By Archishma Iyer

(Reuters) -National Australia Bank said on Tuesday third-quarter margins declined due to increased home lending competition and higher deposit costs, even as cash earnings rose by 5%, beating market estimates.

A high interest rate environment has benefited Australian banks, but they now face headwinds from rising bad debt and increasing competition for mortgages.

Shares of the country’s second-biggest bank rose 1.3% to trade at A$28.70 at 0115 GMT.

Last week, the country’s biggest lender Commonwealth Bank of Australia posted record annual profit but warned higher living costs were pushing up debt arrears and competition was squeezing margins.

NAB’s net interest margin (NIM) – a key measure of profitability – slipped to 1.72% in the April-June quarter from 1.77% as at March 31.

“We know this environment is challenging for our customers, but pleasingly, most are proving resilient with only a modest deterioration in asset quality in 3Q23,” said NAB Chief Executive Ross McEwan.

“Consensus NIM expectations might need to moderate down, but the current run rate in earnings would suggest NAB is on track to deliver on fourth quarter FY23 cash earnings expectations,” analysts from UBS wrote.

The bank announced a A$1.5 billion ($973.05 million) share buyback, which will lower the common equity tier 1 ratio – a measure of capital position and financial strength to 11.9% down from 12.2% as at March-end.

Loan repayments delayed more than 90 days stood at 0.71% of the bank’s total gross loans, up five basis points from the previous quarter.

NAB recorded a credit impairment charge of A$244 million, which reflected a modest deterioration in asset quality across the group and volume growth.

It posted cash earnings of A$1.90 billion, compared with A$1.80 billion a year earlier and beating a Visible Alpha consensus of A$1.83 billion.

($1 = 1.5415 Australian dollars)

(Reporting by Upasana Singh and Archishma Iyer in Bengaluru; Editing by Shilpi Majumdar, Shinjini Ganguli and Sohini Goswami)

By Nausheen Thusoo

(Reuters) – Australia’s Treasury Wine Estates said on Tuesday it was well positioned to deliver growth in fiscal 2024 after the winemaker reported a 3.3% fall in annual profit, mainly hurt by lower sales in the United States.

The Melbourne-headquartered company expects demand for luxury wine to grow globally this year, led by its Penfolds label, and with potential upside from improving relations between Australia and China.

However, luxury wine sales growth is expected to be modest in its highest revenue-generating segment, Treasury Americas, before picking up from 2025.

“Outlook commentary appears to support consensus forecasts for Treasury Wine with potential additional upside from improved China relations,” analysts at Jefferies wrote in a note.

Treasury said continued improvement in Australian and Chinese relations after a years-long diplomatic freeze could see a lifting of Chinese tariffs on Australian wine.

The world’s biggest standalone winemaker previously drew a third of its profits from China before anti-dumping and subsidy tariffs of up to 212% were imposed on Australian wine, effectively ending sales, in 2020.

Treasury shares were up as much as 1.8% during early trade, while the broader market was 0.4% higher.

Australia’s largest wine maker reported a net profit after tax of A$254.5 million for the year ended June 30, compared with A$263.2 million a year earlier, with a fall in premium products shipments and low availability of luxury wines pressuring sales at Treasury Americas.

The wine maker had previously flagged challenging market conditions and a weak consumption outlook for its commercial-grade wine, especially in Australia and Britain, which it reiterated on Tuesday.

Treasury Wine declared a final dividend of 17 Australian cents per share, higher than last year’s dividend of 16 cents.

The company also said it had appointed John Mullen as its chairman. He will succeed Paul Rayner, who will leave the company on Oct. 16.

Rayner had been associated with the company for more than a decade and started as a non-executive director of Treasury Wine since May 2011.

(Reporting by Nausheen Thusoo and John Biju in Bengaluru; Editing by Shounak Dasgupta and Stephen Coates)

By Andrew Chung

(Reuters) – President Joe Biden’s administration urged the U.S. Supreme Court to take up a dispute over Republican-backed laws in Texas and Florida that would undercut efforts by social media companies to curb content deemed objectionable on their platforms.

The states call the actions impermissible censorship.

The justices are considering taking up two cases involving challenges to the state laws brought by technology industry groups including NetChoice, whose members include Meta Platforms Inc Alphabet Inc, and X, formerly known as Twitter.

Supporters of the laws, passed in 2021, have argued that social media platforms have silenced conservative voices, while advocates of content moderation have argued for the need to stop misinformation and advocacy for extremist causes.

Florida is seeking to revive its law after a lower court ruled largely against it, while the industry groups are appealing a separate lower court decision upholding the Texas law, which the Supreme Court blocked at an earlier stage of the case.

Invited to weigh in on the dispute, the Justice Department on Monday said the cases merit review because the laws burden the platforms’ rights under the U.S. Constitution’s First Amendment, which protects freedom of speech.

“When a social-media platform selects, edits, and arranges third-party speech for presentation to the public, it engages in activity protected by the First Amendment,” the Justice Department said in a written brief.

The cases would test the argument made by the industry groups that the First Amendment protects platforms’ editorial discretion and prohibits governments from forcing them to publish content against their will.

The companies have said that without editorial discretion their websites would be overrun with spam, bullying, extremism and hate speech.

Florida’s law requires large platforms to “host some speech that they might otherwise prefer not to host” by disclosing censorship rules and prohibiting the banning of any political candidates. Texas’ law forbids censoring users based on “viewpoint.”

(Reporting by Andrew Chung in New York; Editing by Sonali Paul)

By Hannah Lang

WASHINGTON (Reuters) – The U.S. dollar hit more than a one-month high on Monday as investors sought a safe haven due to concerns about China’s economy, and traders braced for possible Japanese government intervention after the yen hit its lowest level since November.

The dollar index, which tracks the currency against its major peers, was up 0.301% at 103.170, hitting its highest level in more than a month.

Analysts said investors bought the dollar as shelter from concerns about the health of the global economy, particularly China.

A source told Reuters that Country Garden, China’s largest private developer, is seeking to delay payment on a private onshore bond for the first time, in a new sign of stress in the sector.

Meanwhile, two Chinese listed companies said at the weekend they had not received payment on maturing investment products from asset manager Zhongrong International Trust Co.

“A lot of traders are focusing again on China,” said Edward Moya, senior market analyst at OANDA. “I think there’s so much concern with just their growth outlook, with their current property crisis, and I think one of the biggest wealth managers not being able to make [their] debt obligations is a big red flag.”

Japan’s yen was trading at its lowest level since November at 145.50 per dollar, with the dollar up 0.36% against the currency.

The Bank of Japan has stuck to its ultra-loose monetary policy as other global central banks hiked interest rates, making returns in other countries look more attractive and weighing heavily on the yen.

Japan intervened in currency markets in September when the dollar rose past 145 yen, prompting the Ministry of Finance (MOF) to buy the yen and push the pair back to around 140 yen. The yen is down nearly 10% against the dollar for the year.

“I wouldn’t be too surprised if we see some news out of the Bank of Japan in the next week or two especially if yen starts to move towards, say, 147, that they’re going to start to make some moves to strengthen the currency,” said Helen Given, FX trader, at Monex USA in Washington.

The Australian dollar slid to its lowest level since May and was last down 0.28% versus the U.S. dollar at $0.648. The currency is often seen as a proxy for investor sentiment on China.

Sterling was last down 0.16% to $1.2676, while the euro was 0.38% lower at $1.09045.

Russia’s rouble reversed course after falling past 100 per U.S. dollar on Monday, driven in large part by the Russian current account surplus shrinking as energy export revenue dropped and government spending on the Ukraine war remained high.

That reversal came after Russia’s central bank sparked expectations of another hefty rate hike in announcing an extraordinary policy meeting for Tuesday.

Argentina’s peso fell on Monday after a far-right libertarian who wants to axe the central bank and dollarize the economy unexpectedly won a primary election. That prompted the Argentine government to devalue its currency by nearly 18%.

Economic data could move currencies later in the week, as investors will scrutinize Chinese industrial output and consumer spending data on Tuesday before minutes from the latest U.S. Federal Reserve meeting on Wednesday. British inflation figures are also due on Wednesday.

Japanese GDP data is due on Tuesday, ahead of inflation figures on Friday.

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

Currency bid prices at 3:00PM (1900 GMT)

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

Previous Change

Session

Dollar index 103.1700 102.8700 +0.30% -0.309% +103.4600 +102.7600

Euro/Dollar $1.0904 $1.0947 -0.38% +1.77% +$1.0965 +$1.0874

Dollar/Yen 145.5050 144.9550 +0.38% +10.98% +145.5700 +144.6500

Euro/Yen 158.66 158.65 +0.01% +13.09% +158.8200 +158.2000

Dollar/Swiss 0.8790 0.8764 +0.30% -4.94% +0.8828 +0.8756

Sterling/Dollar $1.2674 $1.2697 -0.16% +4.82% +$1.2713 +$1.2617

Dollar/Canadian 1.3468 1.3446 +0.19% -0.57% +1.3478 +1.3437

Aussie/Dollar $0.6479 $0.6498 -0.28% -4.94% +$0.6503 +$0.6454

Euro/Swiss 0.9585 0.9595 -0.10% -3.13% +0.9613 +0.9576

Euro/Sterling 0.8601 0.8620 -0.22% -2.75% +0.8632 +0.8601

NZ $0.5966 $0.5985 -0.29% -6.02% +$0.5991 +$0.5944

Dollar/Dollar

Euro/Norway 11.4239 11.4084 +0.14% +8.86% +11.4769 +11.4069

Dollar/Sweden 10.8100 10.8246 -0.52% +3.86% +10.8866 +10.7707

Euro/Sweden 11.7893 11.8505 -0.52% +5.73% +11.8886 +11.7734

(Reporting by Hannah Lang in Washington; Additional reporting by Harry Robertson in London and Ankur Banerjee in Singapore; Editing by Susan Fenton, Kirsten Donovan, Paul Simao and Cynthia Osterman)

By Saeed Azhar and Amruta Khandekar

NEW YORK (Reuters) – The S&P 500 and the Nasdaq closed higher on Monday as shares of chipmaker Nvidia surged following a bullish note from Morgan Stanley, leading gains in other megacap growth stocks.

Nvidia jumped 7.1%, its biggest single-day increase since May 25, when its 24% surge on a stellar revenue forecast pointed to the game-changing potential of artificial intelligence.

The rally in the chipmaker’s stock pushed the information technology index 1.85% higher, making it the strongest of 11 S&P 500 sector indexes.

Other megacap growth stocks rose, including Alphabet, up 1.4% and Amazon.com, up 1.6%. Chipmaker Micron Technology ended with a 6.1% gain.

The S&P 500 climbed 0.58% to end the session at 4,489.72 points. The Nasdaq gained 1.05% to 13,788.33 points, while Dow Jones Industrial Average rose 0.07% to 35,307.63 points.

“It’s the first day in a while that tech has really significantly outperformed,” said Jay Hatfield, CEO of Infrastructure Capital Advisors in New York.

“That’s indicative of the fact that you have this blockbuster Nvidia report coming up and that could support the tech market pretty substantially.”

Nvidia, one of several tech companies rallying this year on optimism about AI, is due to report quarterly results next week.

“NVIDIA remains our top pick, with a backdrop of the massive shift in spending towards AI, and a fairly exceptional supply-demand imbalance that should persist for the next several quarters,” Morgan Stanley analysts said in a note on Monday.

Tesla fell 1.2% after the electric automaker said it had cut prices in China for some Model Y versions.

Market focus this week will be on quarterly earnings from major U.S. retailers including Walmart and Target.

Expected economic data includes retail sales for July that will shape expectations for the direction for U.S. interest rates.

Traders see a nearly 89% chance that the Fed will keep its interest rates unchanged next month, according to CME Group’s Fedwatch tool.

Goldman Sachs’ latest report said its baseline forecast calls for the Fed to start cutting the funds rate in

the second quarter of 2024.

Keeping a lid on global market sentiment, investors remained concerned about China’s highly leveraged property sector after the country’s top private property developer, Country Garden, sought to delay payment on a private onshore bond for the first time.

PayPal Holdings rose 2.8% after the company named Alex Chriss, a top executive at tax-preparation software firm Intuit, as its new chief executive officer.

AMC Entertainment common shares tumbled almost 36%. On Friday, a Delaware judge approved the theater chain’s revised stockholder settlement. The company’s preferred stock surged 16%.

Hawaiian Electric Industries shares plunged almost 34%, as scrutiny mounted over whether the utility’s equipment played any role in deadly wildfires that burnt through the coastal Maui town of Lahaina.

Volume on U.S. exchanges was light, with 9.7 billion shares traded, compared to an average of 10.9 billion shares over the previous 20 sessions.

Declining stocks outnumbered rising ones within the S&P 500 by a 1.1-to-one ratio.

The S&P 500 posted 8 new highs and 11 new lows; the Nasdaq recorded 50 new highs and 192 new lows.

(Reporting by Amruta Khandekar and Shristi Achar A in Bengaluru and Saeed Azhar in New York; Editing by Arun Koyyur, Maju Samuel and David Gregorio)

By Priyamvada C

(Reuters) -U.S. Steel shares extended their rally on Monday after privately held firm Esmark made a $7.80 billion all-cash offer for the company, topping a rejected bid from Cleveland-Cliffs.

The offer from Esmark valued each share of U.S. Steel at $35, which represents a premium of 54% to the stock’s $22.72 close on Friday. Esmark did not provide any details on how it plans to fund its takeover offer.

“This is the first (time) that we have heard from Esmark,” a U.S. Steel spokesperson told Reuters.

“We welcome them to join the multiple parties already in our previously announced strategic alternatives process.”

U.S. Steel shares had started Monday on a firmer note after the company said over the weekend it will review options after getting “multiple unsolicited proposals”.

The rally reflected growing expectations of a takeover at the Pittsburgh-based steel company that has posted several quarters of falling revenue and profit in the face of high raw material and energy costs.

The company said on Sunday it rejected a $7.3 billion cash-and-stock offer from Cleveland-Cliffs, the largest flat-rolled steel producer in North America. It, however, said it has invited Cleveland-Cliffs to be a part of the review process.

“CLF appears like the only logical acquirer for 100% of U.S. Steel,” said Citi analyst Alex Hacking, adding that the company is worth more to Cleveland-Cliffs than anyone else.

The United Steelworkers union also supports Cleveland-Cliffs’ bid to acquire U.S. Steel, the union’s international president, Thomas Conway, told Reuters in an interview, adding that the company is the best strategic buyer.

If the two firms were to combine, it would be the largest steel producer in North America, the 10th-largest producer in the world, and a dominant supplier to the transportation sector, KeyBanc Capital Markets analyst Philip Gibbs said in a note.

“We view the probability of this deal getting done without meaningful concessions as low,” Gibbs added.

Despite concerns around antitrust regulations, analysts at B. Riley believe that Cleveland-Cliffs is “well positioned” to offer the most compelling economics.

NYMEX U.S. Midwest Hot-rolled steel futures have fallen about 9% so far this year, but remain above pre-pandemic levels.

Cleveland-Cliffs has been betting on acquisitions to bolster growth and take on competition from China – it bought AK Steel and the U.S. business of ArcelorMittal in 2020.

The company went public with its offer after U.S. Steel rejected the bid as being “unreasonable”, announcing a formal review process instead, and said it received multiple bids for parts or all of its business.

The U.S. steel industry is protected by 25% tariffs imposed by former President Donald Trump in 2018 that have largely been kept in place by the Biden Administration.

The tariffs imposed on steel imports, mainly from China, increased U.S. domestic production and initially led to a drop in steel prices. However, increased demand left manufacturers grappling with shortages of the widely used metal and prices rose.

(Reporting by Priyamvada C in Bengaluru; Additional reporting by Reshma George and Arpan Daniel Varghese in Bengaluru and Bianca Flowers in Chicago; Editing by Saumyadeb Chakrabarty, David Gaffen, Shweta Agarwal, Pooja Desai and Shounak Dasgupta)

By Andrea Shalal

LAS VEGAS (Reuters) -Treasury Secretary Janet Yellen made a robust pitch in the swing state of Nevada on Monday that President Joe Biden’s policies are powering historic job growth and rebuilding competitiveness, despite polls showing Americans remain skeptical.

Speaking at a union hall just off the famous Las Vegas strip, Yellen underscored the importance of the climate-focused Inflation Reduction Act, which marks its anniversary on Wednesday, especially in a summer that has made headlines with record heat and climate change-related disasters.

“It’s our nation’s boldest-ever climate action. And it is beginning to spark an economic renaissance in communities that had been left behind,” Yellen said at International Brotherhood of Electrical Workers Local 357, after touring a nearby training center where workers learn to work on clean-energy projects.

Yellen said her visit to Nevada, a key battleground state in the 2024 presidential election, is part of a major push by Biden and his cabinet to promote the positive impact of the IRA and other policies that she said are boosting long-term growth and making the United States more resilient to future shocks.

“Americans are beginning to see in their daily lives the impact of that, but there’s a lot more coming down the pike,” she said, adding that polls already showed a large share of Americans felt good about their personal situation, even if they had weaker views on the broader economy.

Yellen said China’s slowing growth, Russia’s war in Ukraine and climate change could still pose risks to the U.S. economy and did not rule out a recession, but she felt upbeat.

“I feel very good about U.S. prospects overall,” Yellen told reporters, noting that inflation and the unemployment rate had both dropped below 4%, and that the U.S. economy was continuing to expand.

The U.S. economy has outrun recession warnings with record-low unemployment, strong wage gains and better-than-expected GDP growth, but many voters who backed Biden in 2020 think the economy has fared poorly, and may not vote for him in the 2024 election, a recent Reuters/Ipsos poll showed.

Nevada’s economy, which is heavily service-driven, has largely recovered from the pandemic, but its unemployment rate of 5.4% is the highest of the 50 U.S. states, according to June data from the nonpartisan public officials’ association the National Conference of State Legislators.

Asked about Nevada’s higher unemployment rate, she said, the IRA had brought down health care costs for citizens, and clean energy tax credits were helping diversify the economy beyond the traditional tourism.

“Workers are better off than they were last year. Real average hourly earnings have grown over the past year – meaning that wage gains are outpacing inflation,” she said in her speech.

She said over 13 million jobs had been created since Biden took office and the share of prime-age Americans – those between ages 25 and 54 – participating in the workforce had reached its highest level in over 20 years.

The share of prime-age female workers currently working was the highest it has ever been, Yellen said, noting that jobless rates for Black and Latino Americans were also among the lowest on record.

“These are not abstract statistics,” Yellen told the IBEW members. “These are real Americans back at work – able to put food on the table, support their families, and save for retirement.”

IRA’S IMPACT ON LOW-INCOME COMMUNITIES

Yellen said a central goal of the IRA was revitalizing communities that had suffered industrial decline or were left behind. Targeted bonuses had helped concentrate investments in clean energy, electric vehicles and batteries in counties that previously lagged in earnings, college graduation rates, and child poverty rates, she said.

She also touched on the challenges of transitioning away from fossil fuels, citing the risks posed by over-concentration of key inputs such as batteries, solar panels and critical minerals in a handful of countries.

She named no countries, but a recent report by the International Energy Agency said China holds at least 60% of the world’s manufacturing capacity for most mass-manufactured technologies, such as solar photovoltaic and wind systems.

Yellen said one of the goals of the IRA, which includes $500 billion in new spending and tax breaks, was to build a diversified clean-energy supply chain and “reduce chokepoints, mitigate disruptions, and protect our economic security.”

The full impact won’t be known until last year, when taxpayers claim tax creditrs, but a Treasury official said the private sector has announced over $110 billion in new clean- energy investments since the bill’s passage a year ago.

(Reporting by Andrea Shalal in Las Vegas; Editing by Diane Craft, Matthew Lewis and Sonali Paul)

By David Randall and Saqib Iqbal Ahmed

NEW YORK (Reuters) -Michael Burry, the money manager made famous in the book and film “The Big Short,” held bearish options against the broad S&P 500 and Nasdaq 100 Index at the end of the second quarter, according to securities fillings released on Monday.

Burry’s Scion Asset Management bought put options with a notional value of $739 million against the popular Invesco QQQ Trust ETF during the quarter, and separate put options with a notional value of $886 million against the SPDR S&P 500 ETF.

Put options convey the right to sell shares at a fixed price in the future and are typically bought to express a bearish or defensive view.

It was not clear what the fund paid to buy the puts – an amount that could be a small fraction of their notional value – or the contracts’ present value, given that regulatory filings do not require the disclosure of options strikes, purchase prices and expiration dates.

Since the filings disclose only long positions it was also not clear whether the puts were held outright or as part of a larger trade involving other contracts that might have been sold short.

Burry rose to fame with his bets against the U.S. housing market before the 2008 financial crisis. Michael Lewis’ nonfiction book “The Big Short” was released in 2010 and the movie version came out in 2015.

The S&P 500 is up roughly 17% for the year to date while the Nasdaq 100 is up nearly 39% over the same period. Outsized gains in a handful of megacap companies such as Nvidia and Meta Platforms have fueled much of the year’s rally.

The filing also showed that the fund liquidated its stakes in Chinese e-commerce company JD.com and Alibaba Group Holdings, as well as regional banks including PacWest and Western Alliance Bancorp that it had bet on in the first quarter.

The firm noted it had sold its 150,000 shares of First Republic Bank as well, but did not indicate whether that came before the company’s May 1 collapse.

Among its long positions, the fund more than doubled its stake in online luxury goods market RealReal Inc, which is up nearly 100% for the year to date, and added new stakes in iHeartMedia, HanesBrands, and Warner Bros. Discovery, among others, the filing showed.

Shares of iHeartMedia and HanesBrands are each down 16% or more for the year to date, while shares of Warner Brothers Discovery are up nearly 43%.

The firm also added 10,000 shares of the iShares MSCI Japan ETF, which is up 13.5% for the year to date.

Scion Asset Management did not respond to a request for comment. Its positions were reported in quarterly filings known as 13-fs, which show its holdings at the end of the most recent quarter and may not reflect current positions. While backward- looking, these filings are one of the few ways that investors can see the positions of institutional investors such as hedge funds.

Burry, who frequently turns over his portfolio, drew wide attention last August when he dumped all of his long positions and bought a stake in prison company Geo Group Inc. He no longer owns shares of the company.

(Reporting by David Randall and Saqib Iqbal Ahmed in New YorkEditing by Ira Iosebashvili and Matthew Lewis)