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Thursday Papers: US economy roars back with 4% growth

And bank bonus clawbacks could damage City’s competitiveness and impose direct costs of more than £260 million on the country’s banks, the industry has warned.

Thursday Papers: US economy roars back with 4% growth

Top stories

  • Financial Times: The US economy roared ahead with annualised growth of 4% in the second quarter, confirming that weakness early this year was an aberration and the recovery is back on track.
  • The Daily Telegraph: The Bank of England’s plans to impose seven-year clawbacks on bonuses and threaten bankers with jail could damage the City of London’s competitiveness and impose direct costs of more than £260 million on the country’s banks, the industry has warned.
  • Financial Times: Argentina defaulted on its sovereign debt for the second time in 13 years on Wednesday, after frantic last-minute talks between the country’s government and holdout creditors failed to strike a deal.
  • The Guardian: The country's largest domestic energy supplier, Centrica, is in talks with the government as fears mount that a worsening stand-off with Russia could undermine an important power deal.
  • Financial Times: Snapchat, the pioneer of self-destructing instant messages, has held talks about selling a stake to Chinese internet group Alibaba as part of a funding round that could value it at more than $10 billion.
  • Financial Times: India’s Tata group, the country’s largest conglomerate by revenue, has outlined plans to invest $35 billion over the next three years for expansion in areas such as retail and defence while breaking down silos in its sprawling business empire.
  • The Independent: Barclays has revealed profits were dragged down by its investment bank as well as another £900 million provision to cover PPI compensation, as cost cuts left the bank’s staff numbers at their lowest since 2007.
  • The Daily Telegraph: Strong pound played havoc with UK plc as British American Tobacco, National Express, Barclays and ITV all warn the strong pound is having a significant impact on profits and revenue.

Business and economics

  • Financial Times: Overseas investors are selling out of British government bonds at levels not seen for more than two years, in a trend analysts say could pose a problem if it continues.
  • Financial Times: Motor insurers will need to overhaul their business models to remain relevant in the coming decades, executives and consultants said on Wednesday, after driverless cars were given the green light to drive on British roads from January.
  • Financial Times: A vote for Scottish independence in September’s referendum could have a modestly negative impact on the UK stock market, according to a report from Barclays.
  • Financial Times: London needs £1.3 trillion invested in its infrastructure over the next 35 years to retain its place as one of the world’s leading cities, the Mayor of London has said.
  • Financial Times: Muslim groups have reacted angrily to a move by HSBC to shut down their bank accounts after the lender decided they posed too high a risk.
  • Financial Times: Credit conditions in the eurozone are finally easing, after seven years of financial and economic crises that forced the European Central Bank to slash interest rates below zero and pledge trillions in cheap loans to quell a collapse in lending.
  • Financial Times: A new EU financial services tsar charged with regulating the City of London and ensuring financial stability in the region would be appointed in Brussels under new plans being considered by Jean-Claude Juncker, the incoming European Commission president.
  • Financial Times: Jupiter Fund Management, a relative minnow in the world of fund management compared with the likes of Pimco, has this year succeeded where its much larger US rival has failed.
  • Financial Times: Carlyle, the world’s second largest private equity fund manager, said second-quarter profit nearly doubled, as the value of its European leveraged buyouts improved.
  • Financial Times: Unilever’s biggest competition is from fast-growing local companies, according to the head of the Anglo-Dutch group, in a sign of the mounting challenge to multinational consumer groups from homegrown emerging markets operators.
  • Financial Times: Antony Jenkins’s vision of Barclays is starting to take shape; while the picture remains blurred by restructuring costs, the drag of a stronger pound and the overhang of legacy litigation, analysts say the early signs are positive.
  • Financial Times: Nintendo suffered a greater first-quarter loss than it anticipated as the Japanese video games group battled falling sales of its consoles and software amid the rise of mobile gaming.
  • Financial Times: BBVA provided fresh evidence of the turnround in the Spanish banking market, as the country’s second-largest lender by assets unveiled a sharp decline in bad loan provisions and a further fall in its bad loan ratio.
  • Financial Times: The Italian academic behind a $550 million hedge fund that collapsed at the height of the financial crisis has lost his challenge against the UK financial regulator’s decision to ban him and fine him millions of dollars.
  • Financial Times: Amazon is investing an extra $2 billion in its India operations as the US online retailer takes advantage of the country’s fast-growing internet shopping market.
  • Financial Times: US banks are steeling themselves for the possibility of losing as much as $1 trillion in deposits as the Federal Reserve reverses its emergency economic policies and raises interest rates.
  • Financial Times: When government investigators raided Microsoft offices in four Chinese cities on Monday, it underlined the increasingly dire prospects for US technology companies in China.
  • Financial Times: IAC felt the sting of the US Supreme Court’s blow to Aereo, taking a $66.6 million writedown on the shuttered streaming video service and other investments that contributed to a $18 million second-quarter loss.
  • Financial Times: Shares in PSA Peugeot Citroën jumped on Wednesday as the French carmaker reported its first profits in three years, boosting the credibility of the turnround plan under new chief executive Carlos Tavares.
  • Financial Times: Rio Tinto is to sell its coal assets in Mozambique for $50 million – a fraction of the multibillion-dollar price it paid for them just three years earlier – closing a chapter on one of the most disastrous acquisitions in the miner’s history.
  • Financial Times: Greggs’ new low-calorie sandwiches are “giving permission” to people who previously shunned its pasties and sausage rolls to enter its stores, the company said on Monday, as it reported a rebound in half-year sales.
  • Financial Times: Tullow Oil reported a net loss for the first half of the year after writing off more than $400 million in exploration costs, but said it remained confident of its strategy.
  • Financial Times: Half-year profit has fallen a fifth at National Express after the bus and rail operator was hit by freezing weather in the US, industrial action in Spain and the strength of sterling.
  • Financial Times: News Corp is working on an app-based news service aimed at “millennial” readers, suggesting Rupert Murdoch’s enthusiasm for digital journalism is undimmed two years after he closed The Daily, the company’s tablet-based newspaper.
  • Daily Mail: World Cup advertising gave ITV a shot in the arm, despite the broadcaster opting not to show commercials during drinks breaks introduced to combat the Brazilian heat; pre-tax profit rose 40% to £250 million in the first six months, buoyed by a 13% rise in advertising income during the second quarter.
  • Daily Mail: Rothman and Dunhill maker British American Tobacco has warned that sales of electronic cigarettes are in danger of stalling because smokers are bored with what’s being offered.
  • Daily Mail: The Government has earmarked £3 million over the next two years to speed up the construction of up to 25,000 new homes across 85 new building sites as it faces increasing pressure to build more affordable properties amid a housing shortage.
  • Daily Mail: Taylor Wimpey today became the latest builder to benefit from the recovery in the housing market as it reported a huge jump in profits; the company completed the sale of 5,766 newly built homes in the first six months of the year, up 11% on the same period of 2013, while the average selling price rose 10% to £206,000.
  • Daily Mail: With predictions that interest rates may be about to rise for the first time since 2007, banks and building societies are increasing pay-outs on one and two-year fixed-rate bonds; one-year deals edged up to a whisker above 2% - the highest amount available this year.
  • The Guardian: David Cameron has given his strongest hint yet that he may be preparing a giveaway for higher-income earners when he said he would "love" to raise the level at which people started paying 40% tax.
  • The Guardian: Moscow was defiant on Wednesday in the face of sweeping US and EU sanctions designed to punish its continued backing of separatists in eastern Ukraine, promising that Russia would localise production and emerge stronger.
  • The Guardian: A record 22.3 million inquires about a house or flat were logged via the property portal Rightmove in the first six months of the year, in a sign that the UK housing market remains buoyant.
  • The Guardian: Three payday loan companies have had advertisements banned after Citizens Advice complained they were irresponsible and misleading.
  • The Independent: Gucci’s second quarter sales fell 2.4% and first-half reported operating profit fell 5.1%, hit by weaker wholesale numbers as its Paris-based owner cut the number of accounts that sell the label.
  • The Independent: Energy giant SSE lashed out at regulators saying it was “disappointed” by plans from the industry watchdog that promise to cut £12 a year from customers’ bills.
  • The Daily Telegraph: Banco Espirito Santo lost €3.6 billion in first six months of 2014 so that Portugal's largest listed bank now has less capital than it is required to hold.
  • The Daily Telegraph: Aircraft manufacturer Airbus’s profits took off in the first six months of the year, with group net income rising 50% to €1.14 billion as revenues climbed 6% to €27.2 billion.
  • The Daily Telegraph: China's central bank, and others, have become "major players on world equity markets", effectively fuelling stock bubbles in much the same way they previously fuelled credit bubbles.

Share tips, comment and bids

  • Financial Times: Airbus said it was considering selling its stake in Dassault Aviation as the European aircraft manufacturer reported a 10% rise in operating profit and gave an upbeat assessment for the commercial jetliner market.
  • Financial Times: AstraZeneca has bought a range of respiratory drugs from Almirall of Spain for up to $2.1 billion in its biggest deal since fending off a hostile takeover bid from Pfizer.
  • Financial Times: ITV chief executive Adam Crozier has shrugged off speculation of a takeover by cable group Liberty Group, as the broadcaster reported a decline in viewing figures in the first six months of 2014.
  • The Daily Telegraph: US cable giant AMC 'in talks' to take 50% stake in BBC America; the deal would see BBC Worldwide keep a majority stake in the channel while cutting costs and gaining access to AMC's creative team.
  • Financial Times (Lex): SodaStream: from trend to fad.
  • Financial Times (Lex): Tata Group: iron and gold.
  • Financial Times (Lex): Peugeot: crash course.
  • Financial Times (Lex): Bank bonuses: some stick.
  • Financial Times (Lex): Ecolab: a good merger?

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The Accumulator: FTSE see-saws on trade war fears

by Michelle McGagh on Jun 22, 2018 at 14:57

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