Biden delivers blow to UK’s hopes of US trade deal

Liam Roche
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Biden delivers blow to UK’s hopes of US trade deal

UK could now seek alternative arrangement

Britain’s hopes of a post-Brexit trade agreement with America seem to have disappeared after news emerged that Joe Biden and Boris Johnson held talks on the matter.

It is an issue which has been highlighted as a key selling-point of Brexit by Johnson, as it would have represented Britain’s new found freedom from the EU.

However, sources close to talks now seem to think there is little prospect of a deal, especially as Biden has other priorities.

Having been asked for un update on the matter, Johnson said, “we’re going as fast as we can”, although he did not confirm whether a deal would be in place or not before 2024.

Reports now suggest that the UK is looking at alternative options, including joining the US-Canada-Mexico trade deal instead of striking a bilateral agreement with Washington.

A senior government source said: “There are a variety of different ways to do this. The question is whether the US administration is ready. The ball is in the US’s court. It takes two to tango.”

Biden also made his views clear on ensuring peace in Northern Ireland is not in doubt as a result of post-Brexit tensions.

“I feel very strongly,” he said. “We spent an enormous amount of time and effort in the United States. It was a major partisan effort, and I would not like to see – nor would many of my Republican colleagues – a change in the Irish accord”.

Markets pick up on Wednesday

Liam Roche
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Markets pick up on Wednesday

The FTSE 100 was up 0.9% to 7,042 and China’s SSE index jumped back to life after markets were closed for a few days’ holiday. The SSE advanced 0.4%.

“A lot can change in a week on the markets,” says Russ Mould, investment director at AJ Bell. “Having seen some very bad days for equities in recent sessions, Europe and parts of Asia were more upbeat on Wednesday.”

So, what’s changed to make investors more confident?

“One key event is China’s troubled property developer Evergrande striking a deal over a bond repayment, thereby bringing a sense of relief to markets we might not see the business collapse – something that could cause ripples in multiple markets,” says Mould.

“Evergrande still has plenty of problems to fix including more bond payments later this week, but today’s deal would suggest catastrophe is not immediately around the corner.”

“We also have the Federal Reserve issuing a policy statement later today and speculation is growing that we won’t get the dreaded tapering announcement at this event. That would be a massive relief to investors and could give further support to markets.”

FTSE 1OO Top Movers

The top risers on the FTSE 100 on Wednesday, each making sizeable gains, are Entain (6.08%), Antofagasta (5.68%) and Anglo American (4.54%).

At the other end of the UK index is Hikma Pharmaceuticals (-1.71%), AstraZeneca (-1.33%) and Severn Trent (-1.19%).

DAZN in advance talks over takeover of BT Sport

Liam Roche
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0
DAZN in advance talks over takeover of BT Sport

BT Sport jumps on the news

The BT share price rose on Tuesday after news emerged that DAZN, the sports streaming service, had made a bid for the telecommunications company’s sports channels.

DAZN has entered advanced talks to buy BT Sports in a deal that could be confirmed in the coming weeks, leading the BT share price to climb by 2.7%.

A spokesperson for BT Sport said all options were on the table as the company continues to explore its options.

The deal would be a huge step for DAZN in its efforts to take-over sports broadcasting.

Despite being founded in London, the company has gained a lot of traction in North America and other regions.

This specific deal would give DAZN access to the coveted rights to Premier League football.

DAZN’s chair Kevin Mayer, a former Disney and TikTok executive, has previously stated his desire to get Premier League football on the platform.

“I would love to see the Premier League on DAZN in the future,” Mayer told a conference. “It’s a huge market, incredibly popular sport, high quality experience, of course we’d want that.”

Uber share price surges as company expects profitable quarter for the first time ever

Liam Roche
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0
Uber share price surges as company expects profitable quarter for the first time ever

Uber share price closed 11.49% higher yesterday

Uber is set to embark on a profitable quarter for the first time ever, on an adjusted basis, after over ten years of going through its billions of dollars cash piles.

The ride-hailing firm has seen its stock fall by nearly 40% since it reached an all-time-high in early February this year.

It is projecting gross bookings for July to September of between $22.8bn and $23.2bn, while its adjusted earnings before interest, tax, depreciation and amortisation is between ($25m) and $25m.

Uber’s chief financial officer Nelson Chai said a result less than break-even would need a substantial fall in business activity during the remainder of this month.

“With positive adjusted ebitda in July and August, we believe Uber is now tracking towards adjusted ebitda break-even in Q3, well ahead of our prior guidance,” said Chai, in a filing released before markets’ opening on Tuesday.

The Uber share price ended up closing 11.49% higher.

Chai said Uber is now expecting a strong Q4, and the filing projected that adjusted EBITDA would be between $0 and $100m.

Uber has previously told investors it was hoping for a loss “better” than $100m for Q3.

National Express and Stagecoach share prices rise on merger talks

Liam Roche
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National Express and Stagecoach share prices rise on merger talks

New larger company would have a market cap of £2bn

The share prices of both National Express and Stagecoach jumped up yesterday as investors got behind a possible merger between the two.

It followed National Express and Stagecoach confirming yesterday that they were holding talks.

As part of the deal, Stagecoach shareholders would own around 25% of National Express as they would receive 0.36 shares for each one they own in Stagecoach.

National Express added 7.6% on the news while Stagecoach soared by 27%.

“National Express’ plans to snap up rival Stagecoach have been met with a warm welcome all round; there’s just the little issue of the competition watchdog to deal with before any ink can meet paper,” said Danni Hewson, AJ Bell financial analyst.

The new company would become the largest bus operator in the country and would have a market cap of £2bn.

Director Dealings: Parsley Box at a discount

Andrew Hore
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Director Dealings: Parsley Box at a discount

Delivered ready meals company Parsley Box (LON: MEAL) floated earlier this year and the share price has nearly halved. The non-executive chairman is still convinced by the prospects, though.
Chris van der Kuyl has bought 85,000 shares at 100p each via 4J Studios Ltd, a company where he has significant control. 4J Studios has a 5.16% stake in Parsley Box and Chris van der Kuyl has a direct stake of 5.56%.
The current share price is 101p, compared with the placing price of 200p at the end of March 2021. Previously during the summer, Chris van der Kuyl bought 440,000 shares at 120p each, 20,000 s...

Boeing share price: could demand for new planes cause upwards move?

Liam Roche
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0
Boeing share price: could demand for new planes cause upwards move?

Boeing Share Price

The Boeing share price has been struggled over the past six months as the airplane manufacturer has struggled due to its own issues and the uncertainty surrounding the airline industry. Over the past six months, the company’s share price is down by 19.57%.

Boeing has previously stated that the pandemic cost the airline industry two years of growth. However, as the outlook has brightened somewhat, Boring has won a series of new orders. Only yesterday, news broke that the US is set to lift travel restrictions for vaccinated passengers from the UK and Europe.

Outlook

Boeing has some ideas about how the industry may recoup some of the losses made due to the pandemic. It has suggested that European airlines will cater to wealthier passengers by creating premium-priced cabins.

The airplane manufacturer also believes European airlines will need to replace around 750 of their plans as they are too inefficient and polluting, which of course bodes well for the company.

Boeing, along with rival Airbus, supply most of the world’s aircraft.

The company released a positive forecast yesterday as is assessed the market until 2040. It said that European airlines will order 8,7000 new aircraft as traffic levels return to pre-pandemic levels at an average rate of 3.1% a year.

“We believe air travel will return to pre-pandemic levels by late 2023, early 2024,” said Darren Hulst, Boeing’s commercial marketing chief.

“Within that, however, we believe domestic travel will recover to pre-pandemic levels by mid-2022. For long-haul which has currently only recovered to 42 per cent of where it was, we believe that will be mid-decade. The travel restrictions that are in place is the key issue. We believe the fundamentals of the market — economic activity and connectivity — do not change. It is just that the market will recover at different rates.”

“The airlines need to be versatile and we have to be adaptable,” Hulst added.

High inflation causes interest payments on UK debt to rise

Liam Roche
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0
High inflation causes interest payments on UK debt to rise

UK government borrowing higher than expected

The UK government had to borrow more than anticipated last month as rising inflation caused debt interest payments to increase.

The Office for National Statistics confirmed that the government’s budget deficit fell to £20.5bn in August from £26bn compared to the same month a year before, as the UK’s economy recovers from the pandemic.

However, the positive impact on national debt was offset by inflation causing interest payments on the country’s debt to go up by 84% year-on-year.

“August delivered another month when what the government raked in was far less than it spent and although the numbers are going the right way, borrowing figures overshot expectations. Tax receipts were up almost across the board with dips only in alcohol and tobacco duty and capital gains tax, the latter suggesting business is taking advantage of new incentives,” said Danni Hewson, AJ Bell financial analyst.

One of the big successes and one of the biggest costs has been the government’s furlough scheme which is now in its dying days.

“Spend on the scheme in August was just over a billion pounds, an almost 70% decrease compared to the same time last year as the jobs market bubbled and unemployment was kept in check,” Hewson added.

“All the support, all the restrictions have come with a substantial price tag and whilst the deficit might be lower than official forecasts, and the Chancellor might have a touch more wiggle room going into his autumn budget than had been expected, there are concerns.”

Inflation is not just something that’s making us wince when we get to the supermarket checkout, it’s also taking its toll on the public purse.

Hewson said: “Interest payments on all that debt shot up in August and September will be even more painful when you factor in the latest RPI figures. And the medicine for inflation, a rate rise from the Bank of England which is widely accepted to be on its way, will perversely also add to debt costs.”

JP Morgan Chase to launch digital bank to rival UK incumbents

Liam Roche
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0
JP Morgan Chase to launch digital bank to rival UK incumbents

JP Morgan Chase bank will expand into Europe and across the world if successful

JP Morgan Chase is set to launch a new digital bank as it seeks to become one of the largest lenders in the UK.

The ‘Chase’ bank will offer current accounts, in addition to savings, loans and other new products.

Sanoke Viswanathan, chief executive of the venture, said JP Morgan needs to have “millions of customers over time” to be viable.

JP Morgan is seeking to disrupt established institutions in its bid to be “in the top few” banks in the UK.

With a market cap of close to $500bn, JP Morgan is the biggest bank in America.

As of now, it employs just under 20,000 people in the UK, where its functions centre mainly around investment banking.

The bank has made a substantial but undisclosed investment in Chase UK, according to The Times.

Markets rebound from Evergrande sell-off

Liam Roche
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0
Markets rebound from Evergrande sell-off

The FTSE 100 staged a mini-resurgence on Tuesday morning, climbing by just over 1%, but not quite back above the 7,000 mark.

“Bargain hunters appeared to be out in force on Tuesday as the FTSE 100 bounced back from a torrid start to the week,” says AJ Bell investment director Russ Mould.

“The miners, scarred by heavy selling on Monday, eked out a recovery while British Airways owner International Consolidated Airlines continued the ascent which begin yesterday afternoon when the US lifted travel restrictions on fully vaccinated UK and EU visitors.”

A major factor in market volatility of late has been fears about the fall-out from a potential collapse of Chinese property developer Evergrande, and the concerns have not gone away.

“Evergrande is due to make a debt repayment on Thursday and this event could be the next major test of investors’ resolve.”

“The challenge for the markets is trying to guess how Beijing might react, particularly after its notably strident approach in recent months when it comes to the technology industry. Will it be similarly strict with the property sector?

Before Thursday there is also the latest US Federal Reserve meeting and the question of whether recent events will lead chair Jay Powell and his colleagues to rethink their plans for tapering financial stimulus.

FTSE 100 Top Risers

IAG (5.04%), Pershing Square Holdings (4.14%) and Shell (4.03%) are leading the way on Tuesday, each with sizeable gains.

At the other end, Kingfisher (-4.71%), Compass Group (-1.93%) and Polymetal International (-0.95%), were all in the red.

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