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| Stock markets at record levels, but UK car industry hit by job cuts - business live | Stock markets at record levels, but UK car industry hit by job cuts - business live |
| (35 minutes later) | |
| Britain’s car industry has just been dealt two pieces of bad news. | |
| Firstly, auto group PSA is cutting an extra 250 jobs at its Vauxhall factory at Ellesmere Port, in the North West of England. | |
| This takes the total headcount cuts to 750. | |
| In a statement, Vauxhall says: | |
| “At a meeting held on Thursday 4 January 2018 between representatives from Vauxhall Motors and UNITE the Union, the company explained that although the initial voluntary separation programme at its Ellesmere Port plant announced in October (aligned to adjustment of production volumes in order to protect its future) has been successful, it needs to initiate a further voluntary programme for eligible employees of a further 250 heads in the period from April to the end of September 2018.” | |
| The Ellesmere Port, which produces the Vauxhall Astra, has been hit by falling demand. PSA has also warned that Brexit uncertainty will also affect investment decisions. | |
| PSA, which also owns Peugeot, says it remains committed to the Ellesmere Port site - but dropped a heavy hint that future improvements are needed. | |
| “Vauxhall Management affirmed the company’s continued commitment to the Astra plant at Ellesmere Port. | |
| “The company remains confident in the ability of the Ellesmere Port workforce to deliver the necessary improvements in financial performance.” | |
| Secondly, rival carmaker Jaguar Landrover has warned that the UK economy is tough. | |
| JLR says it achieved record worldwide sales last year, up 7% to 621,109 vehicles, thanks to strong demand in China and the US. Britain, though, is more problematic. | |
| Group sales operations director Andy Goss says: | |
| “We have once again delivered year-on-year sales increases thanks to a world-class product range and new models such as the E-PACE and Velar, as well as China-specific models such as the XFL. | |
| “But we are facing tough times in key markets such as the UK where consumer confidence and diesel taxes will hit us.” | |
| Last week, the car industry reported that sales fell by 5.7% last year, with further declines expected in 2018..... | |
| Take note, bullish investors. | Take note, bullish investors. |
| Bloomberg’s Luke Kawa has calculated that several major stock market indices have now surged to levels that suggest they are ‘overbought’. That’s often (but not always) a prelude to a correction. | Bloomberg’s Luke Kawa has calculated that several major stock market indices have now surged to levels that suggest they are ‘overbought’. That’s often (but not always) a prelude to a correction. |
| Kawa explains: | Kawa explains: |
| The S&P 500 Index, MSCI Asia Pacific Index, MSCI World Index, Nikkei 225 Index, and MSCI Emerging Markets Index are all in overbought territory, while the Euro Stoxx 600 Index lingers just shy of such a level. | The S&P 500 Index, MSCI Asia Pacific Index, MSCI World Index, Nikkei 225 Index, and MSCI Emerging Markets Index are all in overbought territory, while the Euro Stoxx 600 Index lingers just shy of such a level. |
| The average reading for this collection of gauges soared to a weekly record as of Jan. 5, according to data compiled by Bloomberg going back to 1988. | The average reading for this collection of gauges soared to a weekly record as of Jan. 5, according to data compiled by Bloomberg going back to 1988. |
| The relative strength index is a technical indicator that tracks the magnitude and speed of price fluctuations. Typically, a security with an RSI above 70 is considered to be overbought, while those below 30 are viewed as oversold. | The relative strength index is a technical indicator that tracks the magnitude and speed of price fluctuations. Typically, a security with an RSI above 70 is considered to be overbought, while those below 30 are viewed as oversold. |
| The New York stock market has opened without major drama. | The New York stock market has opened without major drama. |
| In early trading, the Dow Jones industrial average and the S&P 500 indices have both dipped by 0.1%. | In early trading, the Dow Jones industrial average and the S&P 500 indices have both dipped by 0.1%. |
| In other news... the former executive chairman of auto repair and insurance group AA is bringing legal action over his sacking last year, following a bust-up with a colleague. | In other news... the former executive chairman of auto repair and insurance group AA is bringing legal action over his sacking last year, following a bust-up with a colleague. |
| Bob Mackenzie lost his job - and share options worth millions of pounds - after reportedly starting a ‘physical altercation’ in a hotel bar, which triggered his dismissal. | Bob Mackenzie lost his job - and share options worth millions of pounds - after reportedly starting a ‘physical altercation’ in a hotel bar, which triggered his dismissal. |
| The Press Association has the story: | The Press Association has the story: |
| AA has said it is “astonished” over news that ousted chairman Bob Mackenzie is pushing for an employment tribunal hearing after being fired over gross misconduct last summer. | AA has said it is “astonished” over news that ousted chairman Bob Mackenzie is pushing for an employment tribunal hearing after being fired over gross misconduct last summer. |
| The breakdown recovery and car insurance firm may now be forced to defend its decision to sack Mr Mackenzie - a move that was formally announced in August. | The breakdown recovery and car insurance firm may now be forced to defend its decision to sack Mr Mackenzie - a move that was formally announced in August. |
| AA said in a statement: “We are astonished that Mr Mackenzie is taking this to an employment tribunal. | AA said in a statement: “We are astonished that Mr Mackenzie is taking this to an employment tribunal. |
| “We stand by our decision to dismiss him for gross misconduct following his sustained and violent assault on another employee of the AA, and will robustly defend any action.” | “We stand by our decision to dismiss him for gross misconduct following his sustained and violent assault on another employee of the AA, and will robustly defend any action.” |
| Reports have linked his dismissal to an attempted spin-off of the AA’s insurance arm, which led to a physical altercation between Mr Mackenzie and insurance chief Michael Lloyd, as well as an earlier altercation in a public place with someone not thought to be an employee of the company. | Reports have linked his dismissal to an attempted spin-off of the AA’s insurance arm, which led to a physical altercation between Mr Mackenzie and insurance chief Michael Lloyd, as well as an earlier altercation in a public place with someone not thought to be an employee of the company. |
| AA has since called on Mr Mackenzie to pay back more than £1.2m, accounting for annual bonuses stretching from 2016 to 2017. | AA has since called on Mr Mackenzie to pay back more than £1.2m, accounting for annual bonuses stretching from 2016 to 2017. |
| No change at the top of Britain’s finance ministry: | No change at the top of Britain’s finance ministry: |
| Philip Hammond MP remains Chancellor of the Exchequer @HMTreasury #CabinetReshuffle pic.twitter.com/ce2eZL9ASX | Philip Hammond MP remains Chancellor of the Exchequer @HMTreasury #CabinetReshuffle pic.twitter.com/ce2eZL9ASX |
| It’s been another lively day in the world of crypto-currencies. | It’s been another lively day in the world of crypto-currencies. |
| Bitcoin has tumbled by over 9%, taking its value back down to $14,650. Three weeks ago hit an all-time peak of nearly $20,000 before retracing its steps. | Bitcoin has tumbled by over 9%, taking its value back down to $14,650. Three weeks ago hit an all-time peak of nearly $20,000 before retracing its steps. |
| But other digital currencies are in vogue, including Ether (the coin behind the Ethereum distributed app platform). | But other digital currencies are in vogue, including Ether (the coin behind the Ethereum distributed app platform). |
| Crypto update:#BITCOIN 14933.94 -11.24%#ETHER 1109.41 +16.08%#BITCOINCASH 2376.00 -0.03%#RIPPLE 2.424 -4.53%#cryptocurrency#BTC #ETH #BCH #XRP | Crypto update:#BITCOIN 14933.94 -11.24%#ETHER 1109.41 +16.08%#BITCOINCASH 2376.00 -0.03%#RIPPLE 2.424 -4.53%#cryptocurrency#BTC #ETH #BCH #XRP |
| The crypto boom has also pushed dogecoin to a fresh record high - even though this particular digital coin was created as a spoof. | The crypto boom has also pushed dogecoin to a fresh record high - even though this particular digital coin was created as a spoof. |
| The FT’s Alice Woodhouse explains: | The FT’s Alice Woodhouse explains: |
| Dogecoin, the cryptocurrency based on an internet meme of a Shiba Inu dog, almost doubled in value over the weekend, bringing its market capitalisation to more than $2bn on Sunday. | Dogecoin, the cryptocurrency based on an internet meme of a Shiba Inu dog, almost doubled in value over the weekend, bringing its market capitalisation to more than $2bn on Sunday. |
| Launched as a joke digital currency in late 2013 by self-described “data geek” Jackson Palmer, Dogecoin describes itself as the “fun and friendly internet currency”. The digital currency’s recent gains suggest it has been caught up in the recent investor frenzy for cryptocurrencies such as Bitcoin. | Launched as a joke digital currency in late 2013 by self-described “data geek” Jackson Palmer, Dogecoin describes itself as the “fun and friendly internet currency”. The digital currency’s recent gains suggest it has been caught up in the recent investor frenzy for cryptocurrencies such as Bitcoin. |
| Such crypto, many value: the market cap of joke cryptocurrency Dogecoin surpasses $2bn https://t.co/aLXOZoalgt pic.twitter.com/tqij0uQP4o | Such crypto, many value: the market cap of joke cryptocurrency Dogecoin surpasses $2bn https://t.co/aLXOZoalgt pic.twitter.com/tqij0uQP4o |
| Credit rating agency Fitch has added to the optimistic mood in the markets, by reporting that the outlook for credit is the best in a decade. | Credit rating agency Fitch has added to the optimistic mood in the markets, by reporting that the outlook for credit is the best in a decade. |
| Fitch reports that the number of likely credit upgrades in 2018 and 2019 outnumbers potential downgrades by the most since 2008. | Fitch reports that the number of likely credit upgrades in 2018 and 2019 outnumbers potential downgrades by the most since 2008. |
| But it also warns that this may be as good as it gets - some companies could find it harder to service their debts once interest rates rise higher. | But it also warns that this may be as good as it gets - some companies could find it harder to service their debts once interest rates rise higher. |
| Monica Insoll, a Fitch managing director, explains: | Monica Insoll, a Fitch managing director, explains: |
| “The rating outlook trend is the most upbeat in a decade, with positive outlooks outnumbering negatives. But the net bias is only just over 1% and occurs as the world is about to hit peak growth in the current cycle. | “The rating outlook trend is the most upbeat in a decade, with positive outlooks outnumbering negatives. But the net bias is only just over 1% and occurs as the world is about to hit peak growth in the current cycle. |
| The continued tightening of monetary policy, together with significant policy and political uncertainty, is likely to pose increasing challenges to ratings.” | The continued tightening of monetary policy, together with significant policy and political uncertainty, is likely to pose increasing challenges to ratings.” |
| The futures market suggests the US stock market will hold onto Friday night’s record highs, when trading begins in an hour. | The futures market suggests the US stock market will hold onto Friday night’s record highs, when trading begins in an hour. |
| US Opening Calls:#DOW 25277 -0.05%#SPX 2737 -0.16%#NASDAQ 6643 -0.10%#IGOpeningCall | US Opening Calls:#DOW 25277 -0.05%#SPX 2737 -0.16%#NASDAQ 6643 -0.10%#IGOpeningCall |
| Over in Germany, acting chancellor Angela Merkel has entered coalition talks with the left-leaning Social Democrats. | Over in Germany, acting chancellor Angela Merkel has entered coalition talks with the left-leaning Social Democrats. |
| It looks like a final attempt to form a new government, following last autumn’s inconclusive election. | It looks like a final attempt to form a new government, following last autumn’s inconclusive election. |
| Reaching an agreement could be tough; the SPD are likely to demand concessions on issues like welfare spending, tax, and European integration. | Reaching an agreement could be tough; the SPD are likely to demand concessions on issues like welfare spending, tax, and European integration. |
| But optimism that a deal is possible is helping the market today, says Mike van Dulken, head of Research at Accendo Markets: | But optimism that a deal is possible is helping the market today, says Mike van Dulken, head of Research at Accendo Markets: |
| “Equities are off their best levels but maintain a northerly bearing, buoyed by German coalition talks and fresh highs on Wall St, despite mixed Eurozone macro data and commodities off their best levels. | “Equities are off their best levels but maintain a northerly bearing, buoyed by German coalition talks and fresh highs on Wall St, despite mixed Eurozone macro data and commodities off their best levels. |
| A stronger US dollar helps, pushing the British pound and the euro lower, especially the latter to ensure the German DAX outperforms the UK FTSE. | A stronger US dollar helps, pushing the British pound and the euro lower, especially the latter to ensure the German DAX outperforms the UK FTSE. |
| US futures point to another positive opening this afternoon. | US futures point to another positive opening this afternoon. |
| Over in Athens, prime minister Alexis Tsipras has told his first cabinet meeting of the year that Greece is in the “final stretch” of its third bailout programme. | Over in Athens, prime minister Alexis Tsipras has told his first cabinet meeting of the year that Greece is in the “final stretch” of its third bailout programme. |
| Helena Smith reports from Athens | Helena Smith reports from Athens |
| The leftist leader told cabinet members that he expected the debt-stricken country, under international surveillance since 2010, to return to international markets after its current economic adjustment program officially expires in August. | The leftist leader told cabinet members that he expected the debt-stricken country, under international surveillance since 2010, to return to international markets after its current economic adjustment program officially expires in August. |
| Sounding an optimistic note, Tsipras described 2018 as a landmark year that would be replete with challenge, adding: | Sounding an optimistic note, Tsipras described 2018 as a landmark year that would be replete with challenge, adding: |
| “2018 is a milestone year ... a year full of challenges that in order to be met require hard work so that this can also be a year of vindication for the sacrifices of the Greek people.” | “2018 is a milestone year ... a year full of challenges that in order to be met require hard work so that this can also be a year of vindication for the sacrifices of the Greek people.” |
| The third - and penultimate - compliance review of terms agreed in exchange for emergency funding under Greece’s latest bailout was reaching conclusion, the prime minister told his cabinet. | The third - and penultimate - compliance review of terms agreed in exchange for emergency funding under Greece’s latest bailout was reaching conclusion, the prime minister told his cabinet. |
| When Athens enters “the last chapter” of fiscal adjustment Greece will have closed a “huge circle of supervision which began in May 2010 when the country was excluded from money markets,” he said. | When Athens enters “the last chapter” of fiscal adjustment Greece will have closed a “huge circle of supervision which began in May 2010 when the country was excluded from money markets,” he said. |
| A multi-bill outlining almost 100 agreed reforms known as “prior actions” will be submitted to parliament tomorrow ahead of a three-day debate. | A multi-bill outlining almost 100 agreed reforms known as “prior actions” will be submitted to parliament tomorrow ahead of a three-day debate. |
| Leading members of Tsipras’ leftist Syriza party have voiced opposition to some of the more onerous measures, such as electronic auctions of property owners who are indebted to banks. | Leading members of Tsipras’ leftist Syriza party have voiced opposition to some of the more onerous measures, such as electronic auctions of property owners who are indebted to banks. |
| Sterling has made a subdued start to the week, as traders watch Theresa May reshuffle her cabinet. | Sterling has made a subdued start to the week, as traders watch Theresa May reshuffle her cabinet. |
| The pound dropped 0.2% to $1.354 against the US dollar, but has risen a little against the euro to €1.13. | The pound dropped 0.2% to $1.354 against the US dollar, but has risen a little against the euro to €1.13. |
| The cabinet reshuffle could have implications for Brexit; according to the Daily Telegraph, the PM will appoint “a cabinet minister for no-deal”, who will prepare for a Hard Brexit. | The cabinet reshuffle could have implications for Brexit; according to the Daily Telegraph, the PM will appoint “a cabinet minister for no-deal”, who will prepare for a Hard Brexit. |
| Royal Bank of Canada say: | Royal Bank of Canada say: |
| The UK papers are full with reports of a pending cabinet reshuffle of May’s government. | The UK papers are full with reports of a pending cabinet reshuffle of May’s government. |
| The most interesting development for markets seems the planned creation of a ‘minister for no-deal Brexit’ which should underpin the notion of the UK being in a position to walk away from the negotiations with the EU. | The most interesting development for markets seems the planned creation of a ‘minister for no-deal Brexit’ which should underpin the notion of the UK being in a position to walk away from the negotiations with the EU. |
| The reshuffle is getting up to speed now, with Northern Ireland secretary James Brokenshire resigning on health grounds, and confusion over whether transport secretary Chris Grayling has been moved to become Conservative Party chairman. | The reshuffle is getting up to speed now, with Northern Ireland secretary James Brokenshire resigning on health grounds, and confusion over whether transport secretary Chris Grayling has been moved to become Conservative Party chairman. |
| #Reshuffle latest: The Conservative party has tweeted, then deleted, an announcement Chris Grayling is to be named its new party chairman, says @CatNeilan https://t.co/HWNFFM5bet pic.twitter.com/WHlGKVwEed | #Reshuffle latest: The Conservative party has tweeted, then deleted, an announcement Chris Grayling is to be named its new party chairman, says @CatNeilan https://t.co/HWNFFM5bet pic.twitter.com/WHlGKVwEed |
| BBC confirming Grayling appointment but advisers saying its speculation and he hasn't been to no10 yet. The Conservatives had tweeted a congrats, though its now disappeared. What is going on!? pic.twitter.com/8GDc0RE4kS | BBC confirming Grayling appointment but advisers saying its speculation and he hasn't been to no10 yet. The Conservatives had tweeted a congrats, though its now disappeared. What is going on!? pic.twitter.com/8GDc0RE4kS |
| My colleague Andrew Sparrow has full details in his Politics Live blog: | My colleague Andrew Sparrow has full details in his Politics Live blog: |
| World stock markets are celebrating their best start to a new year since 2010 this morning. | World stock markets are celebrating their best start to a new year since 2010 this morning. |
| European shares are doing their bit, having hit their highest level since August 2015 this morning, after Asia rallied to near-record levels. | European shares are doing their bit, having hit their highest level since August 2015 this morning, after Asia rallied to near-record levels. |
| Traders are encouraged by this morning’s strong consumer confidence and investor sentiment survey, which suggests the eurozone economy is continuing to flourish. | Traders are encouraged by this morning’s strong consumer confidence and investor sentiment survey, which suggests the eurozone economy is continuing to flourish. |
| Dennis de Jong, managing director at UFX.com, sees no sign of ‘January Blues’ in the markets today: | Dennis de Jong, managing director at UFX.com, sees no sign of ‘January Blues’ in the markets today: |
| “All the key indicators for December show that confidence amongst investors and consumers is firmly on the rise, which only increases the likelihood of the European Central Bank winding down its quantitative easing programme. | “All the key indicators for December show that confidence amongst investors and consumers is firmly on the rise, which only increases the likelihood of the European Central Bank winding down its quantitative easing programme. |
| “After being in the doldrums for so long, the eurozone has rebounded in spectacular fashion, with investors piling into the euro in their droves. | “After being in the doldrums for so long, the eurozone has rebounded in spectacular fashion, with investors piling into the euro in their droves. |
| In another piece of encouraging soft data, the European Commission’s economic confidence index has hit its highest level since 2000. | In another piece of encouraging soft data, the European Commission’s economic confidence index has hit its highest level since 2000. |
| The sentiment index has risen to 116, beating forecasts of 114.8, showing that the pick-up in Europe’s economy has raised morale in the region. | The sentiment index has risen to 116, beating forecasts of 114.8, showing that the pick-up in Europe’s economy has raised morale in the region. |
| Euro-area economic confidence soars to nearly two-decade high https://t.co/IVjrdL1TTj pic.twitter.com/JCyBcgTrHD | Euro-area economic confidence soars to nearly two-decade high https://t.co/IVjrdL1TTj pic.twitter.com/JCyBcgTrHD |
| Euro area starting 2018 with a bang. EC Economic Sentiment Index now highest since 2000. | Euro area starting 2018 with a bang. EC Economic Sentiment Index now highest since 2000. |
| Just in: Investor optimism across the eurozone has risen, in the latest sign of confidence in the global economy. | Just in: Investor optimism across the eurozone has risen, in the latest sign of confidence in the global economy. |
| The monthly survey of investor morale produced by research group Sentix jumped to 32.9, up from December’s 31.1. | The monthly survey of investor morale produced by research group Sentix jumped to 32.9, up from December’s 31.1. |
| When asked about the current economic situation, investors were at their most upbeat since 2007. | When asked about the current economic situation, investors were at their most upbeat since 2007. |
| This optimism underlines why stock markets have been rallying recently, as investors react to signs that economic growth is picking. | This optimism underlines why stock markets have been rallying recently, as investors react to signs that economic growth is picking. |
| Sentix says: | Sentix says: |
| “The economy in all regions of the world is looking stable and positive and is showing moderate improvements.... | “The economy in all regions of the world is looking stable and positive and is showing moderate improvements.... |
| “The upturn is therefore broad and synchronous. The likelihood of possible overheating is rising.” | “The upturn is therefore broad and synchronous. The likelihood of possible overheating is rising.” |
| EuroZone Jan Sentix Investor Confidence comes in at 32.9 (f'cast 31.2) vs 31.1 in Dec | EuroZone Jan Sentix Investor Confidence comes in at 32.9 (f'cast 31.2) vs 31.1 in Dec |