Good morning! Here’s what you need to know in markets on Friday.
It’s preliminary PMI day in Europe, the first major economic readings since Brexit. From 8.00 a.m. BST (3.00 a.m. ET) onwards, we’ll be getting early estimates of economic growth in July for the manufacturing and services sectors, as well as the overall economies, in France, Germany, Italy, Britain, and the eurozone as a whole. Economists are forecasting a shrinking of Britain’s crucial service sector, with a PMI reading of 49.2 (anything above 50 signals growth, below contraction). Growth of the overall eurozone economy is forecast to slow from 53.1 in June to 52.5.
US stocks fell for the first time in 10 days on Thursday, temporarily ending a streak that took the market to new highs for the first time in over a year.Intel shares fell the most on the Dow Jones Industrial Average, by 4%, after the company’s earnings results on Wednesday showed that its most important business — the data center group — slowed last quarter.
Asian stock markets are following the US’ lead and falling. China’s benchmark Shanghai Composite is down 0.86% at the time of writing (6.30 a.m. BST/1.30 a.m. ET), the Hong Kong Hang Seng is down 0.44%, and Japan’s Nikkei is down 1.35%. Japan’s market suffered the heaviest fall after central bank Governor Haruhiko Kuroda said he would not use helicopter money to prop up the economy.
Mike Ashley, the billionaire founder of Sports Direct, must be held accountable for working practices that treated the retailer’s employees without dignity or respect, UK lawmakers say. Bloomberg reports that members of the House of Commons Business, Innovation, and Skills Committee struggled to believe statements by Ashley that he wasn’t aware of incidents such as staff being promised permanent contracts in return for sexual favours or the practice of workers being penalised for taking time off sick, the panel said in a report published in London Friday.
The HSBC banker arrested over his alleged role in a currency fraud was cleared by the bank 3 years ago of any wrongdoing after an internal investigation into its foreign exchange business found no breaches of the lender’s rules, according to the Times. Mark Johnson, 50, was arrested by the FBI on Tuesday and freed on Wednesday on $1 million (£760,000) bail after being charged by the US Department of Justice with conspiring to rip off a big client of the bank as part of a $3.5 billion (£2.6 billion) currency trade.
JPMorgan is expected to pay about $200 million (£151.1 million) to settle criminal and civil probes over its Asia hiring practices, The Wall Street Journal reported, citing people familiar with the matter.JPMorgan would likely admit that its hiring practices, including a China program in which it hired the children of powerful people, violated a US law prohibiting giving something of value in exchange for business, the Journal said.
Number26, a German mobile banking startup backed by PayPal founder Peter Thiel, just took a major step forward in its mission to replace banks. The year-and-a-half-old startup, based in Berlin, was awarded a full German banking licence by the Federal Financial Supervisory Authority and the European Central Bank on July 18.
Exxon Mobil is buying InterOil in a deal worth more than $2.5 billion (£1.9 billion). In a statement on Thursday, Exxon said it will pay $45 (£34) per share for the oil and gas company, which has a market cap of about $2.4 billion (£1.8 billion).
US online radio platform Pandora rejected an offer to sell itself for $15 dollars a share, a deal that would have valued the company at over $3.4 billion (£2.5 billion), according to The Wall Street Journal’s Hannah Karp, Shalini Ramachandran, and David Benoit. The offer came from Liberty Media CEO Greg Maffei, whose company controls Sirius XM, but was more of a “fishing expedition” than a formal offer, sources told the Journal.
PayPal on Thursday showed strong growth in its online payments business, meeting Wall Street expectations on earnings and announcing a new partnership with Visa that is expected to bring a significant revenue increase. PayPal posted second-quarter earnings of 36 cents per share, in line with analysts’ expectations, and revenue growth of 15 per cent to $2.65 billion (£2 billion).
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