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Major crypto broker Voyager Digital suspends all trading, deposits and withdrawals

• Digital asset brokerage Voyager Digital is pausing all customer temporarily suspending customer trading, deposits, and withdrawals, according to a statement released Friday afternoon.
• “This was a tremendously difficult decision, but we believe it is the right one given current market conditions,” said Stephen Ehrlich, CEO of lending company Voyager.

https://www.cnbc.com/2022/07/01/voyager-digital-suspends-all-trading-deposits-and-withdrawals-.html

Oil prices dipped in volatile trading on Thursday as concerns over global supply appeared to outweigh a build in U.S. fuel product inventories as OPEC+ decided stick to its measured output strategy.

Brent crude futures for September, the more actively traded contract, were down 96 cents, or 0.9%, at $111.49 a barrel. The August contract, which expires on Thursday, was down 78 cents, or 0.7%, at $115.48.

U.S. West Texas Intermediate (WTI) crude futures fell $1.25, or 1.1%, to $108.53.

The OPEC+ group of producers including Russia, on Thursday agreed to stick to its output strategy after two days of meetings, sources told Reuters.

Sanctions on Russian oil since Russia’s invasion of Ukraine have helped to send energy prices soaring, stoking inflation and recession fears.

Crude inventories fell by 2.8 million barrels in the week to June 24, U.S. Energy Information Administration data showed, far exceeding the 569,000 barrel drop forecast in a Reuters poll of analysts.

However, fuel stocks rose as refiners ramped up activity, operating at nearly full capacity, the highest at this time of year in four years.

“The net drop in crude oil inventories was flattered by SPR (Strategic Petroleum Reserve) releases, while the gasoline stock jump is because U.S. refineries are running at over 95% capacity,” said Jeffrey Halley, OANDA’s senior market analyst for Asia Pacific.

But further disruptions to supply could limit price declines amid a suspension of Libyan shipments from two eastern ports while Ecuador output fell because of ongoing protests.

Exports of Ecuador’s Oriente crude remain suspended under a force majeure declaration as the spread of anti-government protests hurt oil output, state-run Petroecuador said on Wednesday.

Supreme Court says EPA does not have authority to set climate standards for power plants

The Supreme Court on Thursday ruled the EPA does not have authority to set standards on climate-changing greenhouse gas emissions for existing power plants.

The court’s ruling on the case, West Virginia v. the Environmental Protection Agency, affects the federal government’s authority to set standards for planet-warming pollutants like carbon dioxide from existing power plants under the landmark Clean Air Act.

The decision could have a major impact on the Biden administration’s agenda to combat climate change, specifically the goal to zero out carbon emissions from power plants by 2035 and halve the country’s emissions by the end of the decade.

Fossil fuel-fired power plants are the second-largest source of pollution in the U.S. behind transportation, according to the EPA. The U.S. is also the second-largest producer of greenhouse gases behind China, making it a key player in global efforts to combat climate change.

The court’s six-justice conservative majority has been skeptical of the federal agency’s authority to set national standards.

The legal fighting over the EPA’s authority began several years ago when the Obama administration set strict carbon limits for each state in an effort to reduce emissions from power plants, and urged states to meet limits by shifting to cleaner energy alternatives like wind and solar.

The Obama administration’s Clean Power Plan was temporarily blocked in 2016 by the Supreme Court and then repealed in 2019 by the Trump administration, which argued that the plan exceeded the EPA’s authority under the Clean Air Act. It argued that the act only allowed the agency to set standards on the physical premises of a power plant — or “inside the fenceline.” 

The Trump administration proposed more lenient standards to regulate emissions only from existing coal-fired steam plants, a policy called the Affordable Clean Energy Rule. The revision was challenged by states and environmental groups and ultimately struck down by the U.S. Court of Appeals for the District of Columbia Circuit.

Since then, there hasn’t been an EPA standard with respect to carbon pollution from existing power plants.

Republican attorneys general led by West Virginia, a major coal producer, along with coal companies and industry groups, pursued the case, arguing that the EPA doesn’t have the authority to transition the country to cleaner energy sources and that such authority belongs to Congress.

Lawyers representing the EPA and U.S. utility industry lobby groups pushed back on arguments restricting the agency’s authority, arguing that doing so would prompt lawsuits against power providers.

Under the Biden administration, the EPA has indicated that it will not attempt to resurrect the Clean Power Plan, but rather create its own rules to regulate power plant emissions.

This is breaking news. Check back for updates.

China’s Shenzhen stocks rise as data shows factory activity grew in June; Asia stocks slip

• Chinese markets rose on Thursday as government data showed factory activity grew in June, but most other Asia-Pacific indexes fell.
• Japan’s industrial production plunged 7.2% in May, according to government data.
• In corporate news, Toyota Motor missed its monthly production target in May for the third month in a row, Reuters reported.

https://www.cnbc.com/2022/06/30/asia-markets-china-pmi-data-stocks-currencies-oil.html

OPEC+ sticks with planned oil production hike as supply concerns weigh on energy markets

• OPEC and non-OPEC partners, a group sometimes referred to as OPEC+, concluded a meeting via videoconference by deciding to stay the course with its production policy.
• It means the Middle East-dominated group will increase monthly overall production for the month of August to 648,000 barrels per day.
• OPEC+ said its next meeting would take place on August 3.

https://www.cnbc.com/2022/06/30/opec-sticks-with-planned-oil-production-hike-supply-concerns-linger.html

Fed’s preferred inflation measure rose 4.7% in May, around multi-decade highs

• Core personal consumption expenditures prices, excluding food and energy, rose 4.7% from a year ago, slightly less than expected.
• Headline inflation remained strong, rising 0.6% on the month and holding near the highest level since 1982.
• Disposable income and inflation-adjusted spending both declined on the month.
• Weekly jobless claims totaled 231,000, a slight decline from the previous period.

https://www.cnbc.com/2022/06/30/feds-preferred-inflation-measure-rose-4point7percent-in-may-near-40-year-high.html

Air Canada reducing summer flights as industry faces ‘unprecedented strains’ on travel operations

Air Canada, AC-T -2.29%decrease citing “unprecedented strains” on the airline industry from resurgent travel, says it is cancelling 154 flights per day in July and August, or 15 per cent of its schedule.

“Regrettably, things are not business as usual in our industry globally, and this is affecting our operations and our ability to serve you with our normal standards of care,” chief executive Michael Rousseau said in a message to customers Wednesday night.

“Despite detailed and careful planning, the largest and fastest scale of hiring in our history, as well as investments in aircraft and equipment, it is now clear that Air Canada’s operations too have been disrupted by the industry’s complex and unavoidable challenges.”

Mr. Rousseau’s customer message did not provide details on the reductions, but Air Canada gave specifics in a response to questions from The Globe and Mail.

Air Canada cancels almost 10 per cent of Toronto flights over seven days as staffing crunch, passenger surge hit Pearson airport

The airline said it is reducing its schedule, on average, by 77 round trips, or 154 flights, a day in total for July and August. Air Canada currently operates on average about 1,000 flights a day.

Three routes from Montreal to Pittsburgh, Baltimore and Kelowna will be temporarily suspended. Air Canada will also suspend its route from Toronto to Fort McMurray.

Most of the flights affected are to and from Toronto or Montreal, Air Canada said. “These will be mostly frequency reductions, affecting primarily evening and late-night flights by smaller aircraft, on transborder and domestic routes,” the airline said in an e-mailed statement. “Our international flights are unaffected, with a few timing changes to reduce flying at peak times and even out the customer flow.”

As travellers returned to the skies in 2022 after two years of the COVID-19 pandemic, the world’s airline infrastructure struggled to keep up. Travellers to Toronto’s Pearson airport have fared poorly, with massive line-ups at check-in, security and customs.

Air Canada cancelled more than 350 flights at Pearson in the first seven days of June – almost 10 per cent of its schedule – as staffing shortages and a surge in passengers beleaguered Canada’s busiest airport. WestJet and Air Transat also had delays and cancellations at Pearson. Airports in Calgary, Montreal and Vancouver experienced bottlenecks, but not to the extent of Pearson.

In his customer message, Mr. Rousseau described “flight cancellations and customer service shortfalls on our part that we would never have intended for our customers or for our employees, and for which we sincerely apologize.”

“This was not an easy decision, as it will result in additional flight cancellations that will hav

ive impact on some customers. But doing this in advance allows affected customers to take time to make other arrangements in an orderly manner, rather than have their travel disrupted shortly before or during their journey, with few alternatives available. It will also enable us to more reliably serve all customers.”

Shortly after the e-mail went out, Air Canada said its website was ”currently experiencing technical issues that may prevent you from retrieving your booking online … We are working to resolve the issue as quickly as possible, and appreciate your patience.”

U.S. economy contracts in first quarter; outlook murky as unsold goods accumulate

The U.S. economy contracted slightly more than previously estimated in the first quarter as the trade deficit widened to a record high and a resurgence in COVID-19 infections curbed spending on services like recreation.

The Commerce Department’s third estimate of gross domestic product on Wednesday also showed some underlying softness in the economy, with consumer spending revised lower and inventories higher than reported last month.

This is a potential red flag for domestic demand and the economic outlook amid recession jitters as the Federal Reserve aggressively tightens monetary policy to tame inflation. Fed Chair Jerome Powell told a European Central Bank conference on Wednesday that “there is a risk” the U.S. central bank could slow the economy more than needed to control inflation.

“The biggest effect from this report is that it leaves inventories in a more overbuilt position than previously thought, putting second-quarter GDP into negative territory pending what tomorrow’s data reveal about May consumption and consumer inflation and April revisions to the same,” said Chris Low, chief economist at FHN Financial in New York.

Gross domestic product fell at a 1.6% annualized rate last quarter, revised down from the 1.5% pace of decline reported last month. That was the first drop in GDP since the short and sharp pandemic recession nearly two years ago. Trade subtracted an unrevised 3.23 percentage points from GDP.

Economists polled by Reuters had forecast the pace of contraction would be unrevised at a 1.5% rate.

The economy was initially estimated to have contracted at a 1.4% rate. It grew at a robust 6.9% pace in the fourth quarter. GDP was 2.7% above its level in the fourth quarter of 2019.

Consumer spending, which accounts for more than two-thirds of the economy, grew at a 1.8% rate instead of the 3.1% pace reported last month. The downgrade reflected revisions to services, now estimated to have increased at a 3.0% rate instead of the previously reported 4.8% pace.

Spending on recreation, financial services and insurance as well as healthcare was downgraded. Outlays on goods meant to last three years or more increased at a 5.9% pace, slashed from the previously reported 6.8% rate. That reflected downgrades to motor vehicles and recreational goods spending.

Stocks on Wall Street were mostly lower. The dollar rose against a basket of currencies. U.S. Treasury yields fell.

INVENTORIES PILING UP

The moderate pace of spending left inventories significantly higher than estimated in May. Business inventories increased at a $188.5 billion rate, rather than the $149.6 billon pace reported last month. The accumulation was in the retail sector, mostly in general merchandise stores.

Major retailers like Walmart and Target have reported they are carrying too much merchandise.

Slower consumer spending was partially offset by stronger business investment in equipment, whose growth pace was raised to 14.1% from 13.2%. As a result, growth in final sales to private domestic purchasers, which excludes trade, inventories and government spending, was cut to a 3.0% rate last quarter.

This measure of domestic demand was previously reported to have risen at a 3.9% rate.

Revisions to corporate profits were minor. The saving rate was unrevised at 5.6%. The increase in personal income was little changed from May’s estimate.

But interest on assets was trimmed. That led to the rise in gross domestic income (GDI), an alternative measure of economic growth, being pared to a 1.8% rate from the 2.1% pace estimated last month. GDI advanced at a 6.3% rate in the fourth quarter.

The economy appears to have rebounded from the first-quarter slump, with consumer spending accelerating in April. Business spending on equipment remained solid through May, while the goods trade deficit narrowed significantly as exports hit a record high. But the bounce is losing momentum because of the Fed’s aggressive posture.

The U.S. central bank this month raised its policy rate by three-quarters of a percentage point, its biggest hike since 1994. The Fed has increased its benchmark overnight interest rate by 150 basis points since March.

Retail sales fell in May, while housing starts and building permits declined. Consumer confidence hit a 16-month low in June. May’s consumer spending report on Thursday could shed more light on second-quarter growth prospects, which range from as low as a 0.3% rate to as high as a 2.9% pace.

“It is extremely unlikely the economy is in recession now, however, despite the decline in first-quarter GDP and apparent weakness in output growth in the current quarter,” said Scott Hoyt, a senior economist at Moody’s Analytics in West Chester, Pennsylvania. “Job growth remains strong, investment is growing, both households and business have strong balance sheets.”