing regulators to settle on a lead authority among themselves, or at least agree on a consistent standard for supervising and enforcing the rule.

Bankers and regulators acknowledge that getting all five watchdogs to march in lockstep will be tough and asking some of them to cede their authority will be even tougher.

The OCC initially seized the initiative issuing a public consultation on Volcker in August, but since then the Fed has taken the lead, banking sources said. Powell said on Tuesday the Fed was the “natural” lead for the rewriting effort.

“It’s like turning an aircraft carrier,” said Quaadman. “But now you’re seeing they’re beginning.”

Reporting by Pete Schroeder; additional reporting by Michelle Price and Patrick Rucker; Editing by Tomasz Janowski

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/QuirGDMLAf4/exclusive-u-s-regulators-examine-wall-streets-volcker-rule-wish-list-sources-idUSKCN1GC1ZX

Wall Street climbs after GDP growth revised lower

(Reuters) – Wall Street’s main indexes rose on Wednesday after the downward revision of U.S. economic growth in the fourth quarter weakened the case for faster increases in interest rates.

The U.S. Commerce Department said gross domestic product expanded at a 2.5 percent annual rate, instead of the previously reported 2.6 percent pace.

Strong economic data earlier in the month had raised fear among traders that U.S. interest rates would rise faster than previously expected, sparking Wall Street’s biggest selloff in two years.

Even with the gains in recent weeks, the SP 500 .SPX and the Dow .DJI are still on course for their first monthly fall since last March.

“As February comes to a close, large gyrations experienced during the month could very well spill into next month as topic of rates dominates,” Peter Cardillo, chief market economist at First Standard Financial in New York, wrote in a note.

By 9:32 a.m. ET, the Dow had added 105.47 points to 25,515.5. The SP 500 .SPX rose 0.43 percent to 2,756.19 and the Nasdaq Composite .IXIC gained 0.52 percent to 7,368.17.

A string of retail earnings drove gains in the SP retail index .SPXRT, which was up 0.94 percent.

Online retailer Etsy (ETSY.O) jumped 18 percent after its revenue beat estimates, and off-price apparel seller TJX (TJX.N) rose 6.5 percent after reporting upbeat same-store sales.

Shares of No.2 home improvement chain Lowe’s (LOW.N) fell nearly 9 percent after its quarterly profit and margins missed estimates as it spent heavily to take on competition.

Celgene (CELG.O) fell 6 percent after U.S. health regulators rejected the company’s application seeking approval of a key multiple sclerosis drug.

A Reuters analysis showed global investors cut their equity exposure to a three-month low in February, though most still expect stocks to test new highs despite rising bond yields.

The U.S. 10-year Treasury yields US10YT=RR, the benchmark for global borrowing costs, was last at 2.8825 percent after spiking as much as 2.9250 percent on Tuesday.

Wall Street’s main volatility gauge, the CBOE Volatility index .VIX eased to 17.56 points after hitting as much as 18.98 during Powell’s testimony.

Advancing issues outnumbered decliners on the NYSE by 1,960 to 475. On the Nasdaq, 1,577 issues rose and 628 fell.

Reporting by Sruthi Shankar in Bengaluru; Editing by Anil D’Silva

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/vsIMBltz5cU/wall-street-climbs-after-gdp-growth-revised-lower-idUSKCN1GC1TL

‘Pharma bro’ Shkreli seeks 12 to 18 month sentence, below guidelines

NEW YORK (Reuters) – Martin Shkreli, the former drug company executive convicted of defrauding investors in two hedge funds he ran, has asked a federal judge to sentence him to 12 months to 18 months in prison, much less than suggested federal guidelines.

Shkreli, 34, has been in jail since September, when U.S. District Judge Kiyo Matsumoto revoked his bail after he offered a $5,000 bounty for a strand of Hillary Clinton’s hair in a Facebook post. Matsumoto is scheduled to sentence him on March 9.

Shkreli’s lawyers said in a court filing on Tuesday that the sentence of 27 years or more calculated using federal guidelines was “draconian and offensive.”

In addition to the prison sentence, they proposed Shkreli complete 2,000 hours of community service and undergo court-mandated therapy.

Prosecutors are expected to submit their own proposed sentence next week.

Shkreli, nicknamed “Pharma Bro,” raised the price of anti-infection drug Daraprim by over 5,000 percent in 2015 while he was chief executive officer of Turing Pharmaceuticals.

A jury found him guilty last August of unrelated securities fraud charges by lying to investors about the performance of his hedge funds, MSMB Capital and MSMB Healthcare. He also was found guilty of conspiring to manipulate the stock price of a drug company he founded, Retrophin Inc (RTRX.O).

Shkreli’s investors eventually came out ahead after he paid them in shares of Retrophin, and in some cases through settlement agreements and consulting contracts with the company, according to testimony at trial.

However, Matsumoto ruled Monday that he would still be held responsible for defrauding investors out of millions of dollars, because he secured their investments through fraud.

Reporting by Brendan Pierson in New York; Editing by Jeffrey Benkoe

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/oFioFa9WzKk/pharma-bro-shkreli-seeks-12-to-18-month-sentence-below-guidelines-idUSKCN1GC258

Herbalife plans stock split, to change name

(Reuters) – Herbalife (HLF.N) said it plans to change its corporate name, refinance debt and effect a 2-for-1 stock split as part of initiatives to boost shareholder returns.

Herbalife intends to change its name to ‘Herbalife Nutrition Ltd’ and is seeking to refinance a portion of its $1.15 billion outstanding convertible notes due Aug. 15, 2019.

The company said it also intends to pursue a “modified Dutch auction” tender offer seeking to purchase between $450 million and up to $650 million of shares of its outstanding common stock.

Reporting by Vibhuti Sharma in Bengaluru; Editing by Saumyadeb Chakrabarty

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/uAMsLmz9vxM/herbalife-plans-stock-split-to-change-name-idUSKCN1GC247

Lowe’s forecasts further squeeze as results disappoint

(Reuters) – Lowe’s Companies Inc’s (LOW.N) profit and margins fell well short of Wall Street estimates on Wednesday as the No. 2 U.S. home improvement chain spent heavily to take on competition in an improving housing market.

The company’s shares tumbled about 8 percent in premarket trading after Lowe’s forecast same-store sales growth would slow this year and operating margins would fall.

“Given the rapidly evolving competitive landscape, we are also accelerating our strategic investments leveraging the benefits of tax reform,” Chief Executive Officer Robert Niblock said.

“As we enter 2018, we are working diligently to improve execution with a focus on conversion, gross margin, and inventory management.”

Lowe’s net income fell 12.5 percent to $554 million, or 67 cents per share, in the fourth quarter. Its adjusted earnings of 74 cents per share were well below analysts’ average estimate of 87 cents.

That compared poorly to Lowe’s bigger rival Home Depot Inc (HD.N), which topped estimates last week as it drew in more shoppers who spent more on average, with same-store sales jumping 7.5 percent.

Lowe’s same store sales also rose – by 4.1 percent in the fourth quarter – but its gross margins fell to 33.73 percent, missing analysts estimates of 34.27 percent.

BTIG analyst Alam Rifkin pointed to the impact of last year’s hurricanes across Florida and Texas, where Lowe’s has a large number of stores, as one reason for that squeeze.

The lumber and building materials that homeowners bought in bulk last autumn to rebuild after a violent storm season normally come with much tighter mark-ups for retailers than other manufactured goods.

Lowe’s net sales fell nearly 2 percent to $15.49 billion, but topped estimates of $15.33 billion, as did same-store sales.

“That’s about where the ‘good news’ ends,” said RBC Capital Markets analyst Scot Ciccarelli said.

Concerns about rising mortgage rates and the impact of the U.S. tax reforms on higher-priced homes have begun to weigh on stocks of homebuilders and construction retailers alike.

Data this week showed January was the first year-on-year drop in sales of new U.S. single-family homes in five months, helping spark losses for housebuilders D.R. Horton Inc (DHI.N), Toll Brothers Inc (TOL.N) and Lennar Corp (LEN.N) on Tuesday.

Lowe’s operating margins rose to 9.60 percent last fiscal, but are expected to decrease about 30 basis points this year.

The company also expects full-year same-store growth to slow to about 3.5 percent, from 4 percent last fiscal year.

Lowe’s shares were down 8.3 percent at $87.90. Home Depot’s shares were off 0.18 percent at $184.65.

Reporting by Aishwarya Venugopal in Bengaluru; Editing by Savio D’Souza

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/2Qpli_HfGtc/lowes-forecasts-further-squeeze-as-results-disappoint-idUSKCN1GC1GR