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| Google results and Chinese stimulus plans drive Nasdaq to fresh record high – business live | Google results and Chinese stimulus plans drive Nasdaq to fresh record high – business live |
| (35 minutes later) | |
| Newsflash from Lancashire: Shale gas firm Cuadrilla has been given the green light by government to start fracking at a well between Blackpool and Preston. | |
| This is the first permit granted under the government’s new regulatory regime, and comes despite protests from local residents and anti-fracking campaigners. | |
| Energy minister Claire Perry said shale gas was an important potential new energy source, and she was satisfied Cuadrilla had met the government’s conditions for granting a hydraulic fracturing permit. | |
| “Our world class regulations will ensure that shale exploration will maintain robust environmental standards and meet the expectations of local communities.” | |
| Some in the local community, though, fear that injecting liquid at high pressures into the rock to split it and release hydrocarbons could cause earthquakes and pollute the water supply. | |
| The IMF’s cure for the global economy’s imbalances includes cutting pensions in countries who are borrowing too much. | The IMF’s cure for the global economy’s imbalances includes cutting pensions in countries who are borrowing too much. |
| On the other wide of the coin, it wants saver countries to keep older citizens in the jobs market for longer. | On the other wide of the coin, it wants saver countries to keep older citizens in the jobs market for longer. |
| Newsflash: The International Monetary Fund has warned that the global economy is being destabilised by current account imbalances. | Newsflash: The International Monetary Fund has warned that the global economy is being destabilised by current account imbalances. |
| In a new report, the IMF flags up that some countries are simply saving too much (such as Germany), while others are running persistent deficits (Britain and America). And over time, this is creating dangerous instability. | In a new report, the IMF flags up that some countries are simply saving too much (such as Germany), while others are running persistent deficits (Britain and America). And over time, this is creating dangerous instability. |
| The Fun warns: | The Fun warns: |
| From a global perspective, excess surpluses have been especially large and persistent in a small group of countries, most prominently in Germany and China, and to a lesser extent, in Korea, Netherlands, Sweden and Singapore | From a global perspective, excess surpluses have been especially large and persistent in a small group of countries, most prominently in Germany and China, and to a lesser extent, in Korea, Netherlands, Sweden and Singapore |
| Excess deficits remain mainly in the United States and the United Kingdom, some euro area debtor countries, and a few vulnerable emerging market and developing economies (e.g. Argentina, Turkey). | Excess deficits remain mainly in the United States and the United Kingdom, some euro area debtor countries, and a few vulnerable emerging market and developing economies (e.g. Argentina, Turkey). |
| What are current account imbalances and why do they matter? Find out in the 2018 External Sector Report #ESR https://t.co/qtcS1Rl72t pic.twitter.com/0DJRrR8DfJ | What are current account imbalances and why do they matter? Find out in the 2018 External Sector Report #ESR https://t.co/qtcS1Rl72t pic.twitter.com/0DJRrR8DfJ |
| Donald Trump would surely agree, having made ‘fair trade’ a key plank of his administration. | Donald Trump would surely agree, having made ‘fair trade’ a key plank of his administration. |
| But the IMF aren’t endorsing the White House’s trade war. Instead, it warns that protectionist measures will back fire. | But the IMF aren’t endorsing the White House’s trade war. Instead, it warns that protectionist measures will back fire. |
| Chief economist Maurice Obstfeld says: | Chief economist Maurice Obstfeld says: |
| The persistence of global imbalances and mounting perceptions of an uneven playing field for trade are fueling protectionist sentiment. These impulses are misguided. An escalation of protectionist policies would mainly hurt domestic and global growth, without much of an effect on current account imbalances, as this year’s report also finds. | The persistence of global imbalances and mounting perceptions of an uneven playing field for trade are fueling protectionist sentiment. These impulses are misguided. An escalation of protectionist policies would mainly hurt domestic and global growth, without much of an effect on current account imbalances, as this year’s report also finds. |
| The Fund also warns that Trump’s tax cuts could make the things worse: | The Fund also warns that Trump’s tax cuts could make the things worse: |
| The fiscal easing currently underway in the United States is leading to a tightening in monetary conditions, a stronger US dollar, and a larger US current account deficit. | The fiscal easing currently underway in the United States is leading to a tightening in monetary conditions, a stronger US dollar, and a larger US current account deficit. |
| In the near term, these trends risk aggravating trade tensions, and the resulting faster tightening of global financing conditions, which could prove even more disruptive for emerging market economies, especially those with weak external positions | In the near term, these trends risk aggravating trade tensions, and the resulting faster tightening of global financing conditions, which could prove even more disruptive for emerging market economies, especially those with weak external positions |
| Most of the famous FAANG stocks are bursting ahead today. | Most of the famous FAANG stocks are bursting ahead today. |
| Google/Alphabet is leading the way (+4%), followed by Facebook (+2%), Amazon (+1.7%) and Apple (+0.9%). | Google/Alphabet is leading the way (+4%), followed by Facebook (+2%), Amazon (+1.7%) and Apple (+0.9%). |
| Investors are wagering that Alphabet’s strong results bode well for the current results season (Facebook reports tomorrow, followed by Amazon on Thursday and Apple early next week). | Investors are wagering that Alphabet’s strong results bode well for the current results season (Facebook reports tomorrow, followed by Amazon on Thursday and Apple early next week). |
| Netflix, which missed Wall Street forecasts last week, is lagging behind though. | Netflix, which missed Wall Street forecasts last week, is lagging behind though. |
| Breaking: The Nasdaq stock index has hit a fresh record high at the start of trading in New York. | Breaking: The Nasdaq stock index has hit a fresh record high at the start of trading in New York. |
| Tech giant Alphabet is driving the rally, up 4%, after smashing Wall Street forecasts last night. | Tech giant Alphabet is driving the rally, up 4%, after smashing Wall Street forecasts last night. |
| This helped send the Nasdaq Composite Index up 70 points, or, 0.9%, to 7,912 in early trading. | This helped send the Nasdaq Composite Index up 70 points, or, 0.9%, to 7,912 in early trading. |
| New record high for #tech focused #NASDAQ as Google's numbers help send Alphabet stock surging to it's own record high pic.twitter.com/96eJRTWQgv | New record high for #tech focused #NASDAQ as Google's numbers help send Alphabet stock surging to it's own record high pic.twitter.com/96eJRTWQgv |
| Traders are cheered by the strong earnings from its Google operations (see opening post), which delivered earnings per share of $11.75, compared to forecasts of $9.59 per share. | Traders are cheered by the strong earnings from its Google operations (see opening post), which delivered earnings per share of $11.75, compared to forecasts of $9.59 per share. |
| The broader S&P 500 index has gained 0.75%, while the benchmark Dow Jones industrial average is 0.6% higher. | The broader S&P 500 index has gained 0.75%, while the benchmark Dow Jones industrial average is 0.6% higher. |
| Investors in Europe are also putting their worries about trade wars behind them, pushing shares up in London, Frankfurt and Paris: | Investors in Europe are also putting their worries about trade wars behind them, pushing shares up in London, Frankfurt and Paris: |
| Traders are also cheering China’s new stimulus measures. Beijing’s plan to cut R&D taxes and spur local investment is bolstering optimism in the markets. | Traders are also cheering China’s new stimulus measures. Beijing’s plan to cut R&D taxes and spur local investment is bolstering optimism in the markets. |
| David Madden, market analyst at CMC Markets, says: | David Madden, market analyst at CMC Markets, says: |
| European stock markets are higher in the wake of Beijing’s plans to stimulate the economy. | European stock markets are higher in the wake of Beijing’s plans to stimulate the economy. |
| The Chinese government unveiled plans to boost domestic demand in the face of heightened trade tensions. The second-largest economy in the world has been slowing down in recent years, and the tariffs imposed by the US are making matters worse. The proactive move by the Chinese authorities has lifted investor confidence around the global. | The Chinese government unveiled plans to boost domestic demand in the face of heightened trade tensions. The second-largest economy in the world has been slowing down in recent years, and the tariffs imposed by the US are making matters worse. The proactive move by the Chinese authorities has lifted investor confidence around the global. |
| Bitcoin is also on a tear this morning, as cryptocurrencies rally sharply. | Bitcoin is also on a tear this morning, as cryptocurrencies rally sharply. |
| The Bitcoin price has jumped by 6% this morning to $8,175 on the Luxembourg Bitstamp exchange, extending its recent rally. | The Bitcoin price has jumped by 6% this morning to $8,175 on the Luxembourg Bitstamp exchange, extending its recent rally. |
| The digital currency has now surged by a third in the last 10 days, having fallen sharply from around $20,000 at the start of the year. | The digital currency has now surged by a third in the last 10 days, having fallen sharply from around $20,000 at the start of the year. |
| Lukman Otunuga, research analyst at FXTM, suggests that the Bitcoin bulls have been lured out of hibernation, and could push bitcoin towards $10,000 | Lukman Otunuga, research analyst at FXTM, suggests that the Bitcoin bulls have been lured out of hibernation, and could push bitcoin towards $10,000 |
| An inflow of positive news over the past few weeks regarding cryptocurrencies has revived investor appetite for Bitcoin and this can be reflected in the bullish price action. Goldman Sachs and BlackRock have expressed interest in the cryptocurrency markets while the Financial Services Board declared that they do not pose a threat to the global financial system. | An inflow of positive news over the past few weeks regarding cryptocurrencies has revived investor appetite for Bitcoin and this can be reflected in the bullish price action. Goldman Sachs and BlackRock have expressed interest in the cryptocurrency markets while the Financial Services Board declared that they do not pose a threat to the global financial system. |
| With this renewed sense of optimism over cryptocurrencies attracting investors from all directions, further upside could be on the cards in the near term. | With this renewed sense of optimism over cryptocurrencies attracting investors from all directions, further upside could be on the cards in the near term. |
| Alphabet shares are expected to jump around 4% when Wall Street trading begin in 45 minutes, after the tech giant beat revenue and earnings targets last night. | Alphabet shares are expected to jump around 4% when Wall Street trading begin in 45 minutes, after the tech giant beat revenue and earnings targets last night. |
| Alphabet could surge to an all-time high as Wall Street says the internet giant's big bets are "paying off." https://t.co/c8DBcPyLCM pic.twitter.com/cPqEEGU1NW | Alphabet could surge to an all-time high as Wall Street says the internet giant's big bets are "paying off." https://t.co/c8DBcPyLCM pic.twitter.com/cPqEEGU1NW |
| In the old days, world leaders would prepare for a visiting politician by getting the red carpet swept, and perhaps organising a banquet. | In the old days, world leaders would prepare for a visiting politician by getting the red carpet swept, and perhaps organising a banquet. |
| Times change, though (and not always for the better). So president Trump has limbered up for his meeting with EC president Jean-Claude Juncker tomorrow with another blast about trade. | Times change, though (and not always for the better). So president Trump has limbered up for his meeting with EC president Jean-Claude Juncker tomorrow with another blast about trade. |
| Countries that have treated us unfairly on trade for years are all coming to Washington to negotiate. This should have taken place many years ago but,as the saying goes, better late than never! | Countries that have treated us unfairly on trade for years are all coming to Washington to negotiate. This should have taken place many years ago but,as the saying goes, better late than never! |
| Tariffs are the greatest! Either a country which has treated the United States unfairly on Trade negotiates a fair deal, or it gets hit with Tariffs. It’s as simple as that - and everybody’s talking! Remember, we are the “piggy bank” that’s being robbed. All will be Great! | Tariffs are the greatest! Either a country which has treated the United States unfairly on Trade negotiates a fair deal, or it gets hit with Tariffs. It’s as simple as that - and everybody’s talking! Remember, we are the “piggy bank” that’s being robbed. All will be Great! |
| Tomorrow’s meeting between Juncker and Trump could be heated. | Tomorrow’s meeting between Juncker and Trump could be heated. |
| The EC would like to dial down the trade tensions with the US, which has already threatened to impose tariffs on European car imports. But Juncker may struggle to persuade his host that tariffs are counter-productive, and will hurt US consumers and cost jobs. | The EC would like to dial down the trade tensions with the US, which has already threatened to impose tariffs on European car imports. But Juncker may struggle to persuade his host that tariffs are counter-productive, and will hurt US consumers and cost jobs. |
| The two sides have already fired shots in the trade wars; America hit Europe with 25% tariffs on steel imports, prompting new levies on US goods such as jeans and orange juice. | The two sides have already fired shots in the trade wars; America hit Europe with 25% tariffs on steel imports, prompting new levies on US goods such as jeans and orange juice. |
| But despite all the noise, the two sides actually have fairly low trade barriers. | But despite all the noise, the two sides actually have fairly low trade barriers. |
| As Chris Giles wrote in the Financial Times today: | As Chris Giles wrote in the Financial Times today: |
| Even though some trade is deterred by specific high tariffs on both sides of the Atlantic, the average weighted tariffs applied by the EU on US goods were 3 per cent in 2015, a little lower than the US equivalent of 3.3 per cent in the same year. | Even though some trade is deterred by specific high tariffs on both sides of the Atlantic, the average weighted tariffs applied by the EU on US goods were 3 per cent in 2015, a little lower than the US equivalent of 3.3 per cent in the same year. |
| City economist Timothy Ash thinks the Turkish central bank blundered today by not hiking interest rates: | City economist Timothy Ash thinks the Turkish central bank blundered today by not hiking interest rates: |
| Turkey - hard for the CBRT to explain its decision not to hike today. June inflation rose over 300bps in YOY terms. They just undid any of the good work that Albayrak might have done over the past week in trying to rebuild the confidence of the market. | Turkey - hard for the CBRT to explain its decision not to hike today. June inflation rose over 300bps in YOY terms. They just undid any of the good work that Albayrak might have done over the past week in trying to rebuild the confidence of the market. |
| Yikes! The Turkish lira is tumbling after the country’s central bank surprisingly left interest rates on hold. | Yikes! The Turkish lira is tumbling after the country’s central bank surprisingly left interest rates on hold. |
| The financial markets had widely expected a rate hike today, of at least one percentage point. Instead, the Turkish central bank left borrowing costs unchanged at 17.75%, despite concerns over high inflation and the weak currency. | The financial markets had widely expected a rate hike today, of at least one percentage point. Instead, the Turkish central bank left borrowing costs unchanged at 17.75%, despite concerns over high inflation and the weak currency. |
| The move dealt the lira another blow, wiping 3% off its value against the US dollar. | The move dealt the lira another blow, wiping 3% off its value against the US dollar. |
| Lira takes a dive after Central Bank of Turkey keeps rate on hold, Markets had expected a 100bp hike pic.twitter.com/A6ioV5Zx4V | Lira takes a dive after Central Bank of Turkey keeps rate on hold, Markets had expected a 100bp hike pic.twitter.com/A6ioV5Zx4V |
| The decision will fuel concerns that president Erdogan is undermining central bank independence, as he pushes for lower interest rates. He has just promoted his son-in-law to a top role overseeing the Turkish economy. | The decision will fuel concerns that president Erdogan is undermining central bank independence, as he pushes for lower interest rates. He has just promoted his son-in-law to a top role overseeing the Turkish economy. |
| London’s taxi drivers have been pushing back against ride-hail app Uber for years, holding protests and demanding for tighter regulation. | London’s taxi drivers have been pushing back against ride-hail app Uber for years, holding protests and demanding for tighter regulation. |
| But now, they are taking their fight to a higher level - considering suing Uber for more than a billion pounds of lost earnings. | But now, they are taking their fight to a higher level - considering suing Uber for more than a billion pounds of lost earnings. |
| Sky News’s Mark Kleinman has the details: | Sky News’s Mark Kleinman has the details: |
| London’s army of black cab drivers are drawing up a stunning plot to sue Uber for more than £1bn weeks after the ride-hailing app won a 15-month extension to its licence to operate in the capital. | London’s army of black cab drivers are drawing up a stunning plot to sue Uber for more than £1bn weeks after the ride-hailing app won a 15-month extension to its licence to operate in the capital. |
| Sky News has learnt that the Licensed Taxi Drivers’ Association (LTDA), which has 11,000 members in London, has engaged the leading law firm Mishcon de Reya to explore the potential for a massive legal claim against Uber. | Sky News has learnt that the Licensed Taxi Drivers’ Association (LTDA), which has 11,000 members in London, has engaged the leading law firm Mishcon de Reya to explore the potential for a massive legal claim against Uber. |
| Sources said on Tuesday that if the case proceeded, the LTDA was expected to argue that all 25,000 black cab drivers in London had suffered lost earnings averaging around £10,000 for at least five years as a consequence of failings in the way Uber had operated. | Sources said on Tuesday that if the case proceeded, the LTDA was expected to argue that all 25,000 black cab drivers in London had suffered lost earnings averaging around £10,000 for at least five years as a consequence of failings in the way Uber had operated. |
| At that level, the overall compensation bill could total £1.25bn. | At that level, the overall compensation bill could total £1.25bn. |
| Last September, Uber learned it was losing its licence after Transport for London concluded it wasn’t a “fit and proper’ operator. That forced the firm to tighten up its practices, including the reporting of criminal offences and carrying out background checks on drivers. | Last September, Uber learned it was losing its licence after Transport for London concluded it wasn’t a “fit and proper’ operator. That forced the firm to tighten up its practices, including the reporting of criminal offences and carrying out background checks on drivers. |
| TfL then granted Uber a new probationary licence last month, after the firm passed several inspections. | TfL then granted Uber a new probationary licence last month, after the firm passed several inspections. |
| Back in the markets, and Chinese stocks have surged after Beijing announced new fiscal measures to stimulate its economy. | Back in the markets, and Chinese stocks have surged after Beijing announced new fiscal measures to stimulate its economy. |
| Overnight, China’s government rolled out a mixture of tax cuts and infrastructure spending to tackle the “uncertainty” hurting its economy. | Overnight, China’s government rolled out a mixture of tax cuts and infrastructure spending to tackle the “uncertainty” hurting its economy. |
| The People’s Bank of China also acted, pumping $74bn into China’s banking system to prevent credit drying up. | The People’s Bank of China also acted, pumping $74bn into China’s banking system to prevent credit drying up. |
| Premier Li Keqiang said it was important to “preserve economic activity within a reasonable range”, as the cabinet agreed tax cuts for company research and development projects. | Premier Li Keqiang said it was important to “preserve economic activity within a reasonable range”, as the cabinet agreed tax cuts for company research and development projects. |
| China’s government will also accelerate the issuance of new bonds to finance local government building projects, and promote privately funded transport, oil and gas, and telecommunications projects. | China’s government will also accelerate the issuance of new bonds to finance local government building projects, and promote privately funded transport, oil and gas, and telecommunications projects. |
| ANZ economists Raymond Yeung and Betty Wang said in a note. | ANZ economists Raymond Yeung and Betty Wang said in a note. |
| “The government is sending a clear signal that it is preparing to defend growth, ... Premier Li may be concerned about the negative impact of deleveraging on growth,” | “The government is sending a clear signal that it is preparing to defend growth, ... Premier Li may be concerned about the negative impact of deleveraging on growth,” |
| The move comes just days after China’s growth rate dipped. It follows rising trade tensions with America, and Donald Trump’s threat to impose tariffs on all Chinese imports. | The move comes just days after China’s growth rate dipped. It follows rising trade tensions with America, and Donald Trump’s threat to impose tariffs on all Chinese imports. |
| After months of losses, investors hailed the news. Shares jumped in Shanghai, sending the benchmark index up 1.5% - making its best three-day run in two years. | After months of losses, investors hailed the news. Shares jumped in Shanghai, sending the benchmark index up 1.5% - making its best three-day run in two years. |
| Chinese stocks just clocked in their best 3-day gain since 2016. #Yay #加油 pic.twitter.com/w3yDwjR2ZI | Chinese stocks just clocked in their best 3-day gain since 2016. #Yay #加油 pic.twitter.com/w3yDwjR2ZI |