Twitter and censorship
Presidential row
Tensions started to escalate last week between US President Donald Trump and Twitter (US:TWTR), with the president signing an executive order targeting social media sites after Twitter added fact-checking messages to posts about mail-in voting. In recent days, criticism has been levelled at Mr Trump for his response to the demonstrations that have been taking place across the US, with people taking to the streets to protest against the police killing of George Floyd, an African-American man, in Minneapolis.
Car production crashes
197 units made
British car production fell by 99.7 per cent in April, as the coronavirus pandemic stopped production. Just 197 units were made. This marked the lowest monthly output since World War Two, according to the Society of Motor Manufacturers and Traders (SMMT), which noted that car makers instead created more than 700,000 pieces of personal protective equipment (PPE). It is now estimated that fewer than 1m units will be produced in 2020. Lost production could cost the industry up to £12.5bn.
AstraZeneca updates
Various treatments
AstraZeneca (AZN) has had a busy few days. Late-stage trials for the pharma giant’s ‘Tagrisso’ lung cancer drug showed that it reduced the risk of disease recurrence or death after surgery by about 80 per cent. The group later revealed that its ‘Lynparza’ therapy has been recommended for EU marketing authorisation to treat a type of pancreatic cancer. Meanwhile, its ‘Brilinta’ treatment has received US approval for certain high-risk coronary patients. AstraZeneca has also been working to gauge the effectiveness of existing drugs for Covid-19 patients.
Rolls-Royce tumbles
Credit rating downgraded
Shares in Rolls-Royce (RR.) tumbled after it was revealed that AKO Capital divested its entire 5.2 per cent stake in the group. The hedge fund had only taken up the holding in Rolls at the beginning of April when the shares were around the 305p mark. In another blow, Standard and Poor’s slashed the aerospace and defence company’s credit rating from investment grade, ‘BBB-’, to junk status, ‘BB’. Back on 20 May, Rolls-Royce announced a major reorganisation, entailing the loss of at least 9,000 roles from its global workforce of 52,000.
DMGT: ad declines
Pandemic pressure
Coronavirus has been compounding the structural problems of a print advertising sector struggling to adapt to an evolving commercial landscape. Daily Mail & General Trust (DMGT) saw underlying revenues for its consumer media business drop by a third in April – stemming largely from a 69 per cent fall in print advertising sales. Digital advertising also slumped, but by a less significant 16 per cent. Circulation took a similar dive. For the half-year to March, group revenues were broadly flat at £683m. Pre-tax profits rose from £50m to £80m after profits on disposals.
Card usage soars
Record proportion
Card payments made up 51 per cent of all payments in the UK in 2019 – the first time they have accounted for more than half. UK Finance found that debit cards were the most used method of payment, with 17bn transactions – of which 7bn were contactless. Cash payments fell by 15 per cent to 9.3bn payments. UK Finance’s chief executive Stephen Jones suggested that the change in people’s payment habits “may have inadvertently gone some way to prepare the nation for the impact of Covid-19 on their daily lives”.
Services downturn
Easing decline
UK service providers saw a sharp reduction in activity last month, stemming from a contraction in business and consumer spending amid the coronavirus pandemic and a nationwide lockdown. A reading of 29 was registered in May, according to the IHS Markit/ CIPS Services Purchasing Managers Index (PMI) – higher than the 13.4 figure registered for April, but still constituting a faster decline than any other time since the survey’s inception in July 1996. See chart below for the latest Manufacturing PMI survey.
The UK manufacturing sector continued to decline during May – giving a reading of 40.7 on the IHS Markit/ CIPS Purchasing Managers’ Index. Anything below 50 signals a contraction.
Output, new orders and employment fell at some of the most rapid rates in the survey’s nearly three-decades-long history, amid strict lockdown measures. That said, May’s reading did signal an improvement on the record-low of 32.6 seen in April. “Pockets of growth” generally pertained to healthcare-related or personal protective equipment products. Some firms said that they saw new-business inflows restart, as clients began to reopen and lockdowns eased.
