Good morning.
On a busy morning for corporate results, there are two notable winners.
Shell and British Gas owner Centrica both boosted profits in the most recent quarter as they benefited from rising energy prices sparked by Russia’s war in Ukraine.
Companies are sharing the spoils with investors, with Shell announcing another $6 billion share buyback. That’s after $8.5 billion in share buybacks in the first half of the year.
Centrica, for its part, restarts its dividend for the first time since the beginning of the pandemic.
The payments could spark political anger as they come after the windfall tax that targets oil and gas producers’ profits.
5 things to start the day
1) The UK bets on European energy Wholesale gas and electricity prices on both sides of the Channel are at record levels
2) Courts having power to award Bitcoin Move damages would mean that damages could reflect large movements in the value of digital currencies
3) Facebook suffers first revenue drop as advertising slows Parent company Meta warns of cutbacks in hiring and spending plans
4) The Federal Reserve sharply raises interest rates in a fight to beat inflation. The U.S. decision raises pressure on the Bank of England to clamp down more strongly on rising prices
5) Saudi prince invests £190m in UK’s biggest pension provider Saudi royal Alwaleed bin Talal Al Saud has taken a stake of just over 3% in Phoenix Group
What happened during the night
Asian shares posted cautious gains this morning as investors sniffed out a potential slowdown in the pace of US rate hikes, comforting bond markets and sending the dollar to a three-week low against the yen.
As expected, the US Federal Reserve raised rates by 75 basis points, but noted some softening in recent data.
Just the hint of a less aggressive Fed was enough to push the broadest index of Asia-Pacific shares outside Japan up 0.5%. Japan’s Nikkei added 0.3% and South Korea added 0.9%. Chinese blue chips consolidated by 0.6 units.
It arrives today
- Corporate: Diageo (annual results); Airtel Africa, Alliance Trust, Anglo American, BAE Systems, Barclays, Centrica, FDM Group, Greencoat UK Wind, Hammerson, Inchcape, Indivior, ITV, National Express, Rathbone Brothers, Relx, Rentokil, Schroders, Scottish American Investment Company, Segro, Shell, Smith & Nephew, St James’s Place, Vesuvi, Weir (interim); AVEVA, BT, CMC Markets, CVS Group, Discoverie Group, Evraz (trade update)
- Economy: GDP (US), Jobless Claims (US), Consumer Confidence (EU), Business Climate (EU)