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Chevron profits top $11 billion as oil and gas production hits record high
Energy giant Chevron beat analysts’ estimates to post its second-highest quarterly profit on record amid a surge in demand for oil and gas.
The company made a third-quarter net profit of $11.2 billion (£9.6 billion). Earnings per share came in at $5.78, nearly a dollar ahead of market expectations.
“We delivered another quarter of strong financial performance,” Chevron CEO Michael Wirth said, adding that oil and gas production hit “another quarterly record.”
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The French slowdown is raising fears of an EU-wide recession
Figures on the slowdown in the French economy today did little to ease fears that Europe will slip into recession this winter. The eurozone’s second-largest economy posted growth of 0.2% in the third quarter, down from 0.5% in the previous three months.
Germany’s flash GDP figure showed modest growth of 0.3%, up from just 0.1% previously and slightly ahead of market expectations.
France’s result was in line with forecasts, but economists are bracing for flat performance in the current quarter as inflation and rising interest rates squeeze spending.
The European Central Bank yesterday doubled its main deposit rate to 1.5%, and policymakers warned that more hikes are on the way to fight inflation.
On an annual basis, France’s statistics agency said GDP rose 1 percent in the third quarter compared with 4.2 percent growth in the second quarter.
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Glencore production guidance hits shares, FTSE 100 lower
Shares in Glencore fell 3% today after it cut annual production guidance for some commodities, blaming factors including extreme weather in Australia and industrial action at a nickel mine in Canada.
Shares were down 13.6p at 487.4p, with Rio Tinto down 3% or 155p to 4509p as the FTSE 100 index fell 55.70 points to 7017.99.
Mining valuations have come under pressure in recent days, fueled by concerns about the demand outlook in China and following a lackluster reaction to the latest production reports, including from De Beers owner Anglo American yesterday.
Glencore reported a big quarterly drop in copper output as it cut annual guidance for several commodities, including coal due to severe flooding in New South Wales.
Zinc production projections have also suffered from supply chain problems in Kazakhstan stemming from the Ukraine war, with nickel down due to a recent 15-week strike at its mining complex in northern Quebec. However, Glencore’s giant marketing operation is expected to deliver an above-average performance in the second half.
The miners’ selling pressure came as investors retreated to the sidelines, shaken by Amazon’s poor earnings numbers and nerves ahead of next week’s interest rate decisions in the UK and US united
More major hikes are expected, in stark contrast to the Bank of Japan’s decision today to keep its key short-term interest rate at minus 0.1%.
Amazon’s upgrade weighed on consumer-focused shares, with transatlantic retailer JD Sports Fashion 3% lower, down 2.7p. at 98.8 p.
In the FTSE 250 index, which fell 1.2% or 210.56 points to 17,871.36, ASOS fell 30.5p to 615.5p and consumer magazine publisher Future fell 67p.
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Insolvencies rise 2%, bankruptcies up 4% in latest sign of economic trouble
Insolvencies rose by 2% in the three months to September, government data showed, in the latest sign that the UK economy is heading into recession.
One in 405 adults became insolvent between 1 October 2021 and 30 September 2022, up 3% on the previous year, but the overall figure was down slightly on the previous quarter.
Bankruptcies rose 4% from the previous quarter to 1,713, but were below 2021 levels. Insolvencies soared in the second half of 2021 as the government began to withdraw its emergency support package to the coronavirus for businesses.
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NatWest boss: People are worried
Britain’s four biggest lenders set aside £2.5 billion this week to deal with bad debts, a clear sign bankers are bracing for a recession.
Today NatWest booked an ‘impairment charge’ of £242m in the last three months alone. This compares favorably with Barclays at £381m, Lloyds Bank at £668m and HSBC at £930m, but is still a clear sign of impending distress.
That £2.5bn figure does not include write-offs from other major lenders such as Spanish-owned Santander or Nationwide Building Society.
Fears of a house price fall of perhaps 30% are growing. That would leave many people in negative equity, just as they end up renegotiating mortgage deals at much higher rates as interest rates spiral.
NatWest chief executive Alison Rose said the bank has carried out 600,000 financial health checks as it seeks to be proactive in managing people’s finances.
“Anxiety levels among people are high,” he told the Standard. “We’re not seeing mortgages coming into areas yet, but we know people are very concerned.”
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Tech billionaires lose £50bn in week as earnings figures disappoint
Four of the world’s richest tech billionaires have seen their wealth plummet by £50bn in the past week as falling household incomes dampen consumer demand and rising labor costs hurt profit margins.
Meta founder Mark Zuckerberg’s wealth fell by £12bn after Meta shares fell 20% as investors reacted with disappointment to a 52% drop in net income to £4.4bn dollars (3.8 billion pounds) in the quarter to September 30.
Google founders Larry Page and Sergei Brin lost a combined £20bn after Google parent Alphabet posted sales figures some $2bn below analysts’ expectations.
Meanwhile, Jeff Bezos is set to lose around £22bn of his wealth today as Amazon shares fell 19% in after-market overnight as the tech giant warned that profits will cut in the fourth quarter amid rising labor and delivery costs.
Matt Britzman, equity analyst at Hargreaves Lansdown, said: “Amazon clearly ramped up its expansion plans too early and has had to put on the brakes and then some to try to get costs back under control.”
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FTSE 100 down 0.9%, Glencore down 3% after update
Sellers dominated the London market, with the FTSE 100 index down 0.9% or 64.54 points to 7,009.15 and the FTSE 250 index down 1.2% or 225.59 points to 17,856.33.
Confidence has been shaken by poor earnings figures from Amazon, while investors are also positioning for next week’s interest rate decisions in the UK and US.
Big decliners in the retail sector include JD Sports Fashion, which generates a large portion of its revenue in the US. Its shares were 3% lower, down 2.7p. at 98.8 p.
Mining stocks came under pressure after Glencore lowered its annual production guidance for some commodities. Its shares fell 3% or 15.4p to 485.6p and Rio Tinto lost 145p to 4519p.
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Lucky Voice plans karaoke expansion
The owners of Lucky Voice karaoke bars have unveiled plans for a major expansion and investment program after punters returned to their venues much faster than expected following the pandemic.
The company, which has London venues in Soho, Islington and Holborn frequented by celebrities including Harry Styles, Paul McCartney and Gwyneth Paltrow, said trading surpassed 2019 levels “within weeks” of reopening in May ‘last year. Between March and May of this year, revenue increased by 54% compared to the same period in 2019.
Under the new plan, the company aims to have 10 sites by the end of 2024 “including a significantly expanded presence in London”. It has also earmarked £500,000 for upgrading its existing venues following a £300,000 refurbishment of the original Lucky Voice on Soho’s Poland Street.
Managing director Charlie Elek said: “We’ve been delivering phenomenal nights since 2005, and we’re sounding better than ever in 2022. The revamp of our Soho venue is part of a wider strategy for the business as we look to grow and invest in our venues to ensure we deliver the most amazing experience, both for our guests and our teams.Our mission is to combine karaoke with great service, technology and food and drink, and we’re constantly thinking about how to give people their favorite night out.”
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NatWest bullish but shares fall
NatWest boss Alison Rose said today that the major lender continued to deliver strong financial performance after third-quarter profits improved from a year earlier to £1.1bn.
The impact of the increases in basic rates has made the bank’s net interest margin of 2.99% 27 basis points higher than in the second quarter of the year.
NatWest has taken a £242m bad debt charge in relation to its core business, which it said reflected scenario planning rather than the performance of the underlying book where conditions remain benign.
Chief executive Alison Rose said: “The bank’s strong capital and liquidity enables us to help those who are likely to need it most.”
However, shares fell 6% as rising inflationary pressures mean the bank no longer expects costs in 2023 to be broadly stable.
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Elon Musk fires Parag Agrawal as he completes takeover of Twitter
Elon Musk is now at the helm of Twitter and has fired his top three executives.
Sources on Thursday night (early Friday morning in the UK) did not say whether all the paperwork for the deal, initially valued at $44bn (£38bn), had been signed or if it had been closed.
However, they said the South African-born businessman was at the helm of the company and had ousted chief executive officer Parag Agrawal, chief financial officer Ned Segal and general counsel Vijaya Gadde.
The billionaire appeared to confirm media reports of his takeover, tweeting shortly before 5am (UK time) on Friday: “the bird is released.”