(Alliance News) - The following is a summary of top news stories Friday.
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COMPANIES
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Airbus has taken the extraordinary step of cancelling an order of 50 planes from Qatar Airways, a major customer, in an escalating feud over the airline's grounding of A350 aircraft. The Qatari company, one of the Gulf region's "big three" carriers, has grounded part of its A350 fleet over degradation of exterior fuselage surfaces. The airline has taken the dispute to the High Court in London and stopped accepting further deliveries of the wide-body aircraft from the European firm until the problem is resolved. An Airbus spokesman told AFP on Friday that the aircraft maker has "terminated" a contract with Qatar Airways for 50 single-aisle A321neo aircraft, "in accordance with our rights". The order was worth USD6 billion at catalogue prices, though airlines are usually charged less for large purchases.
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French oil giant TotalEnergies said it would withdraw from Myanmar over "worsening" human rights abuses since last year's coup, depriving the country's military of a major revenue source. The firm has faced pressure to cut financial links with the junta since the army seized power from a civilian government in February 2021. TotalEnergies will withdraw from its Yadana gas field in the Andaman Sea, which provides electricity to the local Burmese and Thai population, six months at the latest after the expiry of its contractual period. US oil major Chevron also said it will pull out from Myanmar in a statement on Friday, shortly after TotalEnergies announced its own withdrawal. "In light of circumstances in Myanmar, we (will) enable a planned and orderly transition that will lead to an exit from the country," Chevron spokesman Cameron Van Ast said in the statement.
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Netflix late Thursday hailed content like Squid Game for aiding the streaming services platform's popularity, though rising competition and slowing subscriber growth took the gloss off a strong end to 2021. For the three months to December 31, revenue rose to USD7.71 billion from USD6.64 billion in the fourth quarter of 2020. Fourth quarter net income was USD607 million, or USD1.33 per diluted share, rising from USD542 million, or USD1.19 diluted earnings per share, the year before. The Los Gatos, California-based firm added 8.28 million global paid net subscribers in the fourth quarter, down from 8.51 million in the corresponding period a year earlier. Global streaming paid memberships rose to 221.8 million from 203.7 million. Looking ahead, Netflix said for the first quarter of 2022, it expects to add 2.5 million subscribers, down from the 3.98 million it added at the same time in 2021.
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Playtech noted an announcement by JKO Play which confirmed it does not intend to make an offer to acquire the London-listed company. The confirmation comes before the put-up-or-shut-up date of January 26 - the latest date by which JKO Play had to clarify its position to the Douglas, Isle of Man-based gambling software company - set by the UK Takeover Panel. Playtech had previously agreed to be acquired by Aristocrat Leisure Ltd in mid-October, but delayed the vote from January 12 to February 2 to give JKO more time to prepare an offer. The board of the gambling company continues to recommend that shareholders vote to accept the offer from Sydney-listed Aristocrat, worth GBP2.1 billion at 680 pence per share. It is to date the only "firm" offer Playtech has received, noted previously by Aristocrat.
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Amazon.com's Alexa virtual assistant is down in the UK, leaving users unable to access smart speakers and other devices. According to service status website DownDector, UK users began reporting problems with Alexa at around 7am on Friday, with more than 8,000 reports since recorded. Many users are reporting being unable to wake their voice-activated Amazon Echo smart devices, with some seeing a ring of red lights and a message to try again later. Others have taken to social media to complain of being unable to wake or access their Alexa-powered devices. The virtual assistant is built into millions of devices available in the UK, including smart speakers and home hubs, which can be used to control appliances around the home.
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Alphabet's Google on Thursday appealed an EU court decision to uphold the bloc's EUR2.4 billion fine for abusing its search engine dominance. The tech giant said it would go to the European Court of Justice, the EU's highest court, after the General Court confirmed in November a decision by the European Commission in 2017. At the time, the fine was the EU's biggest ever. But it was later exceeded by a EUR4.3 billion fine against Google over its Android smartphone operating system. "After careful consideration, we have decided to appeal the General Court's decision because we feel there are areas that require legal clarification from the European Court of Justice," a short statement by the company said.
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Intel Corp announced plans to invest USD20 billion in the construction of two new factories in Ohio, US. The California-based computer chipmaker said the investment will help boost production to meet the surging demand for advanced semiconductors. "Today's investment marks another significant way Intel is leading the effort to restore US semiconductor manufacturing leadership," said Pat Gelsinger, chief executive of Intel. "Intel's actions will help build a more resilient supply chain and ensure reliable access to advanced semiconductors for years to come. Intel is bringing leading capability and capacity back to the US to strengthen the global semiconductor industry."
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Restaurant Group said full-year profit will be in the top end of its previous guidance range, but the dining chain operator remains cautious over Covid restrictions. Restaurant Group had originally expected adjusted earnings before interest, tax, depreciation and amortisation in a range of GBP73 to GBP79 million for 2021 and a net debt of less than GBP190 million. The London-based pub and restaurant owner, which owns brands such as Wagamama and Frankie & Benny's, now expects that its 2021 adjusted Ebitda will be at the top end of the range and year-end net debt will be less than GBP180 million. The company cited good cost control and continued strong trading relative to the market for the improved expectations.
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MARKETS
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European markets were awash with red on Friday after Wall Street gave up early gains on Thursday to finish sharply lower once again. Wall Street is on track for a mixed start on Friday, with the Dow Jones poised to recover a touch but the tech-heavy Nasdaq Composite seen sliding further following a disappointing subscriber growth outlook from video streaming platform Netflix. Netflix shares were down 20% pre-market. "The pandemic essentially brought forward a lot of subscriber growth, so Netflix must now face the reality that earnings growth is becoming more dependent on regularly raising prices, not simply hoovering up millions of more subscribers every month," said Danni Hewson, financial analyst at AJ Bell.
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CAC 40: down 1.2% at 7,110.96
DAX 40: down 1.3% at 15,704.20
FTSE 100: down 0.8% at 7,527.68
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Hang Seng: closed up 0.1% at 24,965.55
Nikkei 225: closed down 0.9% at 27,522.26
S&P/ASX 200: closed down 2.3% at 7,175.80
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DJIA: called up 0.2%
S&P 500: called flat
Nasdaq Composite: called down 0.3%
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EUR: down at USD1.1338 (USD1.1359)
GBP: down at USD1.3569 (USD1.3657)
USD: down at JPY113.89 (JPY114.00)
GOLD: down at USD1,834.20 per ounce (USD1,845.00)
OIL (Brent): down at USD87.08 a barrel (USD88.67)
(currency and commodities changes since previous London equities close)
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ECONOMICS AND GENERAL
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UK retail sales in December saw the largest monthly fall since January last year as non-food store sales sunk, figures from the Office for National Statistics showed. UK retail sales fell 3.7% in December month-on-month with the decline driven by non-food store sales which fell 7.1%. Retailers reported that Omicron hit footfall last month. Automotive fuel sales volumes fell by 4.7% as work from home guidance led to reduced travel. "After strong pre-Christmas trading in November, retail sales fell across the board in December, with feedback from retailers suggesting Omicron impacted on footfall," said Heather Bovill, ONS deputy director for Surveys & Economic Indicators. "As Plan B restrictions in England meant more people working from home, there was a notable fall for fuel sales. However, despite the fall in December, retail sales are still stronger than before the pandemic."
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The UK business secretary has said households will need to wait until March to find out if a scheme reportedly under consideration to hand out GBP500 one-off payments to help with energy bills will go ahead. It has been reported that the Chancellor Rishi Sunak is considering making direct payments of up to GBP500 to struggling families as the cost of energy bills are set to soar. But Kwasi Kwarteng said the government was "trying to work out the best way to deal with what is a really, really serious problem". Emma Pinchbeck, chief executive of Energy UK, the trade body for suppliers, has said bills could increase again in October after a predicted 50% jump for millions of households in the spring. The Social Market Foundation think tank has proposed cash payments of up to GBP500 would be the best answer to the cost-of-living crisis.
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Japan's core consumer prices edged up year-on-year in December for the fourth month running, buoyed partly by higher energy prices, government data showed. The core consumer price index, which excludes volatile fresh food prices but includes fuel costs, was up 0.5% in December, following similar rises from September to November. The advance follows 18 months of declines or stagnation during the depths of the pandemic, but fell slightly short of economist expectations for a 0.6% rise. And excluding fuel costs, prices were down 0.7% from a year earlier, according to the figures from the internal affairs ministry. For the whole of 2021, consumer prices were down 0.2%.
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The White House launched a charm offensive, complete with a Tom Hanks video, to mark US President Joe Biden's first year in the position on Thursday, but dire new polls and a major congressional setback told another story. Biden, who was sworn in to replace Donald Trump at noon last January 20, marked the day by meeting with top cabinet members in charge of rolling out his signature infrastructure spending plan, a USD1.2 trillion splurge he got passed in November with rare bipartisan support. "Our nation has never fully made this kind of investment," Biden said, celebrating one of his biggest wins of last year – and a project that should keep delivering good news as bridges, roads and other large public works roll out. The previous evening, the 79-year-old Democrat held an epic press conference lasting an hour and 52 minutes, longer even than the famously rambling events Trump used to stage.
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US Secretary of State Antony Blinken will try to defuse a crisis with Moscow over Ukraine when he meets with Russian Foreign Minister Sergei Lavrov in Geneva on Friday. Blinken's talks in the Swiss city follow a frenzied round of shuttle diplomacy in Europe as fears mount over Russia's build-up of forces along Ukraine's borders. He was already in Kiev and Berlin this week. While the US and its Western allies are demanding a pull-back of the Russian troops, Moscow is demanding certain security guarantees and an end to the eastward expansion of the NATO military alliance. Russia further objects to US military assistance to Ukraine, where a conflict has simmered in the east between Russian-backed separatists and Ukrainian forces since 2014. "All we're trying to do is to make sure to the best of our ability that ... Ukraine has the means to defend itself and that might perhaps deter further aggression by Russia," Blinken said Thursday.
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By Lucy Heming; lucyheming@alliancenews.com
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