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You can find the current article at its original source at https://www.theguardian.com/business/live/2017/jul/14/investors-cheered-as-us-rate-hike-expectations-fade-business-live
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| Investor relief as US rate hike expectations fade - business live | Investor relief as US rate hike expectations fade - business live |
| (about 1 hour later) | |
| 12.21pm BST | |
| 12:21 | |
| The pound is up against both the dollar and the euro. | |
| It hit an 11-day high against the dollar, at $1.2984, up 0.3%. | |
| Sterling is up 0.2% against the euro at €1.1365. | |
| 12.17pm BST | |
| 12:17 | |
| JP Morgan beats Q2 expectations | |
| JP Morgan Chase has kicked off the US banks reporting season for the second quarter with better than expected results. | |
| The biggest US bank by assets reported a 13.4% increase in quarterly profits, as gains from higher interest rates offset a drop in bond trading. | |
| Net income rose to $7.03bn in the second quarter ended 30 June, from $6.2bn a year earlier. Earnings per share rose to $1.82 from $1.55, beating analysts’ expectations. | |
| Revenue of $26.4bn was also better than expected. | |
| Jamie Dimon, chairman and chief executive, commented on the figures: | |
| We continued to post very solid results against a stable-to- improving global economic backdrop. The US consumer remains healthy, evidenced in our strong underlying performance in consumer and community banking. Loans and deposits continue to grow strongly, and card sales and merchant processing volumes were up double digits. | |
| We are also pleased to announce increases to our capital return plans while continuing to invest in our businesses for long-term profitability – reflecting the financial strength of our company and the significant capital and liquidity improvements we have made over the past several years. | |
| Citigroup and Wells Fargo are also expected to report today. | |
| Updated | |
| at 12.23pm BST | |
| 11.49am BST | |
| 11:49 | |
| European new car sales highest in a decacde | |
| Roughly 1.5m new cars were sold in Europe in June, 2.1% more than the same month last year and the highest number since June 2007, just before the global crisis struck a blow to the industry. | |
| The figures from the European Automobile Manufacturers Association show that the wider European market is outperforming the UK, where new car sales fell for a third month in June. | |
| Volkswagen is the most popular brand in Europe. | |
| Here is the car sales performance in the top five European economies in June: | |
| Italy: +12.9% | |
| Spain: +6.5% | |
| France: +1.6% | |
| Germany: -3.5% | |
| UK: -4.8% | |
| Over the first half of 2017, new car sales in Europe rose 4.7% to more than 8 million: | |
| Italy: +8.9% | |
| Spain: +7.1% | |
| Germany: +3.1% | |
| France: +3% | |
| UK: -1.3% | |
| 11.10am BST | 11.10am BST |
| 11:10 | 11:10 |
| Eurozone trade booms in May | Eurozone trade booms in May |
| Eurozone trade was in good shape in May, with the goods surplus rising to €21.4bn from €17.9bn in April. | Eurozone trade was in good shape in May, with the goods surplus rising to €21.4bn from €17.9bn in April. |
| The single currency bloc exported €189.6bn of goods in May, a 12.9% increase on the same month last year. | The single currency bloc exported €189.6bn of goods in May, a 12.9% increase on the same month last year. |
| Imports from the rest of the world also rose, by 16.4% to €168.1bn according to the official figures from Eurostat. | Imports from the rest of the world also rose, by 16.4% to €168.1bn according to the official figures from Eurostat. |
| Over the first five months of 2017, exports were 8.5% higher than the same period a year ago, at trade €898.5bn, while imports were up 12.3% at trade €815.6bn . | Over the first five months of 2017, exports were 8.5% higher than the same period a year ago, at trade €898.5bn, while imports were up 12.3% at trade €815.6bn . |
| Jennifer McKeown, chief European economist at Capital Economics, said the strong trade figures were good news for the wider eurozone economy. | Jennifer McKeown, chief European economist at Capital Economics, said the strong trade figures were good news for the wider eurozone economy. |
| The widening of the euro-zone’s trade surplus in May adds to signs that GDP growth may have accelerated in the second quarter. And in contrast to the situation last year, we expect net trade to boost euro-zone GDP growth in the quarters ahead. | The widening of the euro-zone’s trade surplus in May adds to signs that GDP growth may have accelerated in the second quarter. And in contrast to the situation last year, we expect net trade to boost euro-zone GDP growth in the quarters ahead. |
| 10.36am BST | 10.36am BST |
| 10:36 | 10:36 |
| Analysts at TS Lombard said Chinese leaders will be hoping to settle differences at this weekend’s National Financial Work Conference: | Analysts at TS Lombard said Chinese leaders will be hoping to settle differences at this weekend’s National Financial Work Conference: |
| This year’s meeting has attracted particular attention after Xi Jinping is said to have demanded better regulatory coordination following the July 2015 stock market correction and large-scale capital outflows in H2/15. There had been discussion of moving the meeting up to summer 2016 – half a year ahead of schedule. In the end, however, the meeting, which should have been held in January, has ended up being delayed by disagreements about how to approach regulation. | This year’s meeting has attracted particular attention after Xi Jinping is said to have demanded better regulatory coordination following the July 2015 stock market correction and large-scale capital outflows in H2/15. There had been discussion of moving the meeting up to summer 2016 – half a year ahead of schedule. In the end, however, the meeting, which should have been held in January, has ended up being delayed by disagreements about how to approach regulation. |
| These disagreements have centred around a potential restructuring of the regulatory system. | These disagreements have centred around a potential restructuring of the regulatory system. |
| The final decision has not been made, but reports are that a new People’s Bank of China-led office will be established with representatives from other regulators and key government bodies such as the Ministry of Finance and the Development and Reform Commission. | The final decision has not been made, but reports are that a new People’s Bank of China-led office will be established with representatives from other regulators and key government bodies such as the Ministry of Finance and the Development and Reform Commission. |
| 10.26am BST | 10.26am BST |
| 10:26 | 10:26 |
| RBS share sale in 2015 was 'value for money' for taxpayers | RBS share sale in 2015 was 'value for money' for taxpayers |
| The sale of government shares in bailed out bank Royal Bank of Scotland was “value for money” despite losses for the taxpayer of nearly £2bn. | The sale of government shares in bailed out bank Royal Bank of Scotland was “value for money” despite losses for the taxpayer of nearly £2bn. |
| That’s the verdict of the public spending watchdog, the National Audit Office, which has published a report on the controversial sale of a 5.4% two years ago. | That’s the verdict of the public spending watchdog, the National Audit Office, which has published a report on the controversial sale of a 5.4% two years ago. |
| The NAO concluded the sale was “well planned and organised and represented value for money”. | The NAO concluded the sale was “well planned and organised and represented value for money”. |
| The Press Association reports: | The Press Association reports: |
| The sale came under heavy criticism at the time after the Government offloaded its first tranche of shares in RBS at a 52-week low. | The sale came under heavy criticism at the time after the Government offloaded its first tranche of shares in RBS at a 52-week low. |
| There was also speculation over leaked information after shares plunged 8% in the three days before the sale as hedge funds bet against RBS. | There was also speculation over leaked information after shares plunged 8% in the three days before the sale as hedge funds bet against RBS. |
| It was originally estimated that the 2015 share sale saw losses of £1.1 billion on the price paid under the £45.5 billion bailout of RBS at the height of the financial crisis. | It was originally estimated that the 2015 share sale saw losses of £1.1 billion on the price paid under the £45.5 billion bailout of RBS at the height of the financial crisis. |
| But the NAO said, taking into account costs of financing the rescue, losses on the stake sale soared to £1.9 billion. | But the NAO said, taking into account costs of financing the rescue, losses on the stake sale soared to £1.9 billion. |
| It comes a day after RBS was ordered to pay $5.5bn (£4.2bn) to US regulators for misselling toxic mortgage bonds: | It comes a day after RBS was ordered to pay $5.5bn (£4.2bn) to US regulators for misselling toxic mortgage bonds: |
| Updated | Updated |
| at 10.26am BST | at 10.26am BST |
| 9.43am BST | 9.43am BST |
| 09:43 | 09:43 |
| John Lewis: 'lipstick effect' takes hold as consumers grow cautious | John Lewis: 'lipstick effect' takes hold as consumers grow cautious |
| John Lewis says consumers are increasingly unwilling to spend money on big ticket items as confidence wanes and incomes are squeezed by higher prices and weak wage growth. | John Lewis says consumers are increasingly unwilling to spend money on big ticket items as confidence wanes and incomes are squeezed by higher prices and weak wage growth. |
| Paula Nickolds, the new chief executive of Britain’s biggest department store, said demand had dropped for the larger, non essential purchases. However the ‘lipstick effect’ appears to have kicked in, where cash-strapped consumers are more willing to buy less costly luxurious goods, instead of that new TV or piece of furniture. | Paula Nickolds, the new chief executive of Britain’s biggest department store, said demand had dropped for the larger, non essential purchases. However the ‘lipstick effect’ appears to have kicked in, where cash-strapped consumers are more willing to buy less costly luxurious goods, instead of that new TV or piece of furniture. |
| Nickolds told journalists at a press dinner: | Nickolds told journalists at a press dinner: |
| It’s the more considered categories, the arguably deferrable spend, that we’re seeing most affected by the uncertainty in the macro conditions - so those big ticket categories are currently trading just behind last year. | It’s the more considered categories, the arguably deferrable spend, that we’re seeing most affected by the uncertainty in the macro conditions - so those big ticket categories are currently trading just behind last year. |
| “We believe [spontaneous categories such as beauty] to be significantly ahead of the market. Perhaps it’s the lipstick effect as we might have called it back in the recession [of 2008].” | “We believe [spontaneous categories such as beauty] to be significantly ahead of the market. Perhaps it’s the lipstick effect as we might have called it back in the recession [of 2008].” |
| Acknowledging the challenging consumer backdrop, Nickolds said: | Acknowledging the challenging consumer backdrop, Nickolds said: |
| I would have preferred to start my first year as managing director of John Lewis in slightly more benign conditions. The backdrop is very uncertain and it was made worse by the tragic events that happened across British cities over the last few months. | I would have preferred to start my first year as managing director of John Lewis in slightly more benign conditions. The backdrop is very uncertain and it was made worse by the tragic events that happened across British cities over the last few months. |
| Consumers feel uncertain and worried about what the circumstances will mean for their future financial prosperity. | Consumers feel uncertain and worried about what the circumstances will mean for their future financial prosperity. |
| 9.05am BST | 9.05am BST |
| 09:05 | 09:05 |
| Carillion shares rise after it names HSBC as adviser | Carillion shares rise after it names HSBC as adviser |
| Some respite for Carillion this morning with shares up 4.6% at 60p, making the building group the top riser on the FTSE 250. | Some respite for Carillion this morning with shares up 4.6% at 60p, making the building group the top riser on the FTSE 250. |
| After heavy losses every day this week, shares have been boosted by the news that the troubled company has appointed HSBC as its joint financial adviser and joint corporate broker. | After heavy losses every day this week, shares have been boosted by the news that the troubled company has appointed HSBC as its joint financial adviser and joint corporate broker. |
| Analysts at investment bank Jefferies warned earlier this week that Carillion was unlikely to survive without a hefty rights issue of at least £500m. | Analysts at investment bank Jefferies warned earlier this week that Carillion was unlikely to survive without a hefty rights issue of at least £500m. |
| Carillion is a major contractor to customers such as the Highways Agency and Network Rail and investors panicked on Monday when it revealed an £845m writedown against customer payments it no longer expected to be able to collect. | Carillion is a major contractor to customers such as the Highways Agency and Network Rail and investors panicked on Monday when it revealed an £845m writedown against customer payments it no longer expected to be able to collect. |
| At the same time it announced chief executive Richard Howson had immediately stepped down. Over subsequent days 70% of its market value was wiped out as shares plummeted. Shares were worth 200p a month ago. | At the same time it announced chief executive Richard Howson had immediately stepped down. Over subsequent days 70% of its market value was wiped out as shares plummeted. Shares were worth 200p a month ago. |
| A reminder of how events unfolded: | A reminder of how events unfolded: |
| 8.37am BST | 8.37am BST |
| 08:37 | 08:37 |
| European markets flat in early trading | European markets flat in early trading |
| European markets are steady in early trading, with only small moves. | European markets are steady in early trading, with only small moves. |
| FTSE 100: -0.03% at 7,411 | FTSE 100: -0.03% at 7,411 |
| Germany’s DAX: -0.1% at 12,633 | Germany’s DAX: -0.1% at 12,633 |
| France’s CAC: +0.03% at 5,237 | France’s CAC: +0.03% at 5,237 |
| Italy’s FTSE MIB: -0.03% at 21,516 | Italy’s FTSE MIB: -0.03% at 21,516 |
| Spain’s Ibex: +0.04% at 10,663 | Spain’s Ibex: +0.04% at 10,663 |
| Europe’s STOXX 600: +0.03% at 386 | Europe’s STOXX 600: +0.03% at 386 |
| 8.26am BST | 8.26am BST |
| 08:26 | 08:26 |
| China holds latest five-yearly finance meeting | China holds latest five-yearly finance meeting |
| China’s leaders gather every five years to discuss ways to improve the financial system of the world’s second largest economy. | China’s leaders gather every five years to discuss ways to improve the financial system of the world’s second largest economy. |
| The next meeting of the National Financial Work Conference takes place today and tomorrow in Beijing and President Xi Jinping is expected to attend. | The next meeting of the National Financial Work Conference takes place today and tomorrow in Beijing and President Xi Jinping is expected to attend. |
| Items on the agenda are likely to include reining in financial risk, and giving the central bank a bigger role in overseeing other financial regulators. | Items on the agenda are likely to include reining in financial risk, and giving the central bank a bigger role in overseeing other financial regulators. |
| Some background on the history of the meeting from Bloomberg: | Some background on the history of the meeting from Bloomberg: |
| The meeting has held a special place in China’s economic and political calendar since it was introduced to encourage more sustainable economic growth following the Asian financial crisis. | The meeting has held a special place in China’s economic and political calendar since it was introduced to encourage more sustainable economic growth following the Asian financial crisis. |
| The first conference in 1997 saw the establishment of an insurance regulator and a plan to bail out China’s largest banks. The second led to the creation of a banking regulator and a drive to list major state-owned lenders on overseas stock exchanges. | The first conference in 1997 saw the establishment of an insurance regulator and a plan to bail out China’s largest banks. The second led to the creation of a banking regulator and a drive to list major state-owned lenders on overseas stock exchanges. |
| The 2007 conference oversaw the creation of the sovereign wealth fund, China Investment Corp., which now has $813.5 billion of assets. The meeting in 2012 focused on the fallout from the global financial crisis. | The 2007 conference oversaw the creation of the sovereign wealth fund, China Investment Corp., which now has $813.5 billion of assets. The meeting in 2012 focused on the fallout from the global financial crisis. |
| 7.54am BST | 7.54am BST |
| 07:54 | 07:54 |
| The agenda: all eyes on US data as rate expectations fade | The agenda: all eyes on US data as rate expectations fade |
| 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. |
| European markets are expected to follow Wall Street higher this morning as investors continue to digest the more cautious tone from Fed chair Janet Yellen. | European markets are expected to follow Wall Street higher this morning as investors continue to digest the more cautious tone from Fed chair Janet Yellen. |
| A rate hike in December is no longer looking like a foregone conclusion after Yellen highlighted weak inflation as a factor weighing on the minds of policymakers. | A rate hike in December is no longer looking like a foregone conclusion after Yellen highlighted weak inflation as a factor weighing on the minds of policymakers. |
| Michael Hewson from CMC Markets explains: | Michael Hewson from CMC Markets explains: |
| The Dow Jones posted another record close, while the US dollar remained under pressure as markets adjusted to how the next moves on monetary policy might play out. | The Dow Jones posted another record close, while the US dollar remained under pressure as markets adjusted to how the next moves on monetary policy might play out. |
| The prospect that further interest rate rises may well be much more gradual, if they happen at all, shouldn’t have been entirely unexpected given the risks involved in trying to withdraw stimulus and raise rates at the same time, nonetheless judging by the market reaction it appears to have gone down fairly well. | The prospect that further interest rate rises may well be much more gradual, if they happen at all, shouldn’t have been entirely unexpected given the risks involved in trying to withdraw stimulus and raise rates at the same time, nonetheless judging by the market reaction it appears to have gone down fairly well. |
| With that in mind, investors will be focused on the latest US inflation data, due at 13.30 UK time. It is expected to show consumer price inflation remained at a fairly subdued 1.7% in June. | With that in mind, investors will be focused on the latest US inflation data, due at 13.30 UK time. It is expected to show consumer price inflation remained at a fairly subdued 1.7% in June. |
| US retail sales data for June will also be published at 13.30, and are expected to show the sector managed growth of just 0.1% last month, following a 0.3% drop in sales in May. | US retail sales data for June will also be published at 13.30, and are expected to show the sector managed growth of just 0.1% last month, following a 0.3% drop in sales in May. |
| Traders at spread betting firm IG expect European markets to open higher: | Traders at spread betting firm IG expect European markets to open higher: |
| Our European opening calls:$FTSE 7421 +0.11%$DAX 12647 +0.05%$CAC 5244 +0.16%$IBEX 10679 +0.20%$MIB 21547 +0.12% | Our European opening calls:$FTSE 7421 +0.11%$DAX 12647 +0.05%$CAC 5244 +0.16%$IBEX 10679 +0.20%$MIB 21547 +0.12% |