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| Friday January 13 2017 |
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By Richard Fletcher
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Markets snap: The Nikkei ended the week on a positive note, closing up 0.8 per cent this morning at 19,287.28. The FTSE 100, which closed at 7,292.37 yesterday, is forecast to open 24 points higher when trading begins shortly. At 6.52am Brent crude was trading at $56.05 a barrel and the pound was trading at $1.216 against the dollar and at €1.144 against the euro. For the latest on the markets follow me on on Twitter: @fletcherr.
Good morning: China’s exports fell by a sharper-than-expected 6.1 per cent year-on-year in December, more than double economists’ forecasts, according to official data released overnight. Imports beat expectations slightly, growing 3.1 per cent on strong demand for commodities from coal to iron ore. For 2016 as a whole the world’s largest trading nation posted a gloomy 7.7 per cent fall in exports and a 5.5 per cent drop in imports. We’ll have a story shortly at thetimes.co.uk/business.
After yesterday’s deluge of trading statements there is a dearth of stock exchange announcements this morning. The highlight is a trading update from Mitchells & Butlers, which saw like-for-like sales growth of 4.7 per cent in the four weeks to January 7. “This is an encouraging performance, building on positive momentum from earlier in the year,” Phil Urban, the chief executive, said.
Earnings season gets under way in the US today with updates before the bell from three of America’s “big four” banks. JP Morgan, Bank of America and Wells Fargo. All three have benefited from the Trump rally, so expectations will be high.
Finally, if you have a moment check out our latest podcast. Alexandra Frean, Marcus Leroux and David Charter discuss why Davos is more than just an elitist talking shop; energy prices; and Trump Triggers, the app that could protect your investment portfolio after a tweet from the president-elect.
Please do keep sending me any thoughts or observations about the Times business coverage. Have a great weekend. I’ll be back in your inbox on Monday.
Richard
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| Richard Fletcher |
| Business Editor |
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Ten things you need to know
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1 The number of first-time buyers has hit a ten-year high of 335,750, up 7 per cent on the previous year. From the high point of 359,900 in 2007 the number dived to 192,300 in 2008, when the financial crisis struck. Those who made it on to the property ladder paid more than £32,000 on average as a deposit.
2 Company boards will become criminally liable if they fail to stop their staff committing fraud under proposals ministers are considering that would toughen laws to tackle corporate criminality including fraud, money laundering and false accounting in moves and bring Britain more in line with the tough approach to white collar crime in the United States.
3 More than 4,000 Jeep owners in the UK have been dragged into the emissions cheating scandal after the Environmental Protection Agency in the United States levelled charges against Fiat Chrysler.
4 Britain’s retail sector appears to have enjoyed a far better Christmas than expected despite fears that there would be blood on the high street from falling footfall, slower spending and rising prices in the wake of Brexit.
5 George Soros, the American investor known as the man who broke the Bank of England, is thought to have lost $1 billion since Donald Trump’s election betting that shares would tumble. The billionaire hedge fund manager, who backed Hillary Clinton, took bearish positions after Mr Trump was elected on November 8, according to a report, but US stock markets surged to record highs before the end of the year.
6 Barratt Developments, the country’s biggest housebuilder, said that completions of homes in London fell by more than half in the second half of last year as it dealt with a slowing property market in the capital.
7 Ambitious plans by technology companies to beam broadband from the sky have been dealt a further blow after it emerged that Alphabet, the company formerly known as Google, has scrapped its internet drone programme.
8 National Grid is to be spared a break-up after Ofgem reached a deal to create a new legally separate unit within the company to serve as the operator of Britain’s power system.
9 The first rise in underlying Christmas sales at Marks & Spencer in six years raised hopes that the turnaround of the struggling clothing business was on track under its new boss Steve Rowe.
10 The withdrawal of funds by one of its largest clients left Jupiter with a net outflow of money in the final quarter of last year, although the loss was not significant enough to prevent a year-on-year rise in assets under management.
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Read the full update
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Editor’s picks
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Praise where praise is due. And after 28 years at Marks & Spencer, Steve Rowe is starting to show a bit of promise, says Alistair Osborne. The South Londoner puts the improved M&S trading performance over an extended holiday period down to “better ranges, better availability and better prices”. This no-nonsense assessment from a chief executive who has been running the show only since April is a welcome change from the continental flourishes of his predecessor, Marc Bolland.
The human brain is a remarkable organ that has become the ultimate survival computer, declares Ed Conway. There is one flaw, though: it is not well suited to mathematics and that means economic predictions too. But, he argues, forecasts are about the least important thing economists do. Their real skill is not to look into the future, but to remind us of the complexity of the world. On that basis, we need them more now than ever before.
Sathnam Sanghera likes his regular morning routine. He readily admits that it takes time for him to be fully awake, ranting and at his desk. But after that he’s raring to go. Nevertheless, he set out to try the latest business fad currently sweeping the bedrooms of chief executives called “beditation”. He describes it as “lying in bed and letting the sounds and sensations of the morning wash over you”. He was so unconvinced that he turned the light out and went back to sleep.
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| Market Snap |
In London the FTSE 100 dipped in and out of negative territory for much of yesterday but held on to its nerve, with help from the miners, to close up 0.03 per cent, or 1.88 points, at 7,292.37, extending its positive run to 13 days. The broader FTSE 250 failed to match the mood of the senior index, finishing 90.61 points, or 0.5 per cent, lower at 18,303.50 with AO World the biggest faller, down 11.9 per cent at 162.30p, despite posting a positive trading update. More on yesterday’s market action here.
On Wall Street, US markets forgot all about setting records as traders waited for the fourth quarter earnings season and more detail on Donald Trump’s economic policy. The Dow Jones industrial average shed 63.28 points, or 0.3 per cent, to close at 19,891.00 while the S&P 500 fell 0.2 per cent, or 4.88 points, to 2,270.44. About 6.7 billion shares changed hands compared with the recent daily average of 6.5 billion.
Sterling slipped against the greenback and the single currency in London yesterday after it was announced that Theresa May would give a speech next week on her plans for leaving the European Union. The news immediately prompted fears that she would suggest that Britain will undertake a “hard Brexit”. Against the US dollar, the pound was 0.3 per cent lower at $1.217 and against the euro it fell 0.8 per cent to €1.144.
Oil prices rose more than 1.5 per cent yesterday on confirmation that Saudi Arabia and Russia, the world’s largest producers, were cutting output and the predictions of record demand from China this year. In New York, Brent crude for March settlement was 1.8 per cent higher at $56.11 a barrel.
The headhunter Hays has experienced an inevitable slowdown in its UK business, about a quarter of the total, as employers become more cautious over hiring staff because of the uncertainty over Brexit. Tempus looks at how big a deal this is for the country’s largest recruitment specialist. Booker has a reputation for reliability, although this does not come cheap. Jupiter surprised the market with an unexpected outflow of funds, mainly by one client, in the last quarter of 2016. Read on here for more about the Tempus share tips of the day.
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Read the full story
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The day’s front pages
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The Times
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Britain’s retail sector appears to have enjoyed a far better Christmas than expected despite fears that there would be blood on the high street from falling footfall, slower spending and rising prices after Brexit. Yesterday investors were flooded with more than a dozen festive trading statements from retailers, including some of the country’s largest FTSE 100 operators.
George Soros, the American investor known as the man who broke the Bank of England, is thought to have lost $1 billion since Donald Trump’s election betting that shares would tumble. The billionaire hedge fund manager, who backed Hillary Clinton, took bearish positions after Mr Trump was elected on November 8, according to a report, but the US stock markets surged to record highs before the end of the year.
The country's biggest housebuilder said that completions of homes in London fell by more than half in the second half of last year as it dealt with a slowing property market in the capital. Barratt Developments completed 367 houses and apartments in the six months to the end of December in London, compared with 842 in the same period the previous year. It said that it was selling London homes in bulk deals to investors to cope with a fall in demand.
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Read the full update
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The Wall Street Journal
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US environmental regulators accused Fiat Chrysler Automobiles of using software that allowed illegal emissions in diesel-powered vehicles, the latest broadside in an unprecedented government crackdown on carmakers for alleged pollution transgressions. The Environmental Protection Agency, days before the end of the Obama administration, delivered a violation notice to Fiat Chrysler accusing it of using illegal software that allowed 104,000 recent diesel-powered Jeep Grand Cherokee sport utilities and Ram pickup trucks to spew emissions beyond legal limits.
The Justice Department’s inspector-general announced that he would investigate how the Federal Bureau of Investigation’s top two leaders handled an investigation into Hillary Clinton’s use of a private email server, to see if the FBI or the Justice Department failed to follow their own policies and procedures.
Apple is planning to build a significant new business in original television shows and films, according to people familiar with the matter, a move that could make the company a bigger competitor in Hollywood and offset slowing sales of iPhones and iPads.
McDonald’s is inviting bids for a significant stake in its Japan unit, according to people familiar with the situation, days after it reached a deal to sell its China and Hong Kong franchises.
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Read the full update
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Financial Times
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A Financial Times investigation has revealed how China has become a marine superpower. Since the start of the decade it has spent $45 billion to expand its ports and shipping network and to secure shipping lanes. Its ships now carry more cargo than those of any other nation. It has the largest maritime law enforcement fleet, the fastest growing navy and a vast fishing armada.
An independent review backing tidal power schemes has said that they would prove more cost effective over 60 years than offshore wind or nuclear power. The review concluded that a proposed 320-megawatt tidal lagoon project in Swansea Bay would be subsidy-free after half its 120-year lifespan.
Marks and Spencer revealed the first signs of growth in its clothing business in nearly two years, defying analysts’ expectations of a further decline. Half a dozen other UK retailers, including Tesco, Debenhams, Asos and JD Sports, also unveiled upbeat sales figures yesterday.
Amazon plans to create more than 100,000 jobs in the US over the next 18 months, making it the latest company to deliver jobs and investment announcements before Donald Trump’s inauguration next week.
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Read the full update
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The Daily Telegraph
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British companies across all sectors will remain resilient after the country leaves the European Union, even if the UK heads for a "hard Brexit", according to Fitch. Officials at the rating agency said businesses would cope even if Britain did not secure a transition deal with Brussels and fell back on World Trade Organisation rules for trade with its former EU partners.
The John Lewis Partnership has warned that it will cut its much-celebrated staff bonus this year in order to brace itself for the impact of a weaker pound and ramp in investment in its online operations in the wake of rapidly changing shopping habits.
The executive hired by The Guardian to build up its American business has stepped down after two and a half years in the job, amid deep cost cuts and missed revenue targets.
National Grid has sidestepped a major corporate dismantling by the energy regulator in favour of an arm's length separation of its dual roles in the energy system.
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Read the full update
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richard.fletcher@thetimes.co.uk
@fletcherr
