(Alliance News) - The following is a summary of top news stories Friday.
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COMPANIES
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Federal prosecutors are preparing to indict a former Boeing test pilot suspected of misleading aviation regulators over the safety issues blamed for two fatal 737 MAX crashes, the Wall Street Journal reported. Mark Forkner was the lead contact between the aviation giant and the US' Federal Aviation Administration over how pilots should be trained to fly the planes, the Journal said. According to documents published in early 2020, Forkner withheld details about the planes' faulty flight handling system known as the Maneuvering Characteristics Augmentation System, or MCAS – later blamed for both crashes – from regulators. The 737 MAX was formally certified in March 2017, but was grounded worldwide for 20 months following two crashes in October 2018 and March 2019 that killed 346 people.
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BP said it will team with Abu Dhabi National Oil and Masdar to invest in clean and low carbon energy, creating potentially thousands of energy jobs. Masdar, also known as the Abu Dhabi Future Energy, is a renewable energy company based in Abu Dhabi. BP said the first agreement would see the trio collaborate to initially develop 2 gigawatts of low carbon hydrogen across hubs in the UK and UAE, with the intention to expand as the project progresses. "Access to clean hydrogen - a critical fuel in the decarbonization of hard-to-abate industries - can reduce emissions, enable new, low carbon products, and unlock future fuels," the UK oil major explained.
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Panasonic completed the acquisition of Blue Yonder, an end-to-end, digital fulfilment platform provider. Osaka, Japan-based Panasonic purchased the remaining 80% of the shares of Blue Yonder, adding to the 20% which it acquired in July 2020. The investment values Blue Yonder at USD8.5 billion. The Blue Yonder brand will be retained and the business will function within Panasonic Connected Solutions. Blue Yonder Chief Executive Girish Rishi and the entire leadership team will remain with the company, Panasonic said.
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MARKETS
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European shares started Friday higher, and Paris and Frankfurt remained in positive territory at midday, but the FTSE 100 had moved lower and Wall Street was called for negative open. With decisions by three major central bank decisions due next week, rising consumer price inflation remained a concern for investors, particular after the eurozone rate joined the UK's in the 3% range.
"In one line: hot, and likely to get hotter still," Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics, said of the August reading of 3.0%, up from 2.2% in July. "This path is consistent with the ECB's and consensus forecasts, but we now suspect that inflation in the first half of next year could end up uncomfortably high for the central bank and markets."
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CAC 40: up 0.5% at 6,653.03
DAX 30: up 0.1% at 15,669.98
FTSE 100: down 0.1% at 7,023.02
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Hang Seng: closed up 1.0% at 24,920.76
Nikkei 225: closed up 0.6% at 30,500.05
S&P/ASX 200: closed down 0.8% at 7,403.70
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DJIA: called down 0.1%
S&P 500: called down 0.2%
Nasdaq Composite: called down 0.2%
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EUR: up at USD1.1775 (USD1.1762)
GBP: up at USD1.3798 (USD1.3765)
USD: up at JPY109.98 (JPY109.65)
GOLD: up at USD1,765.54 per ounce (USD1,756.55)
OIL (Brent): up at USD75.28 a barrel (USD75.00)
(currency and commodities changes since previous London equities close)
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ECONOMICS AND GENERAL
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Consumer price inflation in the euro area accelerated in August, figures from the statistical office Eurostat showed. The eurozone annual inflation rate was 3.0% in August, picking up pace from 2.2% in July. A year earlier, consumer prices fell by 0.2%. In the EU as a whole, the annual inflation was 3.2% in August, up from 2.5% in July. A year earlier, the rate was 0.4%.
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The current account of the euro area recorded a surplus of EUR22 billion in July, unchanged from the previous month, figures from Eurostat showed. Surpluses were recorded for goods, services and primary income. These were partly offset by a deficit for secondary income, the data showed. In the 12 months to July, the current account recorded a surplus of EUR320 billion, up 38% from a surplus of EUR232 billion for the 12 months to July 2020.
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UK retail sales declined in August from the month before, with more consumers going out as lockdown measures have eased, hurting the grocery sector. Retail sales declined 0.9% in August from July, confounding expectations of 0.5% growth, according to market consensus cited by FXStreet. It was a second straight month of lower sales. In July, they had declined 2.5% from June. "Food store sales volumes fell by 1.2% in August 2021, with some evidence to suggest that the further easing of hospitality restrictions had an impact on sales; people increased their social spending such as eating and drinking at restaurants and bars," the Office for National Statistics said. Annually, retail sales were flat, missing expectations of 2.7% growth. Retail sales had risen 2.4% annually in July. August's retail sales were, however, 4.6% above pre-virus levels. The proportion of online sales improved to 28% in August, up from 27% in July and 20% before the onset of the pandemic.
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UK consumers expect inflation to stay firmly above the Bank of England's 2.0% target over the coming years, survey results showed. The inflation rate will sit at 3.0% in five years time, according to a median response from August's Bank of England/Kantar inflation attitudes survey. In the May survey, the median prediction was 2.7%. The survey was conducted between August 10 and 16, so before official data on Wednesday revealed UK inflation accelerated last month. The UK annual inflation rate jumped to 3.2% in August from 2.0% in July, the Office for National Statistics said.
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UK Prime Minister Boris Johnson has given his overhauled Cabinet a "half-time pep talk", urging them to unite to deliver for the nation, after carrying out a ruthless cull in his top team. In the first meeting of the new Cabinet on Friday, Johnson said it is time to "spit out the orange peel" and work together, having sacked three people who would otherwise have joined them around the table in Downing Street. Both demoted Justice Secretary Dominic Raab and his replacement as foreign secretary, Liz Truss, sat opposite Johnson amid reports they have both staked a claim to the Chevening grace-and-favour residence. With former education secretary Gavin Williamson among those sacked, the prime minister told the surviving Cabinet members they are all there on "merit" but it is time to redouble their efforts to deliver for the public.
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UK Cabinet ministers will be reviewing the current travel traffic light system and whether to scrap the requirement for foreign travellers to take PCR tests, the Environment Secretary said. George Eustice said that while no decisions have yet been taken on a potential shake-up of Covid travel rules that reportedly could make going abroad cheaper and simpler, the Covid Cabinet sub-committee is expected to meet on Friday to look at the current restrictions. The group is set to consider whether to merge the green and amber lists to form one category of low-risk countries while reducing the number of destinations on the red list. There is also speculation that minsters will agree that fully vaccinated arrivals will no longer need to take a pre-departure lateral flow test or a post-arrival PCR test. This would save travellers around GBP100 per trip. The Environment secretary told Sky News: "My understanding is that no decisions have actually been taken yet, although I understand there may be a meeting today to review this. We regularly review those travel restrictions."
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The campaign to become Japan's next prime minister kicked off on Friday, with four candidates vying for leadership of the ruling party in an unusually close race. In televised speeches, the candidates set out their priorities, from boosting Japan's digital prowess to addressing the falling birthrate. Among them are two women hoping to lead a country that has never had a female prime minister, although both are considered long shots. The race follows Prime Minister Yoshihide Suga's shock announcement that he would not run for head of the ruling Liberal Democratic Party. Whoever the party picks in a September 29 vote will contest a general election that has to be held by late November.
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Australia shrugged off Chinese anger over its decision to acquire US nuclear-powered submarines and vowed to defend the rule of law in airspace and waters where Beijing has staked multiple hotly contested claims. US President Joe Biden announced the new Australia-US-Britain defence alliance on Wednesday, extending US nuclear submarine technology to Australia as well as cyber defence, applied artificial intelligence and undersea capabilities. China's government described the alliance as an "extremely irresponsible" threat to regional stability, questioning Australia's commitment to nuclear non-proliferation and warning the Western allies that they risked "shooting themselves in the foot". China has its own "very substantive programme of nuclear submarine building", Australian Prime Minister Scott Morrison said Friday in an interview with radio station 2GB. "They have every right to take decisions in their national interests for their defence arrangements and of course so does Australia and all other countries," he said.
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US medical experts will meet Friday to debate and vote on the controversial question of giving out booster doses of Pfizer's Covid-19 vaccine to the general population. President Joe Biden's administration announced in August a plan to roll out third shots to everyone, not just the immune compromised already able to receive them, starting from September 20. But experts have since expressed reservations about whether they are required, amid concerns over global inequity, the greater need to vaccinate the unvaccinated, and possible increased risk of side effects. The skepticism extends to scientists at the US Food & Drug Administration, who struck a cautious tone in documents released ahead of Friday's meeting where an independent panel has been convened.
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By Tom Waite; thomaslwaite@alliancenews.com
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