Proactive Investors -
- FTSE 100 falls by 37 points
- AstraZeneca off nearly 5%
- UK jobs data mixed
iPhone 16 met with relative indifference
Apple Inc (NASDAQ:AAPL) shares are expected to lose around 1.1% on the Nasdaq today, suggesting a fairly cold reception to the iPhone 16 unveiling.
The iPhone 16 debut “had promised to kickstart a new artificial intelligence-fuelled era for the technology giant but was rather met with relative indifference by investors”, writes Proactive’s Josh Lamb.
Swissquote Bank analyst Ipek Ozkardeskaya warned Apple’s AI capabilities were already viewed as “weak” in comparison to rivals, such as Samsung (LON:0593xq) and Google (NASDAQ:GOOGL) which have already introduced phones incorporating the technology.
“Many think [these] can’t trigger a massive surge in new product sales,” Ozkardeskaya said, “even less so as these features will be gradually updated and won’t even be available at the products’ launch date”.
AJ Bell’s investor director Russ Mould said of the launch: “At face value, some of the initiatives look interesting. A new version of the iPhone with a camera button on the side is a smart move as that should appeal to wannabe influencers eager to capture every moment.
“The incorporation of AI into the phone is also a good step forward, so are the enhancements to its air pods. Unfortunately for Apple, competitors are already one step ahead of the game with AI.
“There is a danger that Apple becomes the imitator, not the trendsetter.
It cannot afford to be in that position from a reputational perspective. Apple built its empire through innovation and being at the cutting edge of technology. It needs to work harder to stay on top.”
Spectator portion of Telegraph Media Group sold to GB News founder
Redbird IMI (LON:IMI), owner of the right-wing Telegraph Media Group news empire, has sold The Spectator portion of the business to arch Brexiteer and controversial hedge fund manager Paul Marshall.
Marshall, who bankrolled the launch of the GB News TV channel in 2021, paid £100 million for the publication, the Spectator said.
It marks the latest twist in a convoluted saga over The Telegraph’s ownership after United Arab Emirates-backed Redbird IMI bought it out of Lloyds Banking Group PLC (LON:LLOY)’s receivership last year.
Lloyds seized control of the business when former owners the Barclay brothers failed to make interest payments on their borrowings with the bank.
Since then, the former Tory government blocked Redbird IMI’s takeover of the Telegraph Media Group due to fears of political influence from the UAE.
Numerous suitors have since lined up to wrest control of the business after Redbird IMI put it back up for auction.
Alongside Marshall, Maurice Saatchi, private equity group CVC, the Murdoch empire and the Daily Mail have entered talks.
The Spectator called the £100 million deal a “vindication” of its “unusual business model”.
“The price we’ve been sold for, £100 million, speaks to that belief in our potential,” said the Spectator’s editor Fraser Nelson.
“We were valued at £20 million when we separated from the Daily Telegraph in 2005. Since then, the magazine market has fallen by about two-thirds but our subscriptions have more than doubled.
“This five times valuation increase is, to put it mildly, rare in our industry. The auction attracted 22 potential bidders, including some of the greatest and most respected names in British and European publishing.
“Not bad for a publication with barely three dozen journalists.”
AstraZeneca the biggest FTSE faller of the morning
AstraZeneca PLC (LON:AZN) shed £9 billion of value after its shares dipped 4.8% this morning, making it the biggest drag on the FTSE 100.
This is due to some disappointing results from a trial of a lung cancer drug.
Late-stage trial results of the TROPION-Lung01 showed that the overall survival rate from the new drug “did not reach statistical significance”, according to AstraZeneca.
The trial was to test the datopotamab deruxtecan (Dato-DXd) antibody-drug conjugate compared to docetaxel, the current standard of care chemotherapy, in adult patients with advanced or metastatic nonsquamous non-small cell lung cancer (NSCLC) who had been treated with at least one other therapy.
Shares in Britain’s most valuable company are currently trading at 12,102p with a market capitalisation of £187.58 billion.
The FTSE 100 is down 35 points to 8,235.
China’s lack of appetite for foreign goods leads to soaring trade surplus
China’s trade surplus trounced expectations in August after year-on-year exports increased by 8.7%.
Forecasters had expected total export growth to be a flat 7%, but double-digit growth in household appliances, aluminium, general machinery and integrated circuits led to these forecasts being smashed.
As a result, China’s balance of trade exceeded $91 billion, up from less than $84 billion in July and more than 34% higher year on year.
This is despite persistent trade tension with the US- where the surplus widened to $33.81 billion in August from $30.84 billion in July.
Exports to the European Union rose by 13.4% year on year.
A lack of domestic demand for foreign goods contributed significantly to the surplus.
Imports increased just 0.5% against 2% expectations, primarily because of falling demand for EU-originated goods amid a drought in luxury demand.
Imports of rare earth materials were notably poor, having fallen by nearly a third.
China is the largest global producer of rare earths, but the US still commands a large share of the global market, alongside Australia and emerging economies across Asia and Africa.
Looking forward, Pantheon Macroeconomics’ senior China economics Kelvin Lam stated: “On balance, we expect Chinese export growth to ease moderately in Q4, due to the higher base over the same period last year.
“Also, the slowdown in US demand — which accounts for 15.3% of total exports in August — will inevitably weigh on Chinese export growth.
“Admittedly, the slacking US market is somewhat offset by a rebounding EU market and China’s pivot towards non-traditional markets.
“We continue to think China’s export growth strategy will face challenges in the next few quarters, thanks to geopolitical/trade tensions with the West, especially in a US election year.”
Ocado outpaces Sainsbury's, Asda, other brick-and-mortar grocery rivals
Asda retained its status as the third-largest supermarket in the UK by volume in the September quarter, but the gulf between its and FTSE 100 rivals Tesco PLC (LON:TSCO) and J Sainsbury PLC (LON:SBRY) continued to widen.
Asda, whose chairman Stuart Rose recently said he was “embarrassed” by Asda’s performance under the ownership of Mohsin and Zuber Issa, maintained a 12.6% market share in the 12 weeks to 1 September, according to the latest Kantar data.
This is down from 13.8% in the same period in 2023- a 5.6% decline.
Tesco, meanwhile, increased its leading position by 5.3% to 27.8%, with closest competitor Sainsbury’s adding 5.7% to 15.2% of market share.
However, it was Lidl that saw the most impressive growth among the brick-and-mortar supermarket chains by increasing its market share by 9.1% to 8%.
Online-only Ocado (LON:OCDO), beat out all traditional grocery chains with a 12.9% increase in its market share to 1.8%.
Kantar noted that grocery price inflation eased by to 1.7%, but cost-on-living pressure remained prominent among shoppers.
Fraser McKevitt, head of retail and consumer insight at Kantar, stated: “Despite grocery price inflation easing back to 1.7% over the last four weeks, shoppers' financial confidence hasn’t risen with it.
“Memories of the last two years remain strong, with nearly 60% of shoppers still very or extremely concerned about rising grocery prices.
“This is their second biggest financial worry, only behind home energy bills.”
Kantar’s published grocery market shares are based on the total till roll of retailers that are primarily grocers (but may also sell merchandise (including clothes).
M&S, which is a balanced mix of FMCG and general merchandise, is excluded from the data.
UK jobs market like a newly baked cake
Here is what AJ Bell’s investment director Russ Mould said of the latest UK jobs data: “The latest UK jobs figures suggest a labour market which, like a newly baked cake set in front of a group of kids, is cooling, but not quite as fast as the Bank of England might want in order to press the accelerator on rate cuts.
“UK wage growth fell to its lowest level since the quarter to July 2022 but, even in real terms, pay is still up considerably more than the Bank’s 2% inflation target.
“Although most of the data was in line with expectations, a tick lower in the unemployment rate and a much bigger increase in the number of people in employment does hint at some continuing tightness in the jobs market.
“This leaves the Bank’s decision making finely balanced ahead of its meeting next week.
“The ONS acknowledges some volatility around its numbers and this is not the only jobs data out this week with the accountancy group BDO releasing data suggesting August was the worst month for the UK labour market since 2013.
“Another significant takeaway from today’s ONS report is the 4% increase in overall wages which will feed into the uplift in the state pension. The increase will be less than pensioners have seen in recent years.”