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Markets await US growth and trade data as Trump boom continues - business live Markets await US growth and trade data as Trump boom continues - business live
(35 minutes later)
10.39am GMT
10:39
In South Korea, more problems for Samsung. Justin McCurry reports:
The acting head of Samsung is to be indicted on bribery and embezzlement charges connected to a corruption and cronyism scandal centring on South Korea’s impeached president, Park Geun-hye.
Lee Jae-yong and four other Samsung executives will almost certainly face trial over accusations that South Korea’s biggest conglomerate donated millions of dollars to foundations run by a close friend of Park’s in exchange for government favours.
Later on Tuesday, Lee, who is officially Samsung’s vice-president but has in effect run the company since his father suffered a heart attack in 2014, will be charged with bribery, embezzlement, hiding assets overseas and committing perjury before parliament, prosecutors said on the final day of their investigation into a scandal that has rocked the country’s political and business worlds.
The four executives, who all face the same charges as Lee except perjury, are the Samsung group’s vice-chairman, Choi Gee-sung, and president, Chang Choong-ki, as well as Samsung Electronics’ president, Park Sang-jin, and executive vice-president, Hwang Sung-soo.
Some of the executives will resign and leave Samsung, but Lee is expected to stay on as de facto head of the company if there is a trial.
The full story is here:
10.18am GMT10.18am GMT
10:1810:18
Over in Europe and there has been a strong rise in Italian inflation, which is likely to boost the overall eurozone figure:Over in Europe and there has been a strong rise in Italian inflation, which is likely to boost the overall eurozone figure:
Likelihood of #Eurozone #consumer #price #inflation rising in Feb (1.8% in Jan) lifted by #Italian HICP inflation jumping to 1.6% from 1.0%Likelihood of #Eurozone #consumer #price #inflation rising in Feb (1.8% in Jan) lifted by #Italian HICP inflation jumping to 1.6% from 1.0%
10.10am GMT10.10am GMT
10:1010:10
Here’s Reuters’ first take on Charlotte Hogg’s appearance at the Treasury Committee:Here’s Reuters’ first take on Charlotte Hogg’s appearance at the Treasury Committee:
Bank of England Deputy Governor Charlotte Hogg, who will join the central bank’s top policy committees next month, said on Tuesday she would be able to stand up to BoE Governor Mark Carney if required.Bank of England Deputy Governor Charlotte Hogg, who will join the central bank’s top policy committees next month, said on Tuesday she would be able to stand up to BoE Governor Mark Carney if required.
Hogg, who is currently the Bank’s chief operating officer, also said she did not think there was a culture of group-think at the Bank.Hogg, who is currently the Bank’s chief operating officer, also said she did not think there was a culture of group-think at the Bank.
Asked by a committee of lawmakers if she thought she would be able to stand up publicly to Carney, Hogg said: “I do.”Asked by a committee of lawmakers if she thought she would be able to stand up publicly to Carney, Hogg said: “I do.”
She said she had already had disagreements with Carney in her current role over staffing and organisational issues.She said she had already had disagreements with Carney in her current role over staffing and organisational issues.
Hogg replaces Minouche Shafik as deputy governor for markets and banking. She will serve on the Bank’s monetary, financial and prudential regulation policy committees.Hogg replaces Minouche Shafik as deputy governor for markets and banking. She will serve on the Bank’s monetary, financial and prudential regulation policy committees.
9.47am GMT9.47am GMT
09:4709:47
BoE's Hogg: When Unwinding QE, BoE Will Do So In A Way That Is Mindful Of The Need To Maintain Orderly MarketsBoE's Hogg: When Unwinding QE, BoE Will Do So In A Way That Is Mindful Of The Need To Maintain Orderly Markets
BoE's Hogg: MPC Must Be Clear About Its Intentions When Unwinding QE In Order To Avoid An ‘Unintended Move’ In Gilt YieldsBoE's Hogg: MPC Must Be Clear About Its Intentions When Unwinding QE In Order To Avoid An ‘Unintended Move’ In Gilt Yields
9.43am GMT9.43am GMT
09:4309:43
Bank of England's Charlotte Hogg at Treasury CommitteeBank of England's Charlotte Hogg at Treasury Committee
Charlotte Hogg is up before MPs being quizzed about her appointment as the Bank of England’s deputy governor.Charlotte Hogg is up before MPs being quizzed about her appointment as the Bank of England’s deputy governor.
(There is a live link here)(There is a live link here)
BoE's Hogg: ‘GroupThink Is Not Alive And Well’ At BoEBoE's Hogg: ‘GroupThink Is Not Alive And Well’ At BoE
BoE's Hogg Says She Is Able To Challenge BoE’s Carney PubliclyBoE's Hogg Says She Is Able To Challenge BoE’s Carney Publicly
BoE's Hogg: Fwrd Guidance Must Cover Things Like BoE Statements On How To Exit QEBoE's Hogg: Fwrd Guidance Must Cover Things Like BoE Statements On How To Exit QE
She says low interest rates are a global phenomenon and not just in the UK.She says low interest rates are a global phenomenon and not just in the UK.
BoE's Hogg: Structural Elements To Low Interest RatesBoE's Hogg: Structural Elements To Low Interest Rates
UpdatedUpdated
at 9.43am GMTat 9.43am GMT
9.20am GMT9.20am GMT
09:2009:20
Pound flat against dollar and euroPound flat against dollar and euro
The prospect of an imminent US rate rise is supporting the dollar, and putting a dampener on any chance of the pound regaining lost ground.The prospect of an imminent US rate rise is supporting the dollar, and putting a dampener on any chance of the pound regaining lost ground.
Sterling is currently virtually flat at $1.2440 having earlier fallen to $1.2413. Against the euro the pound is down 0.05% at €1.1743.Sterling is currently virtually flat at $1.2440 having earlier fallen to $1.2413. Against the euro the pound is down 0.05% at €1.1743.
9.16am GMT9.16am GMT
09:1609:16
Chances of US rate rise in March increaseChances of US rate rise in March increase
Back with the US, and the chances of an interest rate hike at the Federal Reserve’s March meeting are increasing, whatever Donald Trump may announce about his tax and spending plans.Back with the US, and the chances of an interest rate hike at the Federal Reserve’s March meeting are increasing, whatever Donald Trump may announce about his tax and spending plans.
On Monday, Dallas Fed president Robert Kaplan - who had previously said a rise should come sooner rather than later - clarified his point at a meeting in Oklahoma:On Monday, Dallas Fed president Robert Kaplan - who had previously said a rise should come sooner rather than later - clarified his point at a meeting in Oklahoma:
Sooner rather than later means in the near future.Sooner rather than later means in the near future.
Michael Hewson, chief market analyst at CMC Markets, believes the Fed should get on with it. He said:Michael Hewson, chief market analyst at CMC Markets, believes the Fed should get on with it. He said:
For the last few weeks markets have been weighing up the prospect of whether the US Federal Reserve will look to raise rates at its March meeting.For the last few weeks markets have been weighing up the prospect of whether the US Federal Reserve will look to raise rates at its March meeting.
The odds of a move have fluctuated between lows of 24% at the beginning of February and a peak of 44% in the wake of Fed Chief Janet Yellen’s testimony to US lawmakers on Capitol Hill when she said that it would be “unwise” to wait too long before raising rates.The odds of a move have fluctuated between lows of 24% at the beginning of February and a peak of 44% in the wake of Fed Chief Janet Yellen’s testimony to US lawmakers on Capitol Hill when she said that it would be “unwise” to wait too long before raising rates.
Since that January Fed meeting it has been clear that the US economy has continued to show signs of improvement, and while the probability of a Fed rate rise has now risen to 50%, certain members of the committee appear paralysed by concerns about what the new US President might look to do with respect to his tax and fiscal policy...Since that January Fed meeting it has been clear that the US economy has continued to show signs of improvement, and while the probability of a Fed rate rise has now risen to 50%, certain members of the committee appear paralysed by concerns about what the new US President might look to do with respect to his tax and fiscal policy...
Today the President is due to address a joint session of Congress, and it is clear that we can expect to see him flesh out in greater detail of his new fiscal plans, with the eyes of the markets and the world on him, and with US markets continuing to push to new record highs on an almost daily basis.Today the President is due to address a joint session of Congress, and it is clear that we can expect to see him flesh out in greater detail of his new fiscal plans, with the eyes of the markets and the world on him, and with US markets continuing to push to new record highs on an almost daily basis.
We already know that he intends to spend $54bn on defence and infrastructure whilst making cuts elsewhere to pay for them.We already know that he intends to spend $54bn on defence and infrastructure whilst making cuts elsewhere to pay for them.
Is the US economy so weak that a 25 basis point rise on the upper band from 0.75% to 1% will spook investors? I think not.Is the US economy so weak that a 25 basis point rise on the upper band from 0.75% to 1% will spook investors? I think not.
Fed policymakers have already acknowledged that a substantial fiscal boost in terms of tax cuts could prompt a much sharper policy response which would suggest that irrespective of what Mr Trump announces today higher rates are already needed, so why wait?Fed policymakers have already acknowledged that a substantial fiscal boost in terms of tax cuts could prompt a much sharper policy response which would suggest that irrespective of what Mr Trump announces today higher rates are already needed, so why wait?
9.08am GMT9.08am GMT
09:0809:08
Greggs shares slip after resultsGreggs shares slip after results
Improving its product range - away from just sausage rolls and pasties and on to healthier items - has helped food retailer Greggs beat expectations with its full year figures.Improving its product range - away from just sausage rolls and pasties and on to healthier items - has helped food retailer Greggs beat expectations with its full year figures.
But signs of a slowdown in like-for-like sales so far in the current year have knocked its shares back more than 3% to 980p - albeit they have risen 10% in the past three months.But signs of a slowdown in like-for-like sales so far in the current year have knocked its shares back more than 3% to 980p - albeit they have risen 10% in the past three months.
Overall, profits for 2016 rose 105 to £80.3m, compared to forecasts of around £79m. Like for like sales climbed 4.2%, and while the company said trading in the current year was in line with expectations, like for like sales slowed in the eight weeks to February 25, up 2%. Analyst Darren Shirley at Shore Capital said:Overall, profits for 2016 rose 105 to £80.3m, compared to forecasts of around £79m. Like for like sales climbed 4.2%, and while the company said trading in the current year was in line with expectations, like for like sales slowed in the eight weeks to February 25, up 2%. Analyst Darren Shirley at Shore Capital said:
Current like for like trading in the 8 weeks of the year-to-date has been subdued relative to recent years, with company managed like for like sales up 2.0% (said to be 2.9% excluding the New Year trading pattern), which is said to be inline in-line with management expectations. However, total sales are reported up 5.8% which is ahead of our full year expectation of 4.8%, so Greggs are a little ahead of our expectations at this still early stage of the year.Current like for like trading in the 8 weeks of the year-to-date has been subdued relative to recent years, with company managed like for like sales up 2.0% (said to be 2.9% excluding the New Year trading pattern), which is said to be inline in-line with management expectations. However, total sales are reported up 5.8% which is ahead of our full year expectation of 4.8%, so Greggs are a little ahead of our expectations at this still early stage of the year.
8.28am GMT8.28am GMT
08:2808:28
Another big faller in Moneysupermarket.com, down 11% after its final results.Another big faller in Moneysupermarket.com, down 11% after its final results.
It reported a 16% rise in profits but warned revenues in the current year were below those in 2016, partly due to low interest rates weakening savings and current account switching, and falling trade in the energy business. Liberum analysts said:It reported a 16% rise in profits but warned revenues in the current year were below those in 2016, partly due to low interest rates weakening savings and current account switching, and falling trade in the energy business. Liberum analysts said:
MoneySupermarket has reported 2016 results this morning and given the full year trading update in January there were no surprises with regards to headline numbers. Our concern with Moneysupermarket has always been that revenue growth is linked to marketing spend and therefore margins could come under pressure going forward as competition in the price comparison website space intensifies. These results have realised our concerns, increased marketing spend drove the majority of the 520 basis point decline in gross margins to 74.8%. Trading for 2017 is behind 2016.... management has also guided gross margins to be 73% for 2017 which is 300 basis points below Liberum estimates of 76%.MoneySupermarket has reported 2016 results this morning and given the full year trading update in January there were no surprises with regards to headline numbers. Our concern with Moneysupermarket has always been that revenue growth is linked to marketing spend and therefore margins could come under pressure going forward as competition in the price comparison website space intensifies. These results have realised our concerns, increased marketing spend drove the majority of the 520 basis point decline in gross margins to 74.8%. Trading for 2017 is behind 2016.... management has also guided gross margins to be 73% for 2017 which is 300 basis points below Liberum estimates of 76%.
8.20am GMT8.20am GMT
08:2008:20
Southern Rail operator Go-Ahead slumps 14% after resultsSouthern Rail operator Go-Ahead slumps 14% after results
Bus and train operator Go-Ahead has warned on its outlook, mainly due to the continuing strike actions on Southern Rail.Bus and train operator Go-Ahead has warned on its outlook, mainly due to the continuing strike actions on Southern Rail.
It said its full year expectations were lowered due to “challenges in GTR [which runs the Thameslink, Great Northern, Southern and Gatwick Express rail franchises] and a slowdown in passenger numbers in regional bus.” On the strike, which has inconvenienced and angered commuters for months, it said:It said its full year expectations were lowered due to “challenges in GTR [which runs the Thameslink, Great Northern, Southern and Gatwick Express rail franchises] and a slowdown in passenger numbers in regional bus.” On the strike, which has inconvenienced and angered commuters for months, it said:
Lengthy and significant industrial relations issues at GTR related to the modernisation of working practices, required by the contract, have caused months of disrupted travel. We are working towards a resolution so we can provide a reliable service for customers.Lengthy and significant industrial relations issues at GTR related to the modernisation of working practices, required by the contract, have caused months of disrupted travel. We are working towards a resolution so we can provide a reliable service for customers.
Rail profits for the half year fell by 35% due to the Southern dispute, and the company’s overall profits dropped 11.7% to £67m.Rail profits for the half year fell by 35% due to the Southern dispute, and the company’s overall profits dropped 11.7% to £67m.
Even so, the company has raised its dividend to shareholders by 6.5%, justfied by “stable bus profits.”Even so, the company has raised its dividend to shareholders by 6.5%, justfied by “stable bus profits.”
That has failed to save its share price, however, which is down 14% at £19.66. Analysts at Investec said:That has failed to save its share price, however, which is down 14% at £19.66. Analysts at Investec said:
Go-Ahead has reported half year results broadly in line with our forecasts at the divisional level, with the exception of GTR which was weaker due to industrial action. However, expectations for the full year have been lowered given the slowdown in passenger volumes in Regional Bus, higher insurance costs and additional costs and delays to expected efficiencies for GTR as the industrial action is ongoing. We therefore reduce our forecasts, cut our target price to 2300p and lower our recommendation to add.Go-Ahead has reported half year results broadly in line with our forecasts at the divisional level, with the exception of GTR which was weaker due to industrial action. However, expectations for the full year have been lowered given the slowdown in passenger volumes in Regional Bus, higher insurance costs and additional costs and delays to expected efficiencies for GTR as the industrial action is ongoing. We therefore reduce our forecasts, cut our target price to 2300p and lower our recommendation to add.
Jefferies, which remains a buyer of the shares, has cut its 2017 profit forecast by 4% and its 2018 prediction by 7%.Jefferies, which remains a buyer of the shares, has cut its 2017 profit forecast by 4% and its 2018 prediction by 7%.
8.07am GMT8.07am GMT
08:0708:07
European markets edge higherEuropean markets edge higher
As expected, the record close on Wall Street has given a lift - albeit a slight one - to European shares.As expected, the record close on Wall Street has given a lift - albeit a slight one - to European shares.
The FTSE 100 is up 0.06% in early trading, Germany’s Dax has opened 0.2% higher, France’s Cac has climbed 0.4%, Spain’s Ibex 0.5% and Italy’s FTSE MIB 0.3%.The FTSE 100 is up 0.06% in early trading, Germany’s Dax has opened 0.2% higher, France’s Cac has climbed 0.4%, Spain’s Ibex 0.5% and Italy’s FTSE MIB 0.3%.
7.57am GMT7.57am GMT
07:5707:57
Over in France, and the country’s economy grew by 0.4% in the final quarter last year, in line with initial estimates.Over in France, and the country’s economy grew by 0.4% in the final quarter last year, in line with initial estimates.
So overall for 2016, it grew by 1.1%, also unchanged from the first estimates.So overall for 2016, it grew by 1.1%, also unchanged from the first estimates.
Elsewhere:Elsewhere:
French Consumer Spending (MoM) Jan: 0.60% (est 0.60%; rev prev -1.00%)-(YoY) Jan: 1.40% (est 1.60%; rev prev 1.30%)French Consumer Spending (MoM) Jan: 0.60% (est 0.60%; rev prev -1.00%)-(YoY) Jan: 1.40% (est 1.60%; rev prev 1.30%)
UpdatedUpdated
at 7.59am GMTat 7.59am GMT
7.46am GMT7.46am GMT
07:4607:46
A positive start is expected in Europe after yet another record breaking run in the US:A positive start is expected in Europe after yet another record breaking run in the US:
Our European opening calls:$FTSE 7269 up 16$DAX 11841 up 19$CAC 4855 up 10$IBEX 9485 up 21$MIB 18967 up 53Our European opening calls:$FTSE 7269 up 16$DAX 11841 up 19$CAC 4855 up 10$IBEX 9485 up 21$MIB 18967 up 53
7.45am GMT7.45am GMT
07:4507:45
Agenda: US data due, Osborne at BCC conference, Hogg at Treasury CommitteeAgenda: US data due, Osborne at BCC conference, Hogg at Treasury Committee
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
The US is in focus today, with trade figures for January and the final reading for fourth quarter GDP. The trade deficit is expected to widen to $66bn from $65bn in December, something which is likely to exercise President Trump with his protectionist tendencies. As for GDP, analysts expect an annualised rate of 2.1% for the quarter, up from 1.9%. Overall the US economy is forecast to have grown at 1.6% in 2016, a growth rate Trump’s team have consistenty criticised as too slow.The US is in focus today, with trade figures for January and the final reading for fourth quarter GDP. The trade deficit is expected to widen to $66bn from $65bn in December, something which is likely to exercise President Trump with his protectionist tendencies. As for GDP, analysts expect an annualised rate of 2.1% for the quarter, up from 1.9%. Overall the US economy is forecast to have grown at 1.6% in 2016, a growth rate Trump’s team have consistenty criticised as too slow.
But Republican financial John Bogle, who founded the world’s second largest investment group Vanguard, told the BBC’s Wake up to Money that Trump’s plans to grow the US economy at 4% annually were unlikely to succeed. He said:But Republican financial John Bogle, who founded the world’s second largest investment group Vanguard, told the BBC’s Wake up to Money that Trump’s plans to grow the US economy at 4% annually were unlikely to succeed. He said:
There are certain limits, irrespective of whoever sits in the White House.There are certain limits, irrespective of whoever sits in the White House.
He added that building trade barriers would be madness and reducing immigration would harm the US economy.He added that building trade barriers would be madness and reducing immigration would harm the US economy.
Meanwhile, after the US markets close - at 9pm Washington time, 2am GMT - Trump will be making his long awaited address to Congress with the promise of spelling out some of his plans in detail. We already had a flavour on Monday, with Trump’s talk of increased defence and infrastructure spending, probably at the expense of the environment and foreign aid.Meanwhile, after the US markets close - at 9pm Washington time, 2am GMT - Trump will be making his long awaited address to Congress with the promise of spelling out some of his plans in detail. We already had a flavour on Monday, with Trump’s talk of increased defence and infrastructure spending, probably at the expense of the environment and foreign aid.
But it seems that Trump’s “phenomenal” tax reforms might have to wait. Naeem Aslam, chief market analyst at Think Markets UK, said:But it seems that Trump’s “phenomenal” tax reforms might have to wait. Naeem Aslam, chief market analyst at Think Markets UK, said:
Was there any disappointment yesterday when some details were released ahead of Mr Trump’s most anticipated speech? Well, yes. It turns out that we are not going to receive any details about the anticipated tax plan and the timeframe for said plan is also vague. All we know is that it will happen sometime after a new healthcare bill replacing Obamacare has been introduced, again, something we have yet to receive a date for.Was there any disappointment yesterday when some details were released ahead of Mr Trump’s most anticipated speech? Well, yes. It turns out that we are not going to receive any details about the anticipated tax plan and the timeframe for said plan is also vague. All we know is that it will happen sometime after a new healthcare bill replacing Obamacare has been introduced, again, something we have yet to receive a date for.
This was not something the markets were expecting especially after rousing the rally by describing his tax plans as “phenomenal”. What we saw last night was disappointment across the board when the news hit. But it would be wrong to write off Mr Trump yet, as he is never short of surprises. Despite his lack of information, the market rallied, recording another record high.This was not something the markets were expecting especially after rousing the rally by describing his tax plans as “phenomenal”. What we saw last night was disappointment across the board when the news hit. But it would be wrong to write off Mr Trump yet, as he is never short of surprises. Despite his lack of information, the market rallied, recording another record high.
Indeed, the Dow Jones Industrial Average closed at a record high for the twelfth day in a row, and European markets are expected to open higher as a result.Indeed, the Dow Jones Industrial Average closed at a record high for the twelfth day in a row, and European markets are expected to open higher as a result.
Also on the agenda, the British Chambers of Commerce holds its annual conference in London, with regional development and Brexit on the agenda and appearances scheduled from former chancellor George Osborne, mayoral hopefuls Andy Street and Andy Burnham and shadow chancellor John McDonnell.Also on the agenda, the British Chambers of Commerce holds its annual conference in London, with regional development and Brexit on the agenda and appearances scheduled from former chancellor George Osborne, mayoral hopefuls Andy Street and Andy Burnham and shadow chancellor John McDonnell.
Elsewhere Charlotte Hogg will be at a Treasury committee hearing to discuss her appointment as the Bank of England’s Deputy Governor for Markets and Banking.Elsewhere Charlotte Hogg will be at a Treasury committee hearing to discuss her appointment as the Bank of England’s Deputy Governor for Markets and Banking.
And there are results from Go-Ahead and Greggs.And there are results from Go-Ahead and Greggs.
UpdatedUpdated
at 8.03am GMTat 8.03am GMT