Tech giants
What can you buy with $1,000? Not one share in Amazon, which saw its share price pass the $1,100 mark on Friday after it reported better-than-expected third quarter revenues. Instead, your $1,000 could be spent on the new iPhone X, but you’ll have to wait. Apple’s latest smartphone sold out on its first day on the shelves, dragging shares in the world’s largest company to record highs. Meanwhile, Microsoft, Intel and Alphabet all reported better-than-expected third-quarter earnings, adding close to $100bn to their collective market capitalisations in one day.
EasyJet’s pick-up
Extends routes
EasyJet (EZJ) plans to buy Air Berlin’s operations at Berlin Tegel Airport. Under the terms of the €40m deal, easyJet lease up to 25 aircraft, employ around 1,000 of Air Berlin’s crew and take over other assets such as runway slots. EasyJet will give further details about specific routes it plans to fly at a later date. However, management said it would operate a reduced timetable this winter season and resume a full schedule from the summer. Analysts at Liberum estimate the deal will add around 9 per cent to easyJet’s total fleet, but made no changes to forecasts.
Bailey leaves Burberry
Departs in March
As had long been suspected, Burberry’s (BRBY) creative visionary, Christopher Bailey, announced he would be leaving the company altogether – albeit not until the end of 2018. Originally, Mr Bailey oversaw the design direction of the brand as former chief executive Angela Ahrendts took care of the numbers. When Ms Ahrendts left to join tech giant Apple, Mr Bailey took on both roles simultaneously. Eyebrows were raised and, not long afterwards, it was announced that Marco Gobbetti of luxury fashion house Celine would join the group as its new chief executive. Mr Bailey moved into the role of president and chief creative officer in July, but will leave the board in March.
Rise on the horizon
BoE decides
As we went to press, markets were betting on the Bank of England raising interest rates for the first time in a decade. The day prior to the meeting of the monetary policy committee on 2 November, two-year government bond yields had risen to 0.48 per cent, from 0.46 per cent at the start of October. The decline in the value of sterling pushed up the consumer prices index to 3 per cent in September – its highest point in more than five years – and above the central bank’s 2 per cent inflation target. However, gross domestic product growth has remained weak, at 0.4 per cent in September.
Oil bulls
Further cuts proposed
Brent Crude rallied to its highest level since mid-2015, near $62 a barrel. Sentiment was bolstered by remarks from Russia and Opec officials supporting a deal among global producers to extend supply cuts. Prices rose 7 per cent in October, representing the second consecutive monthly gain in the international benchmark. This has helped bolster investor sentiment towards industry players including BP (BP.) (see page 9).
Bitcoin's future
Hedging capability
Bitcoin may be about to get another push from the fringes to the mainstream. CME Group – the world’s largest exchange operator by market value – is making plans to offer bitcoin futures by the end of the year, alongside its current range of futures on interest rates, stock indices and commodities and currencies. A lack of futures contracts has made it difficult for investors to hedge against its, sometimes extreme, fluctuations (see page 24).
Ofwat updates
Penalties and rewards
Water industry regulator Ofwat has proposed issuing a £2.1m underperformance penalty to Pennon (PNN) after the company failed to meet pollution targets over the past two years. Severn Trent (SVT), meanwhile, is facing a proposed outperformance payment of £38.4m following its efforts to reduce sewer flooding. The announcement has been made as part of the regulator’s draft plan to adjust price controls for the companies from next April.
