(Alliance News) - The following is a summary of top news stories Wednesday.
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COMPANIES
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Inditex reported continued double-digit revenue growth in the third quarter after it swung to profit in the first six month of its current financial year. The clothing retailer made revenue of EUR11.94 billion for the six months to July 31, representing growth of 49% year-on-year, or 53% growth in local currencies. Net profit amounted to EUR1.27 billion, compared with a loss of EUR195 million in the first half of financial 2020. Inditex said first-half earnings were "robust" despite trading hours being down by 15% due to closures, limitations and capacity restrictions across the company's various markets and specific locations due to the pandemic. Online sales, meanwhile, continued to grow, reaching 36% above the prior year's levels and more than doubling from pre-pandemic figures. Online sales are expected to account for more than 25% of total sales in full year. Arteixo, Spain-based Inditex is a fashion retail group consisting of the Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, and Uterque brands.
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JP Morgan has been appointed by the UK government to provide advice on Channel 4's future following a consultation into the possible privatisation of the public broadcaster. UK Culture Secretary Oliver Dowden is understood to have approved the US investment bank to provide corporate finance advice on the broadcaster's remit, ownership and obligations, PA reported. The appointment has not been officially confirmed by the Department for Digital, Culture, Media & Sport, but an announcement is expected on Wednesday. The broadcaster, founded in 1982, currently is owned by the government and receives its funding from advertising. But ministers launched a consultation into a potential change in ownership of the channel in July.
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Apple has unveiled the iPhone 13 range, which will come with bigger batteries and better cameras, and boss Tim Cook hailed them as the "best iPhones we have ever created". After a major redesign of the smartphone last year, Apple has instead made a series of incremental changes across the four versions of the handset, most notably improving battery life by at least 1.5 hours on each of the devices. The technology giant said it had also revamped all the cameras across the range, with a new cinematic mode allowing users to film higher-quality, cinema-like videos, while the infamous camera notch on the front of the phone has been made smaller. Like the iPhone 12 range last year, the four new devices on offer will be the iPhone 13, iPhone 13 mini, iPhone 13 Pro and iPhone 13 Pro Max, all of which will be powered by the firm's latest A15 Bionic chip, which Apple claims is 50% faster than its nearest competition.
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The US highway safety watchdog asked 12 automakers Tuesday to provide data on their driver assistance systems as part of a preliminary investigation of Tesla, whose cars were involved in several accidents with first responder vehicles. The National Highway Traffic & Safety Administration seeks to conduct a benchmark analysis of vehicles whose models have the ability, under certain circumstances, to automatically control both the steering and the breaking or acceleration. NHTSA sent letters to BMW, Ford, General Motors, Honda, Hyundai, Kia, Mercedes-Benz, Nissan, Stellantis, Subaru, Toyota and Volkswagen. The agency began its probe in August after documenting 11 accidents since early 2018 involving a Tesla car and emergency vehicles including police cruisers. The incidents included one fatal crash and seven that resulted in injuries to a total of 17 people, according to the NHTSA.
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British American Tobacco paid a bribe to the former Zimbabwean leader Robert Mugabe and has also paid bribes in South Africa, the BBC reported on Monday. The BBC also said BAT has used illegal surveillance to damage rivals. In a joint investigation with the Bureau of Investigative Journalism and the University of Bath, the BBC obtained thousands of leaked documents which showed how BAT funded a network of almost 200 secret informants in southern Africa. Most of the work was outsourced to a South African private security company called Forensic Security Services, the BBC said.
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MARKETS
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Asian and European stock markets traded mostly lower on Wednesday amid a series of concerning inflation readings from the UK, France and Italy, but Wall Street was called higher after US price pressure was shown to be cooling off, in figures released on Tuesday.
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CAC 40: down 0.2% at 6,639.58
DAX 30: marginally lower, down 3.83 points at 15,719.16
FTSE 100: up 0.1% at 7,037.64
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Hang Seng: closed down 1.8% at 25,033.21
Nikkei 225: closed down 0.5% at 30,511.71
S&P/ASX 200: closed down 0.3% at 7,417.00
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DJIA: called up 0.2%
S&P 500: called up 0.3%
Nasdaq Composite: called up 0.3%
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EUR: flat at USD1.1824 (USD1.1821)
GBP: down at USD1.3832 (USD1.3845)
USD: down at JPY109.36 (JPY109.65)
Gold: down at USD1,799.78 per ounce (USD1,807.10)
Oil (Brent): up at USD74.18 a barrel (USD73.74)
(currency and commodities changes since previous London equities close)
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ECONOMICS AND GENERAL
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The EU will not repeat the mistake of the 2007-2008 financial crisis by imposing sudden budgetary austerity as it emerges from the Covid-19 pandemic, the bloc's chief said. Noting that last time it took the EU eight years to get back to pre-crisis levels, Ursula von der Leyen told the European Parliament in her annual State of the EU address: "We will not repeat that mistake." She called the financial crisis "a cautionary tale" in which "Europe declared victory too soon and we paid the price for that".
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UK consumer price growth increased in August, showing the quickest acceleration since records began in 1997. The UK annual inflation rate jumped to 3.2% in August from 2.0% in July. According to consensus cited by FXStreet, a smaller increase to 2.9% was expected. On a monthly basis, consumer prices rose 0.7% in August, having been flat in July. Office for National Statistics analyst Jonathan Athow commented: "Much of this is likely to be temporary as last year restaurant and cafe prices fell substantially due to the 'Eat Out to Help Out' scheme, while this year, prices rose."
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Separate data showed producer price growth in the UK also topped market expectations. Output producer price inflation accelerated to 5.9% in August from 5.1% in July. A less steep climb to 5.4% was expected, according to FXStreet.
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UK house prices took a step back in July, after hitting a record high a month earlier, numbers from the ONS showed. The average UK house price increased by 8.0% in July from a year before, slowing from June's 13% annual surge. On a monthly basis, prices fell by 3.7% to GBP255,535 from the GBP265,000 record set in June. This moderation in price pressure was in line with the tapering of the UK government's stamp duty incentive.
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Consumer prices in France increased in August, figures from Insee showed. The consumer price index rose by 0.6% in August from July, after 0.1% month-on-month growth in July. Insee noted that the prices of manufactured goods rebounded sharply in August amid the end of summer sales. The prices of food also accelerated, while tobacco prices were stable after a decrease in July. Year-on-year, consumer prices grew by 1.9% in August, after rising by 1.2% in July. The harmonised index of consumer prices rose by 0.7% in August from July. Year-on-year, it increased by 2.4%.
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Italy's inflation rate accelerated by less than initially estimated in August, data from national statistics office Istat showed on Wednesday, but still accelerated on the prior month. Consumer prices in Italy rose by 2.0% on an annual basis in August after growing by 1.9% in July. The preliminary estimate was for a 2.1% increase. Month-on-month, inflation slowed its growth pace to 0.4% in August from 0.5% in the prior month, with analysts estimated an unchanged figure of 0.5% for August. The harmonized index of consumer prices showed an increase of 2.5% on an annual basis in August from the 1.0% gain in July while the preliminary estimate was for an increase of 2.6%.
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The French government faces a stand-off with tens of thousands of health workers and carers Wednesday over a new rule requiring them to receive a Covid-19 vaccine or face suspension without pay. Starting Wednesday, hospital staff, ambulance drivers, retirement home workers, private doctors, fire service members and people caring for the elderly or infirm in their homes – some 2.7 million people in total – must be able to prove they have had at least one shot of a vaccine. President Emmanuel Macron issued the ultimatum two months ago, but tens of thousands of carers remain unvaccinated.
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Growth in China's retail sales slowed to a 12-month low in August, data showed, as parts of the country were hit by lockdowns and other measures to fight the worst Covid outbreak since its initial spread in 2020. Retail sales grew 2.5% last month, well short of the 7% forecast and sharply down from the 8.5% witnessed in July. The reading was the lowest since August 2020. Industrial production growth was also slightly below expectations and slower than the month before. The data comes after a string of figures indicating the recovery enjoyed last year and at the start of 2021 by the world's second largest economy was petering out.
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Republican leaders in Congress on Tuesday continued to withhold support for efforts by the Democratic majority to increase the US debt ceiling. Treasury Secretary Janet Yellen warned last week that the US government will run out of money next month unless lawmakers take action, and banking groups have urged Congress to move to prevent "irreparable harm" to the US economy. The Securities Industry & Financial Markets Association, American Bankers Association and other industry groups said in a letter to congressional leaders that defaulting "on our existing obligations would be irresponsible and do irreparable harm to the US economy and taxpayers." But Republican Senate Minority Leader Mitch McConnell said Democrats will have to resolve the issue on their own. "The Democratic leaders have every tool and procedure they need to handle the debt limit on a partisan basis, just like they are choosing to handle everything else," McConnell said on the Senate floor. Congress is currently considering a USD1.2 trillion infrastructure plan that has the backing of Democrats and some Republicans. Also on their agenda is a massive social spending plan costing USD3.5 trillion over 10 years, which has only garnered the support of Democrats.
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Californians voted overwhelmingly to keep their Democratic governor, roundly rejecting a Republican attempt to unseat him in a special recall vote spurred by mask mandates and Covid lockdowns. Gavin Newsom handily survived a confidence vote that could have seen him replaced by a Republican with only minority support in one of the most liberal parts of the US. With more than 60% of the votes tallied, NBC, CNN and Fox News said Newsom was set to prevail, with two thirds voting against the effort. "'No' is not the only thing that was expressed tonight," a triumphant Newsom said moments after the race was called. "I want to focus on what we said yes to, as a state. We said yes to science, we said yes to vaccines. We said yes to ending this pandemic." Newsom acted quickly as the pandemic took hold of California, ordering people to stay home and shuttering schools, in moves praised by scientists. But entrepreneurs blamed him for suffocating their businesses, and parents chaffed at keeping their children home.
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The latest coronavirus wave in the US driven by the Delta variant could soon peak, but experts warn against complacency and expect the virus will be part of everyday life for years to come. The seven-day-average of daily cases as of Monday was 172,000, its highest level of this surge even as the growth rate is slowing and cases are headed down in most states, according to data compiled by the Covid Act Now tracker. But more than 1,800 people are still dying a day, and over 100,000 remain hospitalized with severe Covid – a grim reminder of the challenges authorities have faced in getting enough Americans vaccinated in the face of misinformation and a polarized political climate. Bhakti Hansoti, an associate professor in emergency medicine at John Hopkins University and expert in Covid critical care told AFP she saw the US following a similar trajectory to India. Countries in western Europe have also seen similar downturns in their Delta surges.
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By Tom Waite; thomaslwaite@alliancenews.com
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