The stock markets are a sea of red, amid worries over a third wave of coronavirus infections. EU leaders are meeting virtually to discuss the situation and what they can do to speed up vaccination campaigns. It looks like they will shy away from halting vaccine exports, threatened by European Commission president Ursula von der Leyen earlier this week.
The situation is far worse in the world’s poorest countries, where only a fraction of the population (if any) have been vaccinated. They have been warned to expect delays in the delivery of Covid-19 vaccines through the UN-backed Covax programme after a double blow of technical problems at a South Korean manufacturing plant and setbacks in securing export licences from the Indian government, Unicef has said.
In the markets, the FTSE 100 index is down 1%, or 70 points, at 6,642. Germany’s Dax has slid 0.66% while France’s CAC and Italy’s FTSE MiB are 0.5% lower. On Wall Street, the Dow Jones has lost 0.7%, the S&P 500 has fallen 0.3% and the Nasdaq is down 0.4%.
Oil prices have tumbled, as supply concerns over the Suez Canal blockage have given way to worries over lower demand, after the introduction of fresh Covid-19 lockdowns across Europe in recent days. Brent crude is down 3.3% at $62.25 a barrel while US light crude has dropped 3.9% to $58.76. Both have fallen by more than $2.
The Bank of England has unveiled a new £50 note featuring Alan Turing, the scientist best known for his codebreaking work during the Second World War, that will go into circulation on 23 June, the date of his birth.
Thanks for reading. We’ll be back tomorrow. Take care – JK
Tui has cut its summer capacity for 2021 despite “increasing interest” and pent-up demand for holidays this year, reports our transport correspondent Gwyn Topham.
Europe’s biggest travel company said the vaccination programmes and government initiatives were leading to “positive booking behaviour”, particularly in Germany and the UK, but admitted that the overall bookings remained at just 2.8m for the summer – more than 4 million fewer than at the same time in 2019.
Tui hoped to reassure investors at its annual meeting after shares tumbled on Monday amid warnings from politicians and health experts that foreign holidays could be ruled out this summer. Instead, the share price slid a further 6% on Thursday.
While UK tourists, who normally account for 25-30% of Tui’s market, will not be travelling until at least 17 May under the current roadmap, Tui has pinned hopes on its German customers travelling over the Easter holidays.
However, a renewed wave of Covid outbreaks in Germany and debate over fresh restrictions could yet affect those holidays. Tui said it was in favour of testing all German holidaymakers at their destination over Easter before their return, but stressed that its “holiday offers were geared towards relaxation, beach walks and the conscious experience of nature”.
Another update on the Suez Canal blockage: salvage teams from the Netherlands and Japan are being brought in to redraw plans to free the giant container ship blocking the Suez canal after nearly three days of unsuccessful efforts.
Taiwan’s Evergreen Marine Corp, which leased the vessel, said the Dutch firm Smit Salvage and Japan’s Nippon Salvage had been appointed by the ship’s owner and would work alongside its captain and the Suez Canal Authority (SCA) on a plan to refloat the ship and resume traffic on one of the world’s key trade routes.
Wall Street has fallen at the open, dragged down by tech stocks, despite the better US data (GDP growth was higher than expected in the fourth quarter at 4.3%, and jobless claims fell last week).
The Dow Jones fell 73 points, or 0.2%, to 32,346. The S&P 500 slid nearly 10 points to 3,789 while the Nasdaq lost 117 points, or 0.9%, to 12,844.
European stock markets continue to slide as traders fret about the worsening Covid situation across Europe, whlie EU leaders are discussing how to improve things at a virtual meeting.
UK’s FTSE 100 down 1.15%, or 76 points, at 6,635
Germany’s Dax down 1%, or 156 points, at 14,453
France’s CAC down 0.87%, or 51 points, at 5,895
Italy’s FTSE MiB down 0.6%, or 155 points, at 24,052
Wall Street is also expected to open lower, with Dow Jones futures pointing to a 0.5% drop while Nasdaq futures are down 0.65%.
Speaking on the BBC’s HARDtalk programme, Juncker, who was replaced by Ursula von der Leyen in 2019, compared the EU’s approach to vaccination unfavourably with that of Britain where the rollout has been speedier.
He also said he was “not a fan” of the commission’s export authorisation mechanism under which officials have been empowered to prohibit shipments.
NEWSFLASH: US GDP grew at an annualised rate of 4.3% in the fourth quarter, according to the final estimate from the Bureau of Economic Analysis. This is up from the previously reported 4.1%. Analysts had expected no revision. In the third quarter, GDP surged by 33.4%.
Jobless claims fell to 736,000 in the week to 20 March from 749,000 in the previous week, which was revised slightly higher, separate figures from the US Labor Department showed.
EU leaders are discussing the vaccine situation right now at a virtual conference, but are likely to shy away from supporting the use of new powers to block Covid vaccine shipments to countries with better jab coverage such as the UK, according to a draft statement before the meeting.
The European commission has increased its scope for blocking vaccine exports but disquiet among member states is set to be reflected in a muted statement at the end of the virtual summit on Thursday evening.
The UK government is in the midst of a high-stakes review of gambling regulation that could result in significant changes, potentially crimping the industry’s profitability, my colleague Rob Davies writes.
With that in mind, bookmakers and online casinos have been doing their utmost to show that they are taking the prevention of addiction seriously.
Step forward Malta-based online casino company Casumo, which has been fined £6m this morning, one of the largest fines ever dished out by the Gambling Commission, the industry regulator.
Casumo failed to perform anti money laundering and responsible gambling checks on people losing large sums.
One customer lost £1.1m in three years without the company ever performing responsible gambling checks. On another occasion, the company stood by as a customer lost £59,000 in 90 minutes.
This case is significant for three key reasons.
First, many in the industry are resistant to the idea of being forced to perform affordability checks, seeing the idea as intrusive and unnecessary. But how many people can afford to lose £59,000 in an hour and a half?
Second, the review will consider banning gambling sponsorship on football shirts. Casumo sponsor Reading FC.
Third, leading gambling figures have made much of how standards have improved dramatically, with exploitation of addicts largely a thing of the past.
The Casumo case suggests that may be wishful thinking, at best.
Stock markets are pretty sluggish today while the dollar hit a four-month high as appetite for risky assets waned, with Covid infection rates rising across Europe.
The UK’s FTSE 100 is down 0.57% while Germany’s Dax and France’s CAC have both slid 0.2%. US stock market futures are pointing to a slightly higher open on Wall Street later. The dollar index hit its highest level since November overnight, at 92.697.
Bond yields are falling again, after expectations of higher growth and inflation in the US sent them soaring in recent weeks. The German 10-year government bond yield, or effective interest rate, has hit its lowest level since mid-February, at 0.376%.
Oil prices are also sliding, as the latest round of Covid lockdowns in Europe has revived worries about demand for crude, despite the disruption caused by a huge container ship blocking the Suez Canal. Tug boats are struggling to move the ship. At least 150 other ships are stuck on both sides of the canal.
Brent and US crude both jumped 6% yesterday as the blockage raised supply fears, but are down 1.35% and 1.6% respectively today. Brent crude is trading at $63.55 a barrel while US West Texas intermediate crude is at $60.18 a barrel.
Spending on credit and debit cards in the UK is slowly recovering towards pre-pandemic levels, according to figures from the Office for National Statistics.
Card spending rose to 81% of its February 2020 level in the week to 18 March, up 16 percentage points since the start of the year.
The ONS also said that nearly a fifth of Britain’s workforce remains on furlough (19%).
The CBI’s latest retail sales survey is out, and shows the retail sales balance at -45% in March, unchanged from February. The balance deducts retailers who said sales rose compared to a year ago from those who reported a sales decline. Economists had expected a slight improvement to -37%.
However, the outlook is considerably brighter. The retail sales expectations balance for April jumped to +17%, from -62% in March, suggesting retailers expect sales to return to growth next month. This is the first time expectations have been positive since December 2019.
Ben Jones, principal economist at the CBI, said:
Retailers are looking forward to April with a sense of optimism, given the potential re-opening of the sector across the UK. However, it is clear that the potential easing of domestic restrictions next month will not be a panacea for all retailers. Expectations point to a fairly muted recovery, especially when considering that base effects will tend to flatter annual growth next month, given the historic drop in sales in April 2020.
Sales volumes in March fell particularly sharply in sectors such as clothing, footwear, furniture & carpets and for department stores.
The grocery sector – which remains open to customers – reported the biggest year-on-year decline in sales since April 2020. However, the decline was in comparison to a surge in sales in March 2020 as shoppers stocked-up on essential items ahead of the first national lockdown. Despite falling in comparison with last March, grocery sales were seen as good for the time of year this month. Similarly, hardware & DIY stores reported that sales were above seasonal norms.
Compass Group, the world’s largest catering company which supplies schools, offices and sports venues (such as Tottenham Hotspur FC), has put out a trading update. It shows that after a tough 2020, sales have started to improve slowly.
Organic revenues are down 28% in the three months to 31 March, compared with a 34% decline in the previous quarter. Revenues over the last six months are expected to show a 31% decline.
It was identified among the suppliers of food packages to families in place of free school meals during the latest coronavirus lockdowns. Images of the packages posted by parents on social media suggested they did not meet government guidelines.
More job losses in banking. Santander is to close 111 branches across the UK affecting around 5,000 staff, as the coronavirus pandemic pushed more customers to embrace digital banking for most of their banking needs, writes Mark Sweney.
The bank said that affected staff will be offered new working arrangements that will combine working from home with “access to local collaboration spaces”.
Deliveroo also remains in the spotlight. It has emerged that some Deliveroo couriers are earning as little as £2 an hour, according to a survey of more than 300 riders for the food delivery service.
Meanwhile, another top investor has revealed it will not invest in Deliveroo at its upcoming stock market float, adding to growing criticism of the company’s treatment of workers, reports my colleague Jasper Jolly.
BMO Global Asset Management said today it would not be investing in Deliveroo and that the company’s labour practices were one important part informing the decision. This came after two of the UK’s largest investment managers, Aviva Investors and Aberdeen Standard Investments, both cited concerns over treatment of workers for their decision to skip Deliveroo’s initial public offering (IPO).
Boohoo has published a full list of the UK clothing manufacturers it works with after severing ties with hundreds of companies following a damning review last year of its supply chain, writes our retail correspondent Sarah Butler.
The group now works with 78 UK suppliers afterthe review by Alison Levitt QC found the fast fashion retailer had been working with up to 500 UK suppliers when subcontractors were included. The review concluded there were“endemic” problems at Leicester factories in its supply chain, including minimum wage and life-threatening fire risk.
Boohoo has now banned subcontracting by its main suppliers so some of the reduction in numbers is the result of outsourced work being brought in-house. However, the 78 approved manufacturers operate across just 100 sites.
Here’s an update on the Suez Canal blockage.
Traffic is still suspended while eight tugs work to free the giant container ship that’s stranded in the southern stretch of the canal for a third day. At 400m, the Taiwan-owned Ever Given vessel is almost as long as the Empire State Building is high. It ran aground on Tuesday morning after losing the ability to steer amid high winds and a dust storm.
The eight tugs, the largest of them with a towing power of 160 tons, have been trying to push and pull the Ever Given free of the canal’s banks, the Suez Canal Authority (SCA) said in a statement.
More than 150 ships are stuck at each end of the canal, which connects the Red Sea to the Mediterranean and carries about 10% of global shipping traffic.
Peter Berdowski, CEO of Dutch company Boskalis, which is trying to free the ship, said it was too early to say how long the job might take. He told the Dutch television programme Nieuwsuur:
We can’t exclude it might take weeks, depending on the situation.
He said the ship’s bow and stern had been lifted up against either side of the canal.
It is like an enormous beached whale. It’s an enormous weight on the sand. We might have to work with a combination of reducing the weight by removing containers, oil and water from the ship, tug boats and dredging of sand.