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Global shares slide after Apple coronavirus warning

It was a poor day for European markets overall, with resurgent coronavirus fears and a fairly strong performance for sterling putting pressure on Londons top indices.
Other top stories:
Global shares slip as Apples warning on coronavirus impact rattles markets
Britains employment rate stood at 76.5pc in December
Real basic pay finally climbs back above pre-crisis levels
German business sentiment plunges
HSBC unveils restructuring with plansto slash 35,000 jobs
Hong Kong revenues slump at InterContinental Hotels
Ministers could backtrack on crucial Flybe tax cut
Andrew Bailey: how Mr Crisis made it to the top of the Bank of England
Markets Hub embed test
5:32PM
Market wrap
The mood was set early today, with Apples decision to scrap revenue forecasts in response to the outbreak caused alarm among investors, who have largely shrugged off the outbreak so far.
Among blue-chips, materials and oil firms performed poorly as traders fretted over the prospect of a manufacturing downturn sparked by the epidemic. Utilities firms, seen as bond-proxies, outperformed the index. Many individuals movers were swept up amid the risk-off mood.
What to look forward to tomorrow:
Full-year results: Gooch & Housego
Preliminary: Hochschild Mining, Temple Bar Investment Trust
Economics: CPI inflation (UK), building permitsand housing starts, FOMCminutes (US)
5:05PM
Germans eye Priory rehab clinics takeover
Global shares slide after Apple coronavirus warning

The Priory is well known for its work treating models such as Kate Mossat its Roehampton hospital
German healthcare group Schoen Klinik is joining the race to buy the high-profile rehabilitation company Priory Group, according to Sky News.
Germany's Schoen Klinik,which is backed by buyout firm Carlyle, is believed to be among bidders including Australia'sRamsay Health Care and Canadian investors Brookfield.
Priory's American owners Acadia, which bought the chain in 2016 for ?1.5bn, said last May they were open to a sale of the group at the right price.
The Priory is well known for its work treating models such as Kate Mossat its Roehampton hospital, but also treats thousands of people across the country for psychiatric conditions and brain injuries.
4:48PM
Europe closes lower
Apple's warning pushed markets in Europe lower today, with the FTSE 100 ending 0.69pc behind and the wider FTSE 250 falling 0.68pc.
In the eurozone the GermanDAX fell 0.75pc and the Paris CAC closed 0.48pc lower.

"The warning from the tech giant spooked traders as it is probably a sign of what is to come from other companies that have exposure to China which is a very long list," says David Madden of CMC Markets.
"The health crisis is causing major disruption to businesses in the second-largest economy in the world, so traders are ducking out of equities."
4:36PM
FCA bans a range of Rix Motor Company adverts
Global shares slide after Apple coronavirus warning

The Financial Conduct Authority (FCA) has banned a number of online adverts issued by Rix Motors.
The watchdog said posts on Rixs Instagram account, as well as three of its websites, breached its rules. Rix has now withdrawn the adverts from its platforms.
The FCA had already raised concerns with Rix about its online adverts in 2017 and 2018.
The family run business, established in 1984, posted a pre-tax profit of ?1.53m for the year ended October 31 2018, up from ?817,288 the previous year.
4:25PM
Good afternoon
Thanks for following along so far today. Markets in Europe are set to close in the next 5 minutes so we will have a look at the final closing figures very soon.

Ostensibly a session where investors were forced to consider the economic impact of the coronavirus outbreak by Apple and the days data, the Western markets still managed to keep their losses at the more reasonably end of the spectrum, says Connor Campbell of CMC Markets.
Markets Hub I FTSE 100
4:19PM
Handover
All this mornings charting work has taken it out of me, and its time to go make sense of the stock-market movers for our market report. Handily, my colleague LaToya Harding is here to steer the blog into the evening. Thanks for following along today!
4:11PM
A good graphic...
Peel Hunt analysts, in their latest look at the impact of the coronavirus, have produced this interesting graph comparing populations related to the outbreak:
Global shares slide after Apple coronavirus warning

Credit:
Peel Hunt
They write:

While new cases are stable for now, it has come at a cost. Controls on movement, quarantined towns and strict operating protocols might be controlling the virus, but the impact on business is inevitable. The longer these measures are required, the more companies will fall short on forecasts. The duration rather than severity of the virus is now the biggest factor for the global economy.
3:40PM
Jaguar Land Rover reveals boxy concept car
Global shares slide after Apple coronavirus warning

The vehicle has sliding doors and a flat floor to maximise space
Jaguar Land Rover has unveiled its latest vision of the future of driving a boxy, bus-like electric concept car.
My colleague Alan Tovey reports:

Called Project Vector, the vehicle is Britains biggest carmakers answer to the challenges of driving in cities, and representsa massive departure from the sleek sports cars and rugged off-roaders it is known for,
The new vehicle packs its motors and batteries into a base platform, which results in a flat floor, maximising space inside.
This, combined with sliding doors, allows for a variety of seating plans and uses, according to JLR.
The 13ft long design means it could be used as a shared mobility vehicle, or even for commercial purposes, such as last mile deliveries in areas where vans with conventional engines are banned.
Read more:Jaguar Land Rover unveils box-like car of the future
Separately, the group has said it has enough parts from China to maintain production levels for the next two weeks, but warned of potential shortfalls past that point. Chief executive Ralf Speth said:

We are safe for this week and we are safe for next week and in the third week we have... parts missing
3:33PM
China unveils stimulus package
Just in: Chinas commerce ministry has announced plans to stabilise foreign trade and stimulate consumption as it battle the coronavirus outbreak.
In a statement (translated by Bloomberg), the ministry said it will:
Support foreign trade-oriented businesses, foreign-invested firms, businesses engaging in commercial circulation and e-commerce to resume operations in an orderly manner
Coordinate with agencies to speed up approval procedures for firms to resume operations
Encourage foreign trade-oriented firms to increase imports of medical supplies and agricultural products that are most needed domestically
Guide firms to expand production of protective medical devices
Simplify managing procedures of foreign trade
Guide firms to apply for export and import licenses in paperless mode; to speed up processing items needed for preventing and fighting coronavirus outbreak
Respond pro-actively to overseas restrictions on trade; oppose some nations overreaction or unnecessary trade restrictions
Promote consumption in service sectors; to guide companies to provide services to residential communities that are affected by coronavirus outbreak; to help grow Internet- based consumptions
Quite a package, though markets might have preferred for it to have come with a nice price tag attached.
Global shares slide after Apple coronavirus warning

A temporary hospital converted from a sports centre in Wuhan

Credit:
Xiao Yijiu/eyevine
2:38PM
US shares fall
As expected, US shares have fallen at the open... but not very much. Remarkably, losses are looking very contained currently, despite the big losses pointed to by futures trading.
Global shares slide after Apple coronavirus warning

Credit:
Bloomberg TV
2:35PM
US fund merger
Heres the detail on some more asset manager merger action, via my colleague Michael ODwyer:

US asset manager Franklin Templeton has struck a $4.5bn (?3.5bn) deal to buy rival firm Legg Mason in a move that will create a $1.5 trillion investment titan.
Franklin said it would pay for the takeover using cash from its balance sheet. It will also take on about $2bn of Legg Masons debt.
The merger is the latest in a wave of major tie-ups in the asset management industry as active fund managers seek to bulk up in a bid to cut costs and compete with cheaper tracker funds.
2:33PM
Apple shares drop at open
Trading has kicked off in the US, and Apple shares have immediately dropped about 2.6pc thats obviously a lot of money, given the companys size, but not as bad as had been indicated by pre-market futures trading earlier.
2:30PM
A glimmer of hope?
Despite coronavirus concerns, the Empire State Manufacturing survey released by the Federal Reserve Bank of New York earlier this afternoon has come in with a strikingly good result, with a reading of 12.9 handily beating analystsexpectationsof 5.
The gauge tracks sentiment based on interviews with executives of manufacturing firms in the state of New York.
1:59PM
Coronavirus is a very big deal for companies
Heres a potentially interesting chart: using data from Sentieo, Ive mapped the number of weekly mentions of coronavirus and its synonyms in global companies filings or call transcripts, versus mentions of Brexit, recession, trade war and their synonyms.
Obviously this is an imperfect measure, but the resultis striking. A few caveats to be aware of: this could include mentions of recessions anywhere, is biased towards US company filings, and would count the coronavirus will not affect us at all in the same way itcounts the coronavirus is destroying our business.
1:36PM
Brent ends streak of gains
On the commodities front, oil has broken a five-day streak of gains, with Brent crude falling slightly during todays session.
Oil has been one of the worst-hit commodities during recent market movements, amid fears (seemingly justified) that coronavirus will lead to a widespread fall in demand. INGs Warren Patterson and Wenyu Yao said opportunistic buying at lower levels appears to have provided a floor to the market for now.
Global shares slide after Apple coronavirus warning

Fear over the coronaviruss impact on demand have knocked oil prices

Credit:
Christian Hartmann/REUTERS
1:19PM
US set for fall
With just over an hour to go until US markets open, futures trading suggests the benchmark S&P 500 is set to fall about 0.45pc at the open thats a little less than previously feared.
1:05PM
Pound jumps
The pound has pushed strongly upwards again during todays, pipping the heights reached during last Thursdays reshuffle to hit a two-month high against the euro.
Sudden jumps like this do point to volatility, however: Saxo Banks John Hardy warned hopes for generous fiscal outlays when the UK budget is announced next month may not sit well with a retrenchment in risk appetite.
12:59PM
Full report: Pay hits record high
My colleague Tim Wallace has a full report on this mornings jobs data. He writes:

The average worker brought in ?512 a week in regular pay at the end of 2019, according to the Office for National Statistics. After stripping out inflation, this is 35p more than the previous peak in August 2007.
At the same time employment hit a new record with 32.9 million people in work in the final quarter of the year, up by 180,000 on the quarter and 336,000 on the year.
The jobs market stayed strong despite the intense uncertainty of the October Brexit deadline and the December general election.
Read more:Pay packets hit new record high
12:14PM
Money round-up
Here are the days top stories from the Telegraph Money team:
Bond returns are at record lows heres how to cut costs and save your portfolio
How fund managers use the wrong benchmarks to trick investors
Pensions doctor: I rely on my husbands pensions how will I survive if he goes into care?
11:46AM
Amigo in talks with several parties over sale
High-interest lender Amigo said it has received interest from several parties over a possible sale, after formally launching a strategic review and putting itself up for sale last month.
Read more:With the FCA bearing down, it may well be adios Amigo
The group added:

There can be no certainty that an offer will be made, nor as to the terms on which any offer will be made

Multi-millionaire founder James Benamor unveiled plans to offload his stake at the end of January, a move which wasdescribed by analysts as an attempt to jump ship.
11:31AM
Glencore sinks to loss
Global shares slide after Apple coronavirus warning

Glencore is currently facing an bribery probe

Credit:
Per-Anders Pettersson/Getty
Glencore swung to anannual loss after taking charges of almost $3bn (?2.3bn) on coal, oil and copper assets.
The miner reported a $888m pre-tax loss as revenues fell dipped 2pc to $215bn. Net debt increased almost $2bn to $17.6bn.
My colleague Simon Foy reports:

Glencore took big writedowns ontwo of its key Colombian coal mines, which predominantly ship to Europe, where coal markets havebeen hit hard by cheap gas.
Chief executive Ivan Glasenberg said: "Our performance in 2019 reflected the prolonged and uncertain trade deal negotiations, generally weaker prices for our key commodities and some operational challenges experienced at our ramp-up/development assets."
The world's biggest commodity trader has struggled amid sliding prices for raw materials and has been the focus of several corruption and bribery investigations.
Read more:Glencore sinks to annual loss on $3bn writedowns
11:19AM
Walmart misses estimates
Just flashing over the wires: Walmart missed analyst estimates for its performance in the fourth quarter, adding to nerves following Apples warning last night.
Footfall in the groups stores was disappointing, with a $110m hit taken in its Chilean operations due to unrest in the country.
Doug McMillon, its chief executive, said:

Sales leading up to Christmas in our USstores were a little softer than expected

Earnings per share were $1.38, versus expectations of $1.43, while revenue came in at$141.67bn versus the$142.49bn that had been expected.
Global shares slide after Apple coronavirus warning

Walmart is the USs biggest supermarket chains

Credit:
Kamil Krzaczynski/REUTERS
11:11AM
Tight labour market raises questions
More reaction to this mornings data drop: Victoria Clarke, one of Investecs economists, said it continues to be strange that such a tight labour market (in which it appears as though Britain is at or near full employment), there arent higher wage increases as a result of jobseekers being able to seek better terms due to a lack of competition for places. She writes:

One question that continues to be asked is why, given the apparent tightness of the labour market, has pay growth tracked lower since last summer. With UK economic sentiment seemingly recovering at the start of 2020 (notwithstanding novel coronavirus disruptions to come), we will be watching closely to see whether this provides some upward momentum on pay.
Indeed, one question is if the recovery in sentiment would leave workers keener to bid for pay increases and firms more willing and able to award these.
10:59AM
Nissan investors fury
Global shares slide after Apple coronavirus warning

Nissan chief Makoto Uchida

Credit:
Kim Kyung Hoon/REUTERS
Nissans new chief executive has faced off with furious shareholders angry at the scandal-racked companys plunging profits and collapsing share price.
Our Industry Editor Alan Tovey reports:

Makoto Uchida was grilled by investors at an extraordinary meeting to approve the appointment of four directors.
As the Japanese automotive giant tries to move on from the crisis sparked by the arrest of former chairman Carlos Ghosn in 2018, Mr Uchida was bombarded by questions from shareholders demanding executives give up their pay.
Mr Uchida admitted that following the shocking scandal, Nissan remains in a disastrous situation, but asked for time to improve governance - as well asboost the companys financial performance.
Read more:Angry Nissan investors vent fury at new boss
Carlos Ghosn timeline
10:45AM
Productivity rises
Alongside this mornings labour market figures, the Office of National Statistics also released flash productivity data for the fourth, which showed the UKs output per hour increased 0.3pc year-on-year during the final three months of 2019.
Thats because gross value added a measure of production tied closely to GDP rose faster than hours worked. As the ONS explains:

An increase in hours worked will contribute negatively to output per hour; while a decrease in hours worked will contribute positively to output per hour.

Productivity has languished since the financialcrisis, but back-to-back gains over the second half of last year are likely to be welcomed.
In the chart below (with data from the ONS), estimates of hours worked have had their sign reversed to reflect how they affect output per hour.
Adam Hardy, from charity Be the Business which campaigns to close the UKs productivity gap said:

It will take more than single a quarter of improvement to set a new course for our economy. Infrastructure investment will deliver in the long run, but getting the economy running in a higher gear requires businesses to get ambitious about growing.
10:24AM
Reaction: UK jobs figures
There was plenty to chew on in this mornings jobs and wage figures (and thats before we even get on to productivity expect that shortly).
Wage growth was enough to drag pay packets over an important psychological threshold, and a jump in employmentis likely to be welcomed, but some signs of underlying weakness remained.
The numbers will be closely watched by the Bank of Englands Monetary Policy Committee when its makes it next decision on rates late next month.
Andrew Bailey: how Mr Crisis made it to the top of the Bank of England
James Smith, an analyst at Dutch bank ING, has rounded up his three big takeaways from the ONSs latest data dump:
Better jobs data than surveys suggested: Despite all the ups-and-downs over the past few months, the UK jobs market has stayed relatively resilient. Thats the main message from the latest employment report 180,000 jobs were added in the three months to December.
Dont expect a quick or substantial increase in employment growth: [T]here is a risk that activity in the jobs market remains partially constrained by the ongoing uncertainty surrounding the future UK-EU trade relations. Were not convinced that the buoyant business sentiment will translate into a large pick-up in investment
Lower wage growth unlikely to faze Bank of England: [W]e think the bar for cutting interest rates will still be set relatively high in the next couple of meetings. Barring a material deterioration in growth, we expect rates to remain on hold this year.
Pantheon Macroeconomics Samuel Tombs added:

[T]he clear recovery in all survey indicators of labour demand since the general election suggests that job postings will pick up soon. In addition, we remain confident that wages will regain momentum this year
Global shares slide after Apple coronavirus warning

Credit:
Pantheon Macroeconomics
Capital Economics Thomas Pugh saidthe figures suggest the labour market joined the rest of the economy in turning a corner at the end of last year. He added that the numbers should be solid enough to put paid to any interest rate cut in the near term:

Overall, the strength in the labour market in Q4 will give some comfort to the MPC that it was right to keep rates on hold at 0.75pcat its meeting on 31st January. Of course, this is all old news, but the most recent surveys are suggesting that employment growth will continue to pick-up in Q1, which we think will contribute to the MPC keeping rates on hold at its next meeting on 26th March as well.
Global shares slide after Apple coronavirus warning

UK unemployment remains stubbornly low

Credit:
Oli Scarff/Getty
10:15AM
German economic sentiment falls
Just in a few minutes ago: German economic confidence has taken a fresh plunge, with coronavirus fears rattling investors in Europes biggest economy.
February readings for the ZEW index of expectations seen as one of the best early indicators of GDP growth were weak, falling below even the most downbeat analysts estimates.
Expectations gave a reading of 8.7 (21.5 predicted)
Current situation came in at 15.7 (10 predicted)
ZEW President Professor Achim Wambach said:

The feared negative effects of the Coronavirus epidemic in China on world trade have been causing a considerable decline of the ZEW Indicator of Economic Sentiment for Germany. Expectations regarding the development of the export-intensive sectors of the economy have dropped particularly sharply.
Besides, the end of 2019 and the beginning of 2020 saw a worse-than-expected development of the German economy. Both the downward revision of the assessment of the economic situation and the downturn in expectations show clearly that economic development is rather fragile at the moment.
The plunge in the German ZEW in February is highlighting that concerns of the Coronavirus have risen since the earlier released Sentix index and it underscores the risks of a sharp decline in the PMIs on Friday. A drop below 50 in German composite would not be a huge surprise. pic.twitter.com/Skh1Fwh6wO Oliver Rakau (@OliverRakau) February 18, 2020
9:59AM
UK Budget day confirmed
Despite some wobbles in recent days, new Chancellor Rishi Sunak has confirmed the UK Budget will go ahead as planned on March 11:
Cracking on with preparations for my first Budget on March 11. It will deliver on the promises we made to the British people levelling up and unleashing the countrys potential. pic.twitter.com/5msCVfJWN8 Rishi Sunak (@RishiSunak) February 18, 2020
9:57AM
Real basic pay finally back above pre-crisis levels
One particularly striking number in todays figures: UK basic weekly wages have climbed above their pre-crisis levels for the first time, with the highest reading since 2000.
However, the resolution Foundation notes the numbers could have been much higher were it not for a downturn in pay over recent years:
Important context to the welcome return of record pay levels today. Absent the UK's unprecedented 12-year pay downturn, real average weekly earnings would be ?141 a week higher. That's a lot of lost ground - a huge living standards loss. pic.twitter.com/9wRQKQHLsW ResolutionFoundation (@resfoundation) February 18, 2020
On weekly earning, the ONS says:
Estimated annual growth in average weekly earnings for employees in Great Britain slowed to 2.9% from 3.2% last month for total pay (including bonuses), and to 3.2% from 3.4% for regular pay (excluding bonuses).
The annual growth in total pay was weakened by unusually high bonus payments paid in October 2018 compared with more typical average bonus payments paid in October 2019.
In real terms (after adjusting for inflation), annual growth in total pay is estimated to be 1.4%, and annual growth in regular pay is estimated to be 1.8%.
In real terms, regular pay is now at its highest level since the series began in 2000, whereas total pay is still 3.7% below its peak in February 2008.
Annual growth in total pay remains weakest in the wholesaling, retailing, hotels and restaurants sector at 1.1%, and the manufacturing sector at 2.7%.
That earnings growth figure is a little disappointing: analysts had been expecting growth of 3pc in October:
9:48AM
Heres how unemployment rates have shifted over recent decade
It increasingly looks like unemployment levels may have leveled out, with that 3.8pc figure looking hard to budge. Heres how the number has changed over the longer term:
The ONS adds:

For October to December 2019, an estimated 1.29mpeople were unemployed. This is 73,000 fewer than a year earlier and 580,000 fewer than five years earlier.
9:39AM
Employment rate at record high
Alongside those steady unemployment figures, employment along people aged 16 to 64 rose to its highest-ever level in December, with 76.5pc of people in work during the month, despite political uncertainty and a manufacturing slowdown.
Here are theOffice for National Statistics main takeaways in its employment report today Ill break down the figures here in the coming minutes:
The UK employment rate was estimated at a record high of 76.5%, 0.6 percentage points higher than a year earlier and 0.4 percentage points up on the previous quarter.
The UK unemployment rate was estimated at 3.8%, 0.2 percentage points lower than a year earlier and 0.1 percentage points lower than the previous quarter.
The UK economic inactivity rate was estimated at a record low of 20.5%, 0.4 percentage points lower than the previous year and 0.3 percentage points lower than the previous quarter.
Estimated annual growth in average weekly earnings for employees in Great Britain slowed to 2.9% from 3.2% last month for total pay (including bonuses) and to 3.2% from 3.4% for regular pay (excluding bonuses).
In real terms (after adjusting for inflation), annual growth in total pay is estimated to be 1.4% and annual growth in regular pay is estimated to be 1.8%.
There were an estimated 810,000 vacancies in the UK for November 2019 to January 2020; this is 7,000 more than the previous quarter but 50,000 fewer than a year earlier.
9:33AM
UK unemployment unchanged
Just in: The UKs unemployment rate was unchanged in December at 3.8pc, in line with economists expectations.
More follows...
9:29AM
Apples monster market cap
A big chunk of todays drag on the S&P 500 could come from apple itself, with the groups giant market cap (around $1.4 trillion at yesterdays close) meaning its movements can produce a big shift in either direction.
9:17AM
Apple shares drop
Shares in Apple have dropped as much as 4.2pc in pre-market trading after the tech titan scrapped its revenue guidance for the first quarter, citing coronavirus disruption.
Futures trading in the US is pointing towards a sharp drop in share prices when Wall Street trading opens, as traders come to terms with the widespread disruption the virus is likely to cause.
Rabobank strategistJane Foley said:

Even though Apple had recently indicated there would be some disruption in its supply chains across China, yesterdays announcement was significantinsofar as it was the first from a major US company that outlined the fallout from Coronavirus on revenue.
Specifically, Apple warned that it was experiencing a slower return to normal conditions that it had anticipated. Not only does this mean that worldwide sales will be temporarily constrained but slow traffic and reduced opening hours in its stores across China also meant that demand from Chinese consumers would be lower.

Apple is the USs biggest listed group, so a sharp fall for the group will always put a major drag on the indices it is part of.
9:04AM
Pound continues to weaken
Sterling has fallen further this morning, breaking through $1.30 as part of a continued winding-down of last weeks gains.
The currency jumped on Thursday after Sajid Javid resigned as Chancellor, with investors betting his replacement Rishi Sunak will turn on the spending taps with big spending pledges. Since then, it has cooled off a little.
In the short-term, the biggest influence to sentiment will come from a modest basket of economic data set to come through at 9:30am, including UK unemployment data. Theres not expected to be a shift in the numbers from 3.8pc, but traders will be keeping their eyes peeled in case of a surprise.
Solid data might not be enough to boost sterling, however. Derek Halpenny, from Japanese bank MUFG, warned:

[O]ur sense at current levels is that much of the good news is now priced into the pound and good economic data over the coming weeks may not be enough to see a break higher
8:49AM
HSBC: Analyst reaction
Shares in HSBC have dropped as much as 5pc this morning, following a slump in the groups profits and its announcement of restructuring including up to 35,000 lost jobs.
Our banking editor Lucy Burton now has a full report up on the companys plans:
HSBC to axe 35,000 jobs in sweeping overhaul
Notably, there was still no announcement on who the banking giants new chief executive will be, with Noel Quinn forced to unveil major changes despite not knowing whether he will be the one wielding the axe. The announcement of a new CEO will be made in the next 612 months, the bank said.
The structuring is likely to hit middle- and back-office staff hardest, with reductions in both areas but no plans to formally merge to two.
It is unlikely to register much through the noise of the restructuring, but the bank actually beat the average of analystss estimates for pretax profit in the fourth quarter, which came in at $4.3bn versus consensus of $3.9bn.
Still, that represents a 33pc drop, so I dont think the banks senior management will be writing home about those numbers soon.
One of the most notable goals of its restructuring plan is to raise its return on tangible equity one of the most crucial measures of a banks financial strength to 10pc12pc by 2022. Last year, it stood at 8.4pc.
HSBC is Europes biggest bank and todays update is likely to be a big mood-setter for the sector. Heres how analysts are reacting.
Jefferies analyst Joseph Dickerson sounded cautiously upbeat, saying HSBCs planlooks ambitious and very credible.
Goodbodys John Cronin concurred, saying he thinks it is a strong strategy, but adding: We are staggered that the Board has not moved to officially appoint Noel Quinn to the CEO position and we think it can only be a matter of time.
Royal Bank of Canadas Benjamin Toms said: Management has taken significant steps to reorganise and restructure the business, however this will come with execution risk and revenue attrition.
8:31AM
InterContinental Hotels falls
Global shares slide after Apple coronavirus warning

InterContinental runs the Crowne Plaza and Holiday Inns chains

Credit:
LUKE MACGREGOR/Reuters
Losses are pretty widespread on the FTSE 100 today, but InterContinental Hotels is among the biggest fallers, after it warned protests in Hong Kong had knocked its revenues in the territory.
Despite a rise in revenues across its business, revenues per available room across its Hong Kong operations slumped by 63pc. It blamed the drop in continued unrest in the Asian financial hub.
The results were broadly in line with consensus,
Keith Barr, IHGs chief executive, said:

Our performance in 2019 reflects the continued successful execution of our strategy, with the investments we're making in our brands, owner offer and enterprise capabilities accelerating net room openings and supporting sustainable long-term growth.
City Intelligence (SUBSCRIBER) Article
He added,on coronavirus (which is likely to hit the group further as people avoid travelling):

Given the ongoing impact of coronavirus following the outbreak in China, our top priority remains the health and safety of our colleagues, guests and our partners on the ground, and we are doing all we can to support them at this difficult time.

Rotal Bank of Canada analyst Julian Easthope said IHG was a high quality growth business but on a high multiple, but added:

China isweak given excess supply and a slowing economy, and the groupis also suffering in Europe. As a result, it is unclear where a positive catalyst could come from.
8:18AM
Audit watchdogs virus warning
As coronavirus begins to crop up more and more in companies results, Britains audit watchdog has published guidance for companies, encouraging them to disclose the impact the outbreak will have on their financials.
The Financial Reporting Council said it is advising companies to carefully consider what disclosures they might need to include in their year-end accounts, which will be particularly relevant for companies either operating in or having close trading associations with China.
A spokesperson for the FRC said:

Given the potential for rapid spreading of the virus, required disclosures will likely change over time as more information about the epidemic emerges.
Companies will need to monitor developments and ensure they are providing up-to-date and meaningful disclosures to their shareholders when preparing their year-end reports.
8:12AM
European shares fall
As expected, Apples forecast cut has rattled global markets, with European indices joining in the losses this morning.
Global shares slide after Apple coronavirus warning

Credit:
Bloomberg TV
Apple admitted it would miss expected sales figures due to a punishing double hit on iPhones, which are being hit by reduced production capacity and lower demand.
Swedish bank SEBs Lauri Halikkasaid:

It is two months since the coronavirus, officially known as COVID-19, started to spread and it is now gradually having a visible impact on the real economy. Apple notes however that Chinese production has resumed, but the rebound is slower than expected. The US stock market, which so far has been very little impacted from the turmoil, may begin to show symptoms as well as Apple is one of the largest contributors to the S&P500 earnings and price performance.
8:07AM
HSBC to cut 35,000 jobs
Global shares slide after Apple coronavirus warning

HSBC has been trying to lower costs as it faces a multitude of challenges

Credit:
ISAAC LAWRENCE/AFP
Heres some more details on HSBC, which is bound to be one of the days biggest stories:

HSBC announced a radical overhaul on Tuesday, including plans to slash 35,000 jobs and slim operations in the United States and Europe, after profits slid by a third last year.
The Asia-focused lender has been trying to lower costs as it faces a multitude of uncertainties caused by the grinding US-China trade war, Britain's departure from the European Union and now thedeadly coronavirus in China.
While its Asia business has done well in recent years fuelled primarily by China Europe and the US have disappointed.
Noel Quinn, who took over as acting chief executive after the shock ouster in August of John Flint,has been tasked with transformingthe sprawling international bank, which spans more than 50 countries but makes the vast majority of its profit in Asia.
Read more:HSBC to axe 35,000 jobs in sweeping overhaul
7:23AM
Agenda: Apple warning spooks markets
Good morning. European shares areset to open in the red, following Asian indexes, after Apple warned that it will miss its revenue forecast this springdue to thedevastating impact of coronavirus on the Chinese economy.
The companysaid that the iPhone, which generates the bulk of Apples revenue, is temporarily constrained due to production ramping up more slowly than anticipated due to the deadly virus.

5 things to start your day


1)HSBC announced a radical overhaul on Tuesday, including plans to slash 35,000 jobsand slim operations in the United States and Europe, after profits slid by a third last year.
2) Apple has warned investors that it will miss its revenue forecast for this spring due to the devastating impact of coronavirus on the Chinese economy.The company previously said that it expected to report net sales of between $63bn (?48bn) and $67bn in the three months ending this June.
3)Ministers could backtrack on crucial Flybe tax cut:New Chancellor Rishi Sunak could abandon a controversial overhaul of air passenger duty agreed as part of a rescue deal for Flybe -hurling the regional airline'slong-term future into jeopardy.
4)Friends with bonuses: men get ahead by befriending the boss.Socialising with the boss really does help you get ahead - but only if you are both men.A study, published by the National Bureau of Economic Research, found clear signs of the old boys club in action.
Company gender pay gap interactive - 2018-19
5)British Steel bidder Jingye is set to axe 400 jobsat the embattled firm's Scunthorpe plantas it closes in on a takeover. The Chinese business, which ishoping to take on the steel factoryand its related divisions within weeks, has begun sending out new contracts to staff.

What happened overnight


USfutures fell with Asian stocks after Apple said quarterly sales would miss forecasts, illustrating the blow to corporate earnings and economic growth from the deadly coronavirus.
Equity benchmarks in Tokyo, Seoul and Hong Kong saw declines of over 1pc. Sydney and Shanghai saw more modest drops.
Apple suppliers including TDKand Tokyo Electron slumped after the iPhone maker warned on both production and sales disruptions due to the epidemic.
Tuesdays trading session saw renewed concerns about the coronavirus impact, even as the growth rate of cases in Chinas Hubei province -the epicenter of the disease -continues to stabilize.
Its a turnaround from Monday, when sentiment was lifted by Chinese policy makers moves to support companies hit by the prolonged shutdown of large parts of the country. Chinas stocks had recouped all of their losses following the Lunar New Year holiday.

Coming up today


Interim results: BHP, Pan African Resources
Full-year: Glencore, HSBC
Preliminary: InterContinental Hotels
Economics: Unemployment, average earnings (UK), ZEW business expectations survey (Germany)
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